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The Economic Impact of EB-5 on the US Economy

October 26, 2015

On October 1, the Fifth Employment-Based preference (EB-5) Regional Center program was extended to Dec. 11 in order to give Congress more time to draft a long-term resolution. The program helps provide a crucial boost of foreign capital through investments from foreign nationals looking to attain Green Card/Permanent resident status through the program.

The EB-5 program impacts local economy as well as the national economy. A base investment of $500,000 would create at least ten jobs, since that is the requirement for a foreign investor looking to acquire permanent resident status. These investments often occur in industries in Targeted Employment Areas (TEA’s), creating jobs and generating capital in areas that sorely need them. The direct effects of an EB-5 investment also include contributions to the Gross Domestic Product (GDP) and State, Local, and Federal taxes. Along with the inevitable job increases, the EB-5 program also helps stimulate the economy through household expenditures, as the investors themselves will contribute to the economy through every-day household needs (automobiles, moving, travel etc.). Given the state of the U.S. economy, the influx of money from foreign investors would improve the job market and overall cash-flow in foreign and domestic areas.
If, by Dec. 11, Congress decides to increase the visa limit to the desired 20,000/year, the program would be able to support over 100,000 jobs for Americans and generate billions of dollars to the U.S. GDP. Those numbers are almost 1/3 of that as the visa limit currently stands. In order to prove that their investment has generated and supported 10 full-time jobs, the investor must fill out a form I-829. Once approved, immigration restrictions are lifted. Given the desire for the EB-5 investor to become a full-time U.S. citizen, it is clear that jobs are almost always guaranteed to be created through the EB-5 regional center program.

During the 2013 fiscal year alone, spending associated with EB-5 Regional Center investors contributed $3.58 billion to U.S. GDP and supported over 41,000 U.S. jobs. Their spending contributed over $750,000 to federal and local government tax revenues. The EB-5 provides jobs for all sorts of industries, including hospitals, construction, legal services, wholesale trade, real-estate, restaurants and transportation. Although most of the investors gravitate to the larger states and cities, as do most people, investors target all TEA’s where investments are needed to help stimulate the economy.

In a time in our country where it has become increasingly difficult to secure and use traditional sources of financing for development projects, such as traditional construction loans, developer equity and tax credits, EB-5 investments have become an increasingly useable and important source of finances. Those on an EB-5 visa have a great incentive for their investment to be successful, as they came to the U.S. searching for the best way for them to obtain a permanent residency visa. In order to do that, they must create jobs. EB-5 investors handle all kinds of investor-driven projects on every scale.

The EB-5 program not only helps many immigrants looking to acquire a Green Card, but also provides a significant contribution to the economy and well-being of the United States.
Here at the Law Firm of Shihab & Associates, Co., LPA, our EB-5 practice team informs individuals on the advantages and disadvantages of individual and regional center EB-5 petitions, as compared with other immigration options, and offers advice on reputable regional centers with proven track records. We guide our clients through the entire process; from thorough documentation of clients’ lawful funds, to filing for conditional residency, followed by removal of condition, and finally applying for citizenship. Contact us today for a Consultation.

Additional Resources

1) The Economic Impact and Contribution of the EB-5 Immigration Program, https://iiusa.org/blog/wp-content/uploads/2015/05/Economic-Impacts-of-the-EB-5-Immigration-Program_2013_FINAL-web.pdf , Kay, David, Invest in the USA blog, May, 2015.
2) The Economic Impact of Individual Immigrant Investors in the EB-5 Program: A Case Study, http://www.eb5investors.com/magazine/article/economic-impact-of-individual-immigrant-investors-in-eb5-program , Scott W. Barnhart, Ph.D and Cora M. Barnhart, Ph.D, EB5 INVESTORS MAGAZINE, 08/20/2015

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