What are Federal Immigration Investor (EB-5) Funds Used for?December 05, 2013
With the first Regional EB-5 Center now open in RI, people want to know how it will impact the economy.
After the first EB-5 regional center was opened in Rhode Island in KLRs Emerging Business Center in November, we wanted to help you learn more about EB-5 funding. This blog will help you to better understand what EB-5 funding is used for and typical projects and examples of how this program can be highly beneficial to the communities it is used in.
What is EB-5?
Congress established the EB-5 Program in 1990 to bring new investment capital into the country and to create new jobs for U.S. workers. The EB-5 Program is based on our nation’s interest in promoting the immigration of people who invest their capital in new, restructured, or expanded businesses and projects in the United States and to help create or preserve needed jobs for U.S. workers.
Within the EB-5 Program guidelines, immigrants who invest their capital in job-creating businesses and projects in the United States receive conditional permanent resident status in the U.S. for a two-year period. After two years, if the immigrants have satisfied the conditions of the EB-5 Program and other criteria of eligibility, the conditions are removed and the immigrants become unconditional lawful permanent residents of the U.S. Congress created the two-year conditional status period to help ensure compliance with the statutory and regulatory requirements and to ensure that the infusion of investment capital is sustained and that U.S. jobs are created.
The 1990 legislation that created the EB-5 Program envisioned lawful permanent resident status for immigrant investors who invest and engage in the management of job-creating commercial enterprises. In 1993, the legislature enacted the “Immigrant Investor Pilot Program” that was designed to encourage immigrant investment in a range of business and economic development opportunities within designated regional centers. In 2012, Congress reaffirmed its commitment to the regional center model of investment and job creation by removing the word “Pilot” from the now twenty-year old program, and by providing a three-year re-authorization of the regional center model through September 2015.
The EB-5 Immigrant Investor Program provides green cards for foreigners who invest at least $500,000 in projects in the US that produce at least 10 permanent jobs. Nearly all investment in the program, which President Obama’s administration has pledged to expand, comes through regional centers, which are allowed to bundle EB-5 investments and count indirect jobs toward project eligibility.
Below are some real world examples of how companies, universities and local governments have used the EB-5 program to finance major projects.
- EB-5 funds have become increasingly useful in the funding of charter schools nationwide. Charter Schools are privately managed, but funded by the government. For this reason, EB-5 investors see the schools as very safe investment opportunities. The state of Florida estimates that more than $30 million has been dispersed into state charter schools as the expectation is that money flowing from EB-5 programs into educational enterprises will increase significantly in the near future.
- The University of Miami partnered with a regional center in Miami to get funding for a Life Science and Technology Park. The EB-5 program provided $20 million which was used in the first phase of the project.
- Temple University- Medical center
- Philly Convention Center- 120m raised
- The State of Washington utilized EB-5 regional center funding for the replacement of the SR 520 Bridge project. The project is believed to be one of the first public infrastructure projects to tap EB-5 funds. Foreign investors supplied $47.7 million of the $4.128 billion needed for the project.
- Lionsgate, Sony and Timewarner
- The State of Vermont operates a statewide EB-5 regional center under the state’s agency of commerce and community development. The state-run center works as an intermediary between foreign investors and development projects. It has successfully allocated millions of dollars in investments that directly benefit the state’s economy.
- Brooks City Base- Military Install, industrial park
- Barkley Center – NJ Brooklyn Nets
To find out more about the Rhode Island EB-5 program contact email@example.com.