For many years people were able to get green cards by opening a business in the USA and transferring themselves from their foreign business to the USA, under the Intra company Transfer Visa (L-1 visa) This option is still available, but the requirements to qualify have become far more onerous than in the past.

In 1990, when it was relatively easy to obtain green cards through this intra company transfer method, Congress created the EB-5 visa, also known as the Employment Creation Visa.

This visa allows foreign investors to gain permanent residence to the United States if they invest $1 million in a new commercial enterprise that directly employs 10 U.S. workers. The amount is reduced to $500,000 if the business is located in a high unemployment area.

The procedure is that a person (family) receives a conditional green card for 2 years and then applies for an unrestricted green card by proving that the money is still invested and 10 people are still employed.

When this EB-5 visa law passed, the Immigration Service expected a run on the 10,000 green cards that are available each year. Instead there was not much more than a nibble by foreigners. The reason was that it was still easy to get a green card by setting up a business with far less than $1m and it was not necessary to have at least 10 employees. Also 18 years ago, a million dollars was worth far more than it is today.

Then in 1993 Congress created a pilot program known as the Regional Centers, which allows private and governmental agencies to set up prepackaged investment opportunities for foreigners, which require certification by the Immigration Service. Many of these investments only require a $500,000 investment for the EB-5 Visa.

The advantage that Regional Center investments offer to investors is that investors do not have to concern themselves with the day-to-day management of a business, as long as they are involved in policy decisions. This allows someone to live in a different city to where the investment is made and even conduct a different business at the same time.

 History of the Regional Centers

Since sophisticated business people, using sophisticated lawyers created the investment opportunities in the Regional Centers, they wanted to make it as easy as possible for people to invest in their Regional Centers.

Some of the investment structures in Regional Centers were extremely creative so before offering them to the public, the Regional Center operators asked the Immigration Service for clarification. They wanted to know whether certain types of investment situations would qualify for EB-5 Green Cards.

The Immigration Service provided “advisory opinions.” Advisory opinions by the Immigration Service do not bind the Immigration Service, but they were the best source of information on the meaning of the new law.

Obviously the Regional Centers and investors relied on these advisory opinions.

 Suddenly in 1998 the Administrative Appeals Office (An appeal court of the Immigration Service) overturned some of these advisory opinions, which Regional Center operators and investors relied upon and suddenly what previously qualified under the law was no longer valid.

EB-5 visa investors, who were hurt by these 1998 decisions lobbied Congress for help. Eventually in 2002 Congress enacted changes to the EB-5 program, which gave some relief to people who filed petitions for EB-5 Investor Green Cards and had them approved between January 1, 1995 and August 31, 1998.

This fiasco was a significant detriment to attorneys recommending this visa to their clients from 1998 until recently.

Three reasons why the EB-5 visa investment is gaining renewed interest.

Three reasons have all converged at the same time to make the EB-5 visa more attractive to investors.

1. The Dropping dollar offers a deep discount.

In 1992, when the Euro became legal tender, it took 560,000 Euro to make the $500,000 investment.

In March, 2009  it takes 366,611-00 Euro for the $500,000 investment

The same is true for many other currencies.

The drop in the value dollar results in many foreign investors risking less of their net worth in Regional Centers, where they are not in control of the day-to-day management of their investment.

2. Greater Certainty in the Law

For years there was confusion and chaos in the interpretation of the EB-5 visa law, which led to uncertainty in the law. People need to know what is permitted under the law and the last 19 years have given clear definition to many of the qualifying requirements.

3. Involvement by the Immigration Service

The Immigration Service has been directing a lot more attention to this EB- 5 investment visa.

In September 2004 they organized a Public Information Meeting on Regional Centers and the Immigrant Investor Pilot Program. A few months later they established a special division in the Immigration Service that now oversees the development of their policies and regulations as well as guidance and training of their personnel to adjudicate these investment visas. So they are now organized.

The Pilot Program for the Regional Centers was scheduled to sunset in September 2008, but has been extended to Setember 2009. This program has been extended a number of times in increments of three years. This current extension was passed almost as an emergency measure to give Congress time to deal with the current economic crisis before reviewing the EB-5 visa program

Conclusion

Perhaps the greatest reason why businesspeople are giving the Investment Green Card (EB-5 visa) a fresh look is because the L-1, Intra Company Transfer is now fraught with obstacles and uncertainty.

In the past two years there has been a distinct increase in the number of petitions that have been filed and approved than in the previous 8 years. Even so, the number of green cards that have been granted are less than are available to investors on an annual basis. The question now is:  How long will this be the case?