The EB-5 visa program — which officially is known as the Immigrant Investor Program — originally was created in 1990 with the passage of the Immigration Act, which significantly restructured the immigration system in the US.
The new law, which was signed into law by US President Bill Clinton, included changes to non-immigrant visa categories, deportation rules, higher legal immigration limits, and other important revisions.
Drive New Investment
The purpose of the EB-5 program was to stimulate the US economy by allowing foreign investors the opportunity to permanently live and work in the US by making a substantial investment in the national economy and creating new jobs for US workers. At that time, the US was in the throes of a severe economic recession and was looking for new ways to stimulate the economy.
The EB-5 program got an additional boost in 1993 when Congress created the Immigrant Investor Pilot Program. This established the first EB-5 regional centers, which were business entities that were given special status by the US Citizenship and Immigrant Service (USCIS) to administer EB-5 investments and create jobs.
Changes to the Program
Throughout the 1990s, the EB-5 visa program underwent several major overhauls as a result of the discovery of lax enforcement of the program’s rules and instances of fraud in some EB-5investments.
In 1998, the USCIS required investors to provide proof that EB-5 investments originated from lawful sources and that investors were personally involved with their EB-5 projects. The agency also prohibited investment return guarantees, although this was later ruled to be illegal.
Regardless, as a result of those changes, the number of applicants to the program dropped significantly.
Stimulate New Participation
In 2003, more changes were implemented to the program, except this time they were designed to attract more new investors. One improvement was the creation of the Investor and Regional Center Unit, which oversees case auditing, form design, regulation development, and policy creation for the EB-5 program.
Although the EB-5 program is not a permanent program, in 2012 President Barack Obama authorized it to be extended until at least 2015.