EB-5 Investor Visa Program Needs Better Oversight, Regulation | Commentary
Posted on September 24, 2013
The job of overhauling the nation’s immigration system is not getting any easier, but as Congress gets more detailed in its analysis of what elements should be kept, what should be discarded and what should be amended, good ideas for improving the system as a whole are coming to the fore.
One such good idea is an amendment by Sen. Patrick J. Leahy, D-Vt., to enhance the EB-5 investor visa program, which provides a method of obtaining a green card for foreign nationals who invest money in the United States. Leahy’s language would require stronger oversight and reporting, strengthen anti-fraud efforts and establish more flexible job creation methodologies. All of these are important steps toward creating a permanent EB-5 program that properly serves the national interests for which it was established.
Leahy’s amendment recognizes that the intent of the EB-5 program is to sustain and improve employment here in the United States. With that in mind, there are additional steps that Congress can take that would streamline the process and improve outcomes. Along the way, these efforts can also go a long way toward combating abuse within the EB-5 program and provide more transparency for investors, adjudicators and enforcement watchdogs alike.
To start with, Congress should raise the qualification bar for EB-5 regional center applicants. To receive regional center approval, applicants should be able to demonstrate that they have the capacity to deliver real projects through their regional center, have an established track record of successful projects in the industry area they serve, and are fully compliant with all relevant federal and state laws and regulations. This is consistent with the intent of the EB-5 program that actual jobs be created here in the United States.
Second, Congress should establish expedited processing for regional centers (and their associated investors) whose projects document large numbers of U.S. jobs or have high dollar values. For these regional centers, I-526 forms should take no more than six months for U.S. Citizenship and Immigration Services to process.
The Leahy amendment envisions premium processing being available to preapproved regional centers, and that’s a very helpful development. Taking that concept one step further to enable the projects with the biggest bang for the buck to be processed within a six-month window as the normal course of business, rather than a paid-for exception, would be even better. This is consistent with the intent of the EB-5 program to facilitate the maximum amount of U.S. employment in the swiftest and most effective manner.
Third, Congress should require that all existing and future EB-5 regional centers be fully compliant with applicable U.S. securities law and U.S. Securities and Exchange Commission regulation. Certainly, recent high-profile allegations of wrongdoing are a reminder that vigilance in this area is needed. Rather than rely on whistle-blowers and ad hoc complaints, however, there should be an upfront requirement that all EB-5 regional centers be SEC compliant. This is consistent with existing investor protection mandates and will improve the overall quality of regional center investment projects.
Finally, Congress should leave Targeted Employment Area designations with the individual states. State and local governments need to be a part of this process, and they are better-positioned to know the situation on the ground than a federal level agency. As with many aspects of immigration reform, seizing the opportunity to improve the EB-5 investor visa program will be a combination of making selected enhancements and leaving well enough alone.
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