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[HOT] Why many EB-5 practitioners disagree with a slew of writers who allege that the EB-5 Program is selling US citizenships in exchange for investment


Recently and in the past, there have been many articles written by people who take the position that they do not like the EB-5 Program because it is tantamount to the U.S. government selling US citizenships in exchange for EB-5 investments from foreigners. Here are specific and detailed reasons why many EB-5 practitioners strongly disagree with the often-stated reasons against the EB-5 Program.

1. EB-5 Program is basically selling U.S. citizenships in exchange for the investments that help to create the requisite number of jobs. This is a misunderstanding. First, EB-5 investors and their family members obtain what is called "conditional" green cards, not permanent conditional green cards. Only after they meet stringent I-829 requirements, such as making and sustaining capital investment and fulfilling the requisite job creation of 10 new, full-time positions within 2.5 to 3 years after their investments, can they get approvals on their I-829 conditions removal petitions which change their immigration status from conditional green cards to permanent green card status. They cannot apply for naturalization until 5 years from the time they obtain conditional green card status. It's absolutely a mistake to assume, as many of these writers do, that getting I-829 approvals is easy as eating an apple pie. In fact, we would say in reality, taking into account all withdrawals, denials and RFE'd cases, there is more than 25% chance that an EB-5 investor and family would ever successfully reach the I-829 approval stage. Even aside from their EB-5 investment money, there is no question in my mind that the EB-5 investors and families end up "contributing" to U.S. economy by spending money, by purchasing relatively expensive houses, cars, sending children to private schools, etc.

2. Unlike many of immigrant classifications, EB-5 investors undeniably benefit the U.S. economy. This is more than I can say for many of immigrant classifications. Of course, one could argue that labor certification based workers and H-1Bs also make significant contributions to the US economy, and that's true. However, it must not be forgotten that these people receive salaries in exchange for their work, whereas many of the EB-5 investors do not get that much return on their so-called investments. In short, EB-5 investors are putting significant amount of money -- $500,000 USD or more -- where their mouth is. If USCIS does not make it so that these EB-5 investors can obtain permanent green cards, you have to ask yourself, why in the world would these EB-5 investors pursue EB-5 cases in the first place? Generally speaking, they do not hate or despise their home countries, and are not trying to immigrate to the U.S. at any cost. Sure, they want to give their children an option of living and working in the U.S. and learn "good points" about the U.S. culture and attitudes; but it's not as if they are running away from their home countries. Therefore, unless USCIS make certain that they can be assured of getting permanent green cards, there is a very little reason why in the world these EB-5 investors will pursue EB-5 cases by plunking down at least $500,000 USD or more in some business ventures when they do not intimately know the business operators and often do not speak English fluently. Also, most of these EB-5 investors are not "super-rich", having hundreds of million USD. Usually, they made their money by working hard and taking their chances and realize that their is certain benefit in exposing their children to the U.S. way of doing things. Also, let's not forget that U.S. colleges are still considered to be best in the world, at least for now, so the college education -- and their children being able to work at U.S. companies afterwards -- are important considerations. EB-5 investors in general are precisely the kind of immigrants many countries would and should welcome.

3. You say these EB-5 investors should take on a lot of risk because they are doing so for the chance to make a big profit on their investments? That is absolutely wrong, because the more risk you take, the more chance the U.S. business will go down the drain and they can kiss goodbye to their I-829 approvals. No one wants I-829 denied and be deported from the U.S. No one wants to move their family to the US when they might become illegal aliens in the US after two years. Also, if they really wanted to make profits on their investments, with all due respect, most EB-5 investors have better opportunities to make more money in their home countries. In fact, I would argue that making money from their investments is not a primary -- even a secondary -- consideration for them. They want an opportunity to experience -- especially for their children -- better education, cleaner air, less hectic life style, etc., or some of them may have a skewed idea about the US system and government being very business friendly. To be perfectly clear, it's not so much that these EB-5 investors are unwilling to take the risk, but they don't want the added risk to lower their chances of getting their I-829s denied -- which is the case under the current EB-5 Program structure.

4. You say if these EB-5 investors don't want to take the high risk associated with EB-5 cases, then they shouldn't pursue EB-5 cases? Yes, that's true and fair enough, but it's also true that if that is the official policy of the U.S. government, then Congress should just get rid of the EB-5 Program, so that these investors can invest in Canada, New Zealand or Australia or any other country but USA, and save everyone a lot of time and effort.

For all of the above reasons, it is ludicrous to think or expect that foreign EB-5 investors should be glad to plunk down their hard-earned money WHEN and IF there is not a very high chance that they will get I-829 approvals. Therefore, USCIS should make changes to the EB-5 policies which lead to more consistent, reliable, reasonable and transparent decisions. Otherwise, the Congress should just shut down the EB-5 Program because EB-5 investors are definitely not fools.

Another EB-5 practitioner put it even better, so I am going to quote his opinion in its entirety.

Unlike many other federal government programs that are intended to create jobs, the EB-5 program requires EB-5 investors to prove that the jobs were actually created. EB-5 is one of the few federal programs that produces measurable results. These results are proven by individual investors, one by one. The investors literally produce I-9s and W-2s to prove "direct" jobs. As for "indirect" jobs, the investors have to prove that business plans were carried out so that results match up with job creation data produced through established statistical models that are widely accepted and used by economists in academia, industry and government.

The same people who whine about EB-5 are the same people who rely on these same statistical models (IMPLAN, RIMS-II, etc.) to support other government programs or actions. In former times, the Republicans relied on these types of statistical models to support their position of stimulating economic growth through cutting taxes. It was known as "trickle-down economics." The Democrats have also based their economic recovery theories on similar formulas, such as presuming that stimulus spending, such as building roads and repairing bridges, will have ripple effects across the economy. So it is completely ironic and ludicrous for these same people to attack indirect job creation through EB-5 when this job creation is proven through the same established economic models.

Many political commentators presume that EB-5 investors have some kind of sinister motives. They do not. The vast majority of EB-5 investors seek to enable their children to have better access to U.S. schools and colleges, and the option of remaining in the USA after graduation.

Many other political commentators make the mistake of lumping EB-5 investors together with other types of immigrants, especially those who entered the country illegally. The truth is that EB-5 investors are relatively wealthy and have not much in common with the 18 million or so undocumented immigrants. [Note that I have a great deal of sympathy for all types of immigrants who are good, hard-working people.] There should be no link whatsoever between measures intended to cope with undocumented immigrants and EB-5 investors. EB-5 investors do not take away jobs from American workers and bring large volumes of foreign money into the U.S. economy. Many of them actually end up setting up other businesses that create jobs.

As I said before, if the U.S. doesn't want the above benefits that come with the EB-5 Program, that's fine; but the Congress should then just do away with the EB-5 Program by letting it expire in September 2012, so everyone can stop wasting time and effort improving this Program to produce some economic benefits for the U.S. during this tough economic times. I am sure potential EB-5 investors will adapt to the termination of the EB-5 Program and then decide to invest in Canadian or other countries' investment green card programs. However, I would feel sorry for all those newly-established regional centers.

If these people are complaining against the current EB-5 Program, they will go nuts if the below Program allowing green cards for buying US houses passes.

http://online.wsj.com/article/SB1000142405297020375260457664142144946096...