Attorney, Paradigm Counsel
The EB-5 immigrant investor visa program has the potential to provide significant economic benefits to the Seattle economy, especially to areas that are desperate for economic stimulus. Over the past years, new developments are rising up in various locations around the Greater Puget Sound area. Several of these local projects are financed by the foreign investors who raised capital for real estate developments and infrastructure programs in exchange for a green card that allows them to reside in the United States.
Congress initially created the EB-5 immigrant investor visa category in the Immigration Act of 1990 in the hopes of attracting foreign capital to the U.S. and creating jobs for American workers in the process. Since 1993, Congress amended the program by allowing for “regional centers” located in a Targeted Employment Area (TEA) to promote “economic growth” through the creation of jobs and “increasing domestic capital investment.”
What is the EB-5 Immigrant Investor Visa?
The EB-5 immigrant investor visa program presents foreign investors with the opportunity to obtain a U.S. green card in exchange for investing $1 million in regional center projects, unless the project is located in a “Targeted Employment Area”, which allows a reduced investment of $500,000. The EB-5 investment must be “at risk” capital invested into a “new business” venture. To get the visa, each investor must create full-time employment for at least ten qualifying U.S. citizen or immigrant workers. The investors themselves (and their family members who often immigrate with them) do not count towards this number. Presently, the program allows for 10,000 EB-5 visas to be granted each fiscal year, with 3,000 visas reserved for EB-5 immigrants investing through regional centers.
Since 2009, investors from China substantially outnumber investors from all other countries in Asia. China’s rapid economic growth over the last two decades has produced substantial wealth. Chinese investors are motivated by America‘s strong education and health systems and an easier path for future employment for their children. Other contributing factors are more stable political environment in the United States, our cleaner ecology, and the opportunity to choose the investment that best fits the entrepreneur’s individual preferences.
What are the National Economic Impact of EB-5 visa investments?
In a case study “The Economic Impact of Individual Immigrant investors in the EB-5 Program” by economist Dr. Scott Barnhart published in EB5 Investors Magazine, Dr. Barnhart examined the total economic impact on a local economy of a single EB-5 investment. The investor’s capital contribution, household expenditures and government spending were considered, as well as the results of a recent national immigrant statistics. Dr. Barnhart used a hypothetical economic model to project that assuming the investments and household expenditures are as calculated in the study, if “6,000 visas are issued per year, EB-5 investments would create up to 34,593 new jobs, contribute $2.86 billion to GDP (in 2013 dollars), and generate an additional $399.02 million and $278.36 million in federal and state and local tax revenue.” These are projections that are certainly hard to ignore.
In 2012, a total of 2,695 EB-2 visas were approved by the U.S. Department of State. Based on the results of the Dr. Barnhart’ case study, the EB-5 immigrant investor visa program had already created “15,541 new jobs, contributed an additional $1.286 billion of GDP, and generated $179.26 million and $125.05 million in federal and state and local tax revenues, respectively.”
What are the Economic Effects of the Designated Regional Centers in Washington State?
Currently, USCIS approved several EB-5 Regional Centers: 660 regional centers statewide and 37 regional centers in Washington State alone. These regional centers are licensed to set up projects and market them to foreign investors. You may find more information about the EB-5 investment visa program and a complete list of the approved regional centers on the www.uscis.gov.
Some of these regional centers and their local projects might sound familiar:
- Access the USA: the SR 520 Evergreen Floating Bridge Replacement, Hyatt Place at SeaTac , Seattle Tacoma Hotel;
- American Life, Inc. : Courtyard Marriott, Homeplace Center, among others around the U.S.;
- Farm for America: projects are allied toward the purchase and development of irrigated and non-irrigated agricultural property in the Columbia River Valley of Central Washington; Real estate acquisitions projects would be suitable for row and permanent crops;
- Great Ocean Capital Holdings LLC: The Port of Longview project that will become the only professional cool container terminal in US west coast and the biggest company-owned facility along Columbia River;
- Path America: the Everett Public Market, Potala Village in Everett, and Kirkland Aqua;
- Steve Smith Development LLC: 206-unit Cedar Park apartments in Seattle’ Lake City neighborhood, Victoria Park apartments (152 units) and the Interurban Senior Living Apartments (178 units).
The impact from each new wave of immigrant investors coming to the United States and Washington State each year is a new and distinct economic event. The economic effects of the EB-5 immigrant investor visa program are indeed quite large, resulting in even greater economic contributions to the Puget Sound economy.
Olga Guzhva can be reached at www.guzhvalaw.com