The EB-5 Program: Create American Jobs, Get a Green Card

The visa program has pulled in $1.5 billion and created 31,000 jobs. Now U.S. Citizenship and Immigration Services is pushing to streamline it

Seldon expects to get $20 million from foreign investors John Stanmeyer for Bloomberg Businessweek

By Nick Leiber

This Week

After spending eight years and $20 million in federal grants creating portable water purification systems, Seldon Technologies last year was ready to start selling its devices to the developing world. But bank credit and venture capital were tight, and the Windsor (Vt.) company couldn’t raise the money it needed to launch production.
So co-founder Alan Cummings turned to a federal program that offers foreigners permanent U.S. residency if they invest in companies that create jobs. Cummings says he has already received “millions” and expects to secure a total of $20 million from 40 foreign investors, “if not this year, next.” He plans to hire 140 people. “It’s been a lifeline to capital as we’re trying to grow this business,” says Cummings, 63.
Hundreds of small ventures across the U.S. are finding backers through the visa program, known as EB-5. The 21-year-old initiative makes 10,000 green cards available to foreigners who invest a minimum of $500,000 in U.S. companies that create or preserve at least 10 jobs in the country. The U.S. Citizenship and Immigration Services estimates that EB-5 has attracted more than $1.5 billion in investment since its inception, creating some 31,000 jobs. “This is a unique way for immigration to enhance the U.S. economy … at no expense to the U.S. taxpayer,” says Stephen Yale-Loehr, who teaches immigration law at Cornell Law School.
The primary conduit of investments for the EB-5 program, though, faces an uncertain future. About 90 percent of the money is funneled through private companies, known as regional centers, which match overseas investors with businesses in need of capital. These companies are authorized to participate in the program by legislation that expires every few years. They could be shut down if Congress fails to reenact the law by September 2012. Immigration Services data show that in the past five years regional centers were responsible for nearly 10,000 jobs and more than $400 million in investment. In 2007 there were only 11 of them. Today there are 147, with 146 more seeking approval.
Because of the program’s complexity, EB-5 uses less than half its annual quota of visas, meaning it is responsible for a small fraction of the 140,000 employment-based residency visas allotted to foreigners each year under a variety of programs. State Dept. data show that 1,885 people—about half of them from China—got EB-5 visas in the 12 months through September 2010. In the six months through March 2011, the State Dept. estimates it issued more than 2,100 visas. Regional center directors say the number of applications has increased because it is so difficult for small businesses to get financing these days.
Taher Kameli, executive director of Chicagoland Foreign Investment Group, a center in Chicago, says interest typically flags in the year before the program comes up for renewal, as potential investors fear EB-5 may be canceled and they may not get a green card. “If Congress can extend the program this year, either make it permanent or extend it for a [longer] period of time, that would help the momentum that these regional centers have,” says Kameli. His center has helped 103 investors put $51.5 million into six companies, including assisted living facilities and a medical equipment manufacturer.