MIAMI – Feb. 15, 2013 – One U.S. visa, the EB5, does more than grant entry to a foreign national. Because it applies only to potential residents who can afford a $500,000 business investment, it’s also attractive to developers who can offer a deal: Invest at least a half million in my business, and I promise to add at least 10 jobs in the first two years so you can get a permanent green card.

For developers, the EB5 program can raise large amounts of non-U.S. cash to fund local projects. As a result, EB5 programs actively seek investors through overseas outreach programs. Businesses or governments must set up an official EB5 program to accept money from EB5 immigrants; but once established, they can go shopping for investors.

“Frankly, it’s cheap capital,” securities lawyer David Schubauer tells The Miami Herald. Schubauer says most investors want to see at least an 8 percent return on their investment. But EB5 investors have an eye on the green card more than the financial risk, and a 1 or 2 percent return is usually enough.

In some countries, notably China, the EB5 rules have created a new business model. Some sellers make it sound as if U.S. visas are for sale at the going rate of $500,000.

Cities are now starting to see the EB5 visa program as a way to raise capital, and Miami could roll out its own EB5 program this year after certified to do so by the federal government. Once certified as a “regional center,” the city could get projects approved and start to attract foreign capital.

Going forward, the EB5 program could be harmed by its success, however. Each visa program allows a specific number of foreign nationals in the U.S. each year, and the EB5 program is capped at 10,000 – a number it has never hit. But a number of immigration experts predict that will happen in 2013.

Source: Miami Herald, Feb. 15, 2013, Douglas Hanks

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