by Foster, on News
The special fast-track visa, known as EB-5, needs fine-tuning in any reform effort.
2014: Houston Chronicle | December 11, 2014
One line moves slowly, if at all. Most potential immigrants stand in this line. The other three lines can move faster, but they are subject to myriad factors. One line is reserved for people who have a special skill and an employer sponsoring them, but there are never enough spots in this line. Another special line is for spouses and close relatives of American citizens, and the wait here can last for more than a decade.
People who have the ability to create jobs in the U.S. can qualify for the shortest – and fastest-moving – line: the EB-5 line, billed as legal U.S. residency “via the red carpet.”
A person who wants to immigrate to the U.S. qualifies for this EB-5 line, and its coveted green card, if he can invest at least $500,000 in a U.S. business that creates 10 local jobs. The EB-5 program is good for the economy. In a statement, U.S. Citizenship and Immigration Services said the program had created more than 57,300 jobs by 2013 and invested nearly $9 billion in the economy, as reported by the Chronicle’s Lomi Kriel (“Invest big, get green card fast,” Page A1, Dec. 7).
The impact of the program is visible in Houston’s skyline. Recently, Abe Contreras, who came to the U.S. from Mexico and became a citizen in 2008, put together a group of foreign investors, mostly from Mexico and Nigeria, who financed about half of the Astoria, a high-rise project in the Galleria.
“We wouldn’t have been able to even start construction by now because of the significant amount of equity we would have had to raise for the project if it hadn’t been for EB-5,” said Acho Azuike, managing director for Contreras’ Houston company. “It’s a way to have cheaper capital and bring more equity to the table.” The Astoria, which is forecast to create more than 800 jobs, is nearly sold out. About a third of the investors have received provisional green cards, and the rest are awaiting approval from immigration officials.
Not all EB-5 investments are profitable. Critics say a lack of transparency and oversight make the program vulnerable to scams. “There is nothing in the EB-5 program that guarantees a deal is a good investment. The individual foreign investor is on his own on that or must seek competent advice,” according to Charles Foster, chair of the Houston immigration firm Foster LLP.
Foster believes that there should be greater disclosure of risks to the investor who today may rely primarily upon the representation of agents in their home countries. In addition, even applicants in this red carpet line can experience long delays, which can result in their money being tied up in escrow accounts. Thus, many reputable developers and others find the EB-5 program cumbersome.
Though problems with the EB-5 program ought to be addressed with comprehensive immigration reform, the current EB-5 program makes sense. We must have some means of sorting through the millions of applicants who wish to be residents. Those who can create jobs deserve priority.