The Congressional Immigration Act of 1990 created the, EB-5 Visa, employment-based fifth preference category or EB-5 Immigrant Investor Visa Program. When it was first launched, qualifying foreign nationals who invested one million dollars in a business that created at least 10 jobs, were issued a “green card” or lawful permanent residence for the investor, spouse and unmarried children under the age of 21 that was renewable every two years.
The EB-5 Visa program got off to a slow start as applicants had to apply through a bureaucratic qualifying process. By means of illustration, according to figures from The United States Customs and Immigration Service (USCIS) in 2008, $321M flowed into US based investments through the EB-5. However, as the program was streamlined, the EB-5 Program became an economic development engine reaching $437B in investment capital in 2015.
The program has been amended and simplified and the investment level lowered to $500K. Other changes have been the creation of 903 USCIS approved Immigrant Investor Regional Centers. These are usually for profit privately owned limited partnerships that must be approved by USCIS. The centers bring experts in finance, accounting, immigration law, and real estate developments. Some of the principal advantages of said centers are:
One does not need to invest individually in a start up business but rather work through one of these centers as a passive investor meet the federally mandated requirements.
One can live anywhere as they are not tied down to managing the fund or the development projects. Additionally, since this is investment capital, the recipient can still work anywhere they desire.
The investor’s children qualify for admission to any university at resident rates.
The EB-5 Visa recipients can qualify for U.S. citizenship after five years.
The recipients are not required to speak English.
Investment capital from the EB-5 Visa program has been a principal source for the development of Las Vegas real estate as well as other metropolitan regions. Locally, the Houston Astoria multi-use complex and other luxury condominiums have been built with EB-5 Visa capital. In the Greater Houston Area, Mexican and Chinese investors have made up the bulk of the recipients of EB-5 visas.
In July, Pete Garcia, Executive Director of The United States-Mexico Chamber of Commerce, convened experts on the EB-5 Visa Program for Chamber members and the public to provide impartial information. iF Magazine reached out to Garcia to bring you this report:
iF: Talk about your experience in business.
Garcia: I have over 40 years in doing business with Mexico primarily in the tourism industry. I started when I was with Braniff International Airways and then Texas International Airlines which later acquired Continental Airlines which is now United. During my tenure we grew Continental from seven destinations to 30 destinations nonstop from Houston to Mexico and from a total of 25 cities to over 75 cities throughout Latin America and the Caribbean from Houston and New York.
iF: What led you to start the Mexico U.S. Chamber of Commerce?
Garcia: I knew there was a need to bring people together to encourage the huge opportunity in business between Texas and Mexico but, there was no organization that focused on this and I had built a large network of business people in both places.
iF: You recently had a EB-5 Visa Program workshop, what three takeaways can you share?
- This is the best way to acquire a “Green Card” for foreigners
- This program offers great passive investment opportunities
- EB-5 programs bring foreign investment funds to where they are needed
- Brings foreign investment to the United States
iF: Why is the EB-5 Visa still relevant in the current political climate?
Garcia: With immigration laws being enforced so vigorously, Green Cards are very difficult to obtain and since these EB-5 projects have already been approved by the US government, they offer the fastest way to obtain a visa to the USA.
iF: What myths do people have about this program?
Garcia: Myths of bad investments exist because, when they first began, some programs took investment capital, but the projects never started, and people lost their funds. However, now with the EB-5 Regional Offices there are much better controls to not allow these mistakes to happen.
iF: Does your chamber provide expert knowledge on this program?
Garcia: We have EB5 Regional Offices and attorneys as members of our chamber and they are the experts but, our chamber can answer just about any question on EB-5 Visas and a variety of investment projects.
iF: What is your forecast for Latin American Trade with the United States?
Garcia: Latin America is a very strong emerging global market and for Texas, that represents a great future for business between our countries. We are well situated, and Texas is a strong global and diverse economy. Texas exports over 17% of all USA exports to the world. The Panama Canal expansion also offers a new avenue for logistics and transportation between our two continents.
Houston has a huge logistical advantage with a world class maritime port, two international airports with important airline hubs, a great roadway system and rail connectivity to the world all providing a fantastic intermodal transportation and logistical hub.