It turns out that green cards are for sale. For $500,000, well-off foreigners can jump to the head of a very long line of people who want to move to the U.S., as long as each investment creates at least 10 jobs. In return, foreigners can obtain legal residency in as little as 22 months, as opposed to several years for other visa programs.
The EB-5 visa “is like a fastpass at Disneyland,” said Clem Turner, a lawyer at Homeier & Law, who advises companies on these types of deals. “Your not circumventing, but a 10-year process is becoming one year.”
This visa program is not new. It was created in 1990, but it wasn’t until the financial crisis, when banks pulled back on their lending, that companies began using it in earnest. Any company can access the program, as long as it meets the hiring requirement. For example, a fast food franchise can raise $1 million from two investors, as long as it hires 20 employees.
In recent years, the visa program’s popularity has exploded as major real estate developers have begun relying on it to fund developments. In fiscal year 2013, the most recent data available, EB-5 visas generated $2 billion in investment, according to Invest in the USA, an industry trade organization. California topped the list, with more than $438 million in investments, with New York a close second, with $379 million in investment.
Last year, for the first time, the entire annual allotment of 10,000 visas was claimed by August, before the end of the fiscal year in October. This year, the allotment was reached even earlier, in May. While any foreigner can participate, more than 80 percent are from China.
Despite the visa program’s popularity, critics argue that it is riddled with issues. There have been several cases of fraud, including a Chicago developer who was indicted for bilking 290 Chinese investors out of $160 million. And there are also questions about the legitimacy of the money flowing in from China.
Victor Chao works with F&T Group, a major real estate developer in the New York City borough of Queens that is building a mixed-use project. It’s being funded in part with $20 million from 40 Chinese investors. Chao spent a year vetting the investors and checking their credentials. Yet, even he has some doubts.
“I cannot say 100 percent they’re legitimate, but I think we do our job,” he said.
Parts of the visa program are up for renewal in September, and Congress is likely to address some concerns, including ways to reshuffle the visa allotments to allow more investors into the program. There is also a good chance that the $500,000 investment threshold, which was set when the program launched 25 years ago, will be increased.