Much has been said recently about China’s participation in the US EB-5 investor program. EB-5 is a visa category that allows a foreign national to become a permanent US resident by investing cash in a US business. Currently, the required amount is $500,000 to $1,000,000, although the requirement might be changing soon. Importantly, more Chinese nationals file petitions to access the EB-5 program than natives of any other country.
There is a “per-country” limit in addition to the annual EB-5 access limitation of 10,000. China’s exceeding its per-country limit for the past several years evidences the appetite of its citizens to emigrate to the US.
Unfortunately, the common practice of processing the EB-5 through an EB-5 compliant investment bank called a “Regional Center” tends to be uneconomic for the investor. A Regional Center is preapproved by the US Citizenship and Immigration Services to function as a clearing house for real estate developers and others looking to source capital for their projects. The investor seeking US permanent residency loses money on the deal, as investments typically yield only 1-2% annually, which does not even cover the Regional Center annual management fee of $30,000 - $50,000. This is before figuring in the government fees, together with legal fees of a qualified immigration attorney.
As Chinese citizens clamor for US permanent residency, but experience such a long wait because of the EB-5’s annual limitations, a viable alternative procedure should be considered.
In 2015, the US provided $125 billion in assistance to college students working on post-high school education. What would happen if we increased that annual amount by, say, $100 billion and, even better, had Chinese EB-5 applicants pay for it? I believe that we can, and it would create a scenario where everyone wins.
We need to consider a Special Immigrant Visa category for Funders of US Education, “SIVFUSE”. Clearly, the Chinese citizens that invest in EB-5 have at least $500,000 that they are willing to part with, knowing that the investment will be depleted significantly by fees and that the remainder might never be repaid.
If, instead, EB-5 applicants had the opportunity to donate to a US Student Education Fund administered by the US Department of Education, they would have prompt access to permanent resident status for themselves and their dependent family members, and there would be no annual limit on the numbers who could participate.
The benefits of such an approach would be felt on all sides. Chinese investors would circumvent the onerous wait times for their turn to come up in the EB-5 program without the risk of their children “aging out” of the process by turning 21 in the meantime, despite the benefits of the Child Status Protection Act.
For many of the EB-5 hopefuls, being in the US themselves is not the primary motivating factor. However, being able to bring their children here for the educational opportunities and the bright future they could have in the US is an extremely significant motivating factor.
One of the largest objections to the EB-5 program is the risk of fraud in the investment, the Regional Center or the investor’s intent. The Funders of the US Education program would eliminate all of that risk. Indeed, there cannot be any fraud in a program that is based openly on a donation of education funds to the US government for the benefit of US students. All of the current vetting requirements for the investors and the funds themselves would carry over from the EB-5 program.
Further, it would not cost anything to administer the program. Foreign citizens already are paying fees of thousands of dollars to the US government for access to the EB-5 program. Just for the I-526 petition, the US government fees currently are $3675; green card application fees accrue at a later date. This new program could charge a similar fee – enough to fund the cost of operating the program and to ensure that there is appropriate screening.
While the proposed program would not be limited to Chinese citizens, applicants from other countries are likely to continue accessing the current EB-5 program, as China is the only country where its “per-country” limitation creates a long delay.
In summary, it is a “win-win” for everyone. The Chinese citizens who are EB-5 hopefuls can avoid the wait and the risk