By Marianela Toledo | Florida Watchdog
MIAMI — The U.S. Senate wants to create an “investor visa,” which would expand the current EB-5 program by lowering the investment threshold for foreign nationals seeking U.S. residency.
Investing in New Ventures, Entrepreneurial Startups and Technologies, as it’s officially called, is being created under a newly created EB-6 category.
It’s a means of getting a temporary immigrant visa, or conditional permanent resident visa — conditional green card — that converts to a permanent residency — green card — after two years if certain conditions are met.
Those conditions could include money generated and full-time jobs created.
If the investor isn’t interested in staying in the U.S., the investment requirement is lower — a three-year non-immigrant visa is granted to people who invest at least $100,000 in a U.S. company or project the creation of at least three jobs and revenue of at least $250,000 per year for two consecutive years.
This is different from an immigrant visa, which requires the investment and the creation of the five full-time jobs; applicants can apply for a permanent green card after two years.
For investors who apply for non-immigrant visas — a two-year green card — it’s unclear whether they could extend their stays or would have to apply for a different program.
“We don’t know whether the person applying for a non-immigrant visa may later seek permanent residency,” said immigration lawyer Fernando M. Socol, managing Partner for Negocios En USA.
“For now we have to wait to see what the final version approved by the Senate will be and then see which version the House passes and then join together the two versions in one final bill.”
The EB-6 visa would be in addition to the current EB-5 visa, which requires a “passive,” but larger, investment and the creation of at least 10 U.S. jobs. Under this program, the foreign investor invests a minimum of $500,000 into a new or existing U.S. company or into a regional center — a third-party investment vehicle that assumes the responsibility of creating the jobs.
In exchange, the investor is granted conditional permanent residence for two years. Within the 90-day period before the conditional permanent residence ends, the investor must prove the entire investment was made and that 10 jobs were created as a result.
This has been a sticking point. Once those two years end, immigration officials can revoke or deny permanent residence. That could leave the foreign investor with little more than a one-way ticket home, wherever that may be.
The Senate is also planning to overhaul sections of the controversial EB-5 visa. The pilot program created by the Immigration Act of 1990 would become permanent under approved amendments by Judiciary Committee Chairman Patrick Leahy, D-Vt.
Reform also aims to increase the number of visas issued to investors. The program allocates 10,000 visas a year, but the new rules will exclude family members such as wives and children.
According to the The Association to Invest In the USA, an industry trade association for the EB-5 Regional Center Program based in Washington D.C., in 2012, officials received 6,041 petitions for EB-5 visas — 3,677 were approved, 957 were refused and 60 were revoked.
With such a wide discrepancy between petitions received and granted, the EB-5 visa program can become a breeding ground for potential scams aimed at rich foreign investors. In February, for example, the Securities and Exchange Commission seized the assets of 29-year-old Chicago resident Anshoo R. Sethi, who was accused of selling more than $145 million in securities and collecting $11 million in administrative fees from more than 250 investors. The SEC said investors were duped into believing that by purchasing interests in his firms they would be granted permanent residence through the EB-5 program.
Still, applications for EB-5s have increased in recent years; the country now has 307 regional centers, an increase of more than 282 since 2008, according to U.S. Citizenship and Immigration Service.
Socol has seen a lot of interest in the program over the past year, particularly among Venezuelans.
“The process involves two stages. The first part is to check the source of investment funds. The second part is to see if jobs are actually created; sometimes that’s where the project fails and the investor can’t prove that the jobs were created. That’s the risk,” he said.
In the case of Venezuela, investors can only apply for the EB-5 or L1, a non-immigrant visa valid for a period of time —three months to seven years — and available to employees of an international company with offices in both the United States and abroad.
The overall intent of the programs is to stimulate the economy and create and preserve jobs. But verifying that jobs were actually created can be difficult, since oftentimes the benefits are indirect.
A report in 2005 by the Government Accountability Office, which analyzed the development of the EB-5 program from 1992-2004, found, among other things, the program had no reliable way of tracking the created jobs.
The Federation for American Immigration Reform, which wrote a report titled “Selling America Short,” told Florida Watchdog: “The employment figures are misleading because they have jobs created indirectly,” and USCIS doesn’t disclose information about individual cases, because it’s considered confidential.
Contact Marianela Toledo at Marianela.Toledo@FloridaWatchdog.org twitter @mtoledoreporter