Entrepreneurial spirit has long been a prized trait that has driven progress and innovation throughout the history of the United States. However, America, known as a nation of immigrants, has not exactly opened its doors to allow entrepreneurs to immigrate to the country. Instead, as the current immigration laws stand, options are limited for those bold enough to create a new enterprise.
With immigration reform at the forefront of business in the U.S. Congress in 2013, the Senate has proposed new visa pathways for entrepreneurs in its immigration reform bill. Yet, immigration reform’s future is very much in question, as it stutters, sputters, and stalls in the House. Until Congress enacts new pathways for entrepreneurs, foreign nationals will need to maneuver the current immigration laws, namely the Immigrant Investor Program, commonly known as the EB-5.
Congress created the EB-5 visa program in 1990 to stimulate the U.S. economy with what was hoped to be an influx of foreign investment that would lead to domestic job creation. With time, it became apparent that Congress’s intentions were falling short of its stated goals, particularly because of the restrictive eligibility requirements. Despite efforts to relax that criteria, the EB-5 visa cap of 10,000 has not been reached in any fiscal year since the program was implemented; however, statistics reflect markedly increased numbers in recent years. For Chinese investors, in particular, there were concerns that the per country quota (7%) would be reached in the 2013 fiscal year (beginning October 1, 2012).
While there is a non-immigrant (temporary) visa category for certain investors (E-2 Treaty Investors), the EB-5 remains the option for a direct path to permanent resident status (green card) through investment, and as such, it remains a desirable option for some foreign nationals. At the heart of the EB-5 is the exchange of substantial monetary investment for the benefit of permanent resident status for the investor and his or her immediate family (spouse and unmarried children under 21). The EB-5 investor must make a capital investment (cash, equipment, inventory, etc.) of $1M owned by the investor toward the creation of a new business that will create at least 10 jobs. The investment may be $500,000 if in a Targeted Employment Area (TEA), which are rural areas or areas of high unemployment. Instead of creating a new enterprise, an EB-5 investor may invest in a USCIS-designated Regional Center.
Although immigration reform’s future is subject to contentious debate in the Capitol and the nation at large, the EB-5 may be one of the topics on which both sides of the aisle can find some common ground. With the EB-5’s appeal to pro-business groups for its benefits to the economy and job market, the parties favorably amended the program in the Senate’s reform bill. Under the bill, the Regional Center program would become permanent and not subject to renewal through the legislature, and spouses and children would not count toward the visa cap. The Senate bill also creates a new non-immigrant investor visa, the X visa, and a new permanent resident category for entrepreneurs, the EB-6, both of which are subject to requirements for investment capital raised, revenue earned, and jobs created. With the Senate bill’s provisions, one-half of the congressional puzzle appears to recognize the value of the entrepreneurial spirit. Only time will tell if the House will follow suit.
*If you are interested in investment-based visas, you should consult an experienced immigration attorney.