Country Spotlight: USA

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The State of Play with the United States Immigrant Investment Program (The EB-5 Visa)
By Mona Shah, Esq.  

Congress created the EB-5 program in 1990 to benefit the U.S. economy by attracting investments from qualified foreign investors. Under the Program, in order to attain permanent residency, each investor must prove that at least ten new jobs were created or saved as a result of the EB-5 investment. More than 25 countries, including Australia, Portugal, Spain, and the United Kingdom, use similar programs to attract foreign investments, however, the American program, even though it is the cheapest (at $500,000 for an investor, his / spouse and all children under 21) it is the only investment program that will allow for the full return (plus interest) of the investment capital, it also requires substantial risk.


Congress and the Increasing Popularity of EB-5 

The increasing popularity of EB-5 has brought a whopping $18 billion in investments into the United States. The majority of EB-5 visas come through the Regional Center Program, a program that allows designated entities to pool investments and utilize indirect and induced job creation.

The Regional Center Program was due for renewal on September 30, 2015. The increasing popularity of the program and the size of the investments ensured that Congress would certainly not allow the program to continue without reform.  A bicameral, bipartisan proposal to reauthorize and reform the EB-5 Regional Center Program, Senate Bill 1501 was introduced by Senate Judiciary Committee Ranking Member Patrick Leahy (D-Vt.) and Chairman Chuck Grassley (R-Iowa.), with the support of House Judiciary Chairman Bob Goodlatte (R-Va.), Ranking Member John Conyers (D-Mi.), Immigration Subcommittee Ranking Member Zoe Lofgren (D-Ca.) and Congressman Darrell Issa (R-Ca.).

Senate Bill 1501 looked to overhaul the program, including amongst other matters, an increase in the minimum investment amount, an attempt to create a two tired program by redefining TEA’s (targeted unemployment zones), new rules on direct employment and integrity measures.  The authors of the bill certainly looked to champion the underdogs within the industry at the expense of the urban elite. Bodies such IIUSA and the EB-5 Investment Coalition made bona fide attempts to bridge the gap.

After months of vigorous debates, endless negotiations, constant redrafting, and a frenzy of last minute investor filings, the clock ran out before all of the details of this complex reform bill could be ironed out.  Congress, bowed into pressure from many within the EB-5 industry, who believed the pending legislation would be the death knell to the EB-5 program. The program was thus extended, without any changes, until September 30, 2016. Barely four weeks before September 30, Congressman Bob Goodlatte introduced HR 5992. This late appearance of the Bill along with the preoccupation with the US Presidential Elections guaranteed that the program would be further extended through a Continuing Resolution. This time to December 9, 2016. There is a distinct possibility that it can be further extended into early 2017


How does the EB-5 Program Work?

The EB-5 investor visa is essentially a job creation program. The amount a project can raise through EB-5 funds is directly related to how many jobs can be created. For a project to raise EB-5 investments, a regional center (or RC) is not mandatory. Projects can raise money through direct investment into a new commercial enterprise.   A regional center or RC thereby represents one of two ways for EB-5 investors to obtain conditional permanent residence. An EB-5 Regional Center is an organization designated by United States Citizenship and Immigration Services (USCIS) that sponsors capital investment projects for investment by EB-5 investors. Instead of investing directly into the project, the RC sets up an investment fund for the benefit of the EB-5 investors. Investors purchase equity stakes in the investment fund. Then, the fund either purchases equity in the job creating entity (the equity model) or loans the job creating entity money (the loan model). The job creating entity then uses the investment from the fund in the project to create jobs. The major advantage in obtaining regional center designation is that the regional center can take advantage of indirect job creation. The investor’s funds are at risk, there is no guarantee of a return should the project fail.


Integrity Measures to be Introduced:

There is very broad consensus on the implementation of integrity measures as Congress has prioritized program integrity. These measures address national security concerns and fraud. Some of these measures include background checks for Regional Center owners, banning participation in the Program for anyone who committed certain crimes including drug trafficking and terrorism, and forbidding foreign ownership of a Regional Center.


EB-5 Financing, Which Project to Choose? 

