3.  Immigrant Investor (EB-5): The ‘Million Dollar Green Card’

In 1990 the US Congress, in a bid to create jobs and encourage foreign investment, created a new route to lawful permanent residence. The programme has been variously known as ‘alien entrepreneur,’ ‘immigrant investor,’ ‘million-dollar green card,’ or ‘EB-5,’ the latter referring to its designation under immigration law as employment-based visa category, fifth preference.

The Original Programme
The EB-5 programme as originally conceived allowed immigrant investors to receive conditional resident status in the US for a two-year period if they invested $1 million (or $500,000 in certain targeted geographical areas) in a new US business that created at least 10 full-time jobs. The alien was required to be personally involved in the management of the business. Within the 90 day period preceding the second anniversary of the grant of conditional permanent resident status the alien then filed a second petition, to have the condition removed and his lawful permanent resident status made permanent.

Although approximately 10,000 such immigrant visas are available every year, only a small fraction has been issued. According to a report published in April 2005 by the US Government Accountability Office, a total of 6,024 immigrant visas had been issued to immigrant investors and their family members from the inception of the programme in 1992 through the end of the US Government fiscal year 2004 on September 30, 2004. (This contrasts with the 130,000 immigrant visas that were potentially available over that period.) That same report stated that as of June 2004 only 653 investors (not including dependents) had succeeded in having the condition removed and their legal resident status made permanent.

In March 1998 US immigration authorities suspended processing on approximately 900 applications for permanent residence as a result of a change in policy by Government adjudicators. That suspension, which is still in force, was intended to allow the responsible agency, now the US Citizenship and Immigration Service (‘USCIS’), to develop guidance as to how adjudicators should interpret the EB-5 regulations. Despite a congressional mandate in 2002 that the responsible agencies provide implementing regulations by March 2003, the regulations have still not yet been issued.

The Pilot Programme
Of the 10,000 EB-5 immigrant visas available every year, 3,000 are set aside for participants in a pilot programme for immigrant investors who make qualifying investments of at least $500,000 in a business located within a pre-qualified ‘regional center.’ The USCIS regulations allow foreign investors in regional centers to satisfy the requirement of job creation by using ‘reasonable methodologies,’ such as ‘multiplier tables, feasibility studies, analyses of foreign and domestic markets… and other economically or statistically valid forecasting devices’ to prove that their investment will create 10 or more jobs, directed or indirectly. In 2003 Congress extended the pilot programme through September 30, 2008. It is at the moment unclear whether Congress will further extend the programme and what the effect of a failure to extend would be on those immigrant investors involved in the scheme.

Considerations for Potential Investors
Participation in the EB-5 programme, whether in the traditional or pilot variants, should be undertaken only after careful consideration and after receipt of professional advice. The reasons for the low volume of applications, as summarized in the GAO report are daunting: ‘Onerous application process; lengthy adjudication periods; and the suspension of processing on over 900 EB-5 cases—some of which date to 1995.’

The careful investor will investigate all potential avenues for immigration to the United States before deciding on any one course of action, particularly one that requires a substantial investment. This investigation should include querying one’s advisers, business and professional, as to any factors that might potentially colour their advice, such as whether the advisor stands to receive a ‘finder’s fee’ for referring the potential investor to a particular investment scheme.