There is a direct comparison to EB-5 and Immigrant Investor Programs from other countries, where in most cases, the return of the investment is guaranteed. The EB-5 Program compels foreign investors to bear the investment risks. It mitigates the government risks in underwriting the projects and conducting due diligence. It leaves the project assessment and due diligence to the private sector. The EB-5 Program has provided alternative financing to high-risk and low-return privately owned projects that otherwise wouldn’t be funded. EB-5 capital is thus, a unique alternative to traditional sources of funds. The EB-5 program has typically been the preferred route for real estate development projects, as developers have been increasingly turning to EB-5, as a plausible (and increasingly credible) alternative financing mechanism. It can be structured as a short-term low-interest non-secured loan— without diluting the property owner’s equity.


However, not all real estate projects are viable and many times, large real estate projects have been hampered by construction delays. Other projects in other industries, such as transportation and technology have emerged as open alternatives to real estate.  The viability of transportation projects speaks for itself. Transportation around New York City alone is a $40 billion industry.



UK’s decision to leave the European Union, or BREXIT increased interest in the EB-5 Investment visa. Deep economic uncertainty in the UK and Europe as a whole can only serve to divert interest away from those regions to the much more stable United States.  In the immediate aftermath of BREXIT, pound sterling fell to its lowest level since 1985. Indeed, the last year showed that the US Dollar will continue to be a safe and reliable currency to do business with and invest in. Greater interest in the United States will not just be a product of the US’s stability and macroeconomic strength; it will also come at the expense of many rival immigrant investor visa programs around Europe. In countries like China, a primary selling point of many of these programs, such as Cyprus and Malta, is that soon after the application process, an investor is granted a conditional European residence card, allowing the individual to reside indefinitely anywhere in the EU. For investors looking to enroll their children in Britain’s world-class educational institutions, for example, such programs provide a straightforward solution. Brexit ensures that this pathway is no longer a viable one.


Advantages in the EB-5 Program:

The EB-5 program allows a person and his or her immediate family members to obtain a green card (i.e., live permanently in the U.S.) The EB-5 program is flexible:

  • Cheapest Investment program
  • No language requirement
  • No minimum education requirement
  • No business or management experience requirement
  • No quota backlogs, except for applicants from Mainland China (there are multi-year backlogs for many employment and family-based green card categories, but there is no quota backlog for the EB-5 investor category)
  • No sponsor needed (foreign investors use their own personal funds and do not require sponsorship from either an employer or a family member)

The EB-5 Investment Regional Center program is ideal for the retiree or inactive investor due in large part to the “indirect employment” feature of this program. The Regional Center Program removes the employee requirement of the Regular program and replaces it with a less restrictive “indirect employment creation,” which allows the investor to qualify by proving a combination of 10 direct and/or indirect employees.


Congress Must “Mend It, Not End it”

As the program continues to gain popularity, EB-5 projects look for investors in new markets. The program is certainly here to stay. The EB-5 industry and Congress are ready to negotiate durable reform that results in a stronger, more efficient Program. As was stated in a Senate hearing on EB-5 earlier this year, Congress must “mend it, not end it.”




Mona Shah, ESQ. :  

UK born, Mona, a dual licensed attorney, practiced as a Government Prosecutor with the British Crown Prosecution Service, before moving to New York, USA.

Mona has over 19 years of experience and extensive knowledge of all facets of U.S. immigration law; her practical expertise ranges from specialist business petitions to complicated, multi-issue federal deportation litigation.  Highly proficient and experienced in EB-5 law, Mona was voted top 25 EB-5 attorneys in the US 3 years in a row. Mona is a published author and regularly speaks at seminars worldwide, interviewed by mainstream news channels, quoted in major newspapers. Mona is a member of the IIUSA’s Leadership Council and a member of the Public Policy Committee and also an adjunct professor at Baruch University, New York City.


Mona Shah & Associates (MSA)

Established in 1997 and headquartered in Manhattan, New York, MSA are recognized as Industry leaders and one of the leading law firms in EB-5. MSA is internationally licensed to practice law with an advanced Immigration practice, also specializing in Corporate and Securities & Exchange Commission. With exceptional skills, experience and understanding, the experience and exposure of the firm sets them apart. MSA has been instrumental in the success of numerous EB-5 projects

And have actively assisted in bringing millions of dollars of investment money into the US, including for major projects in New York.

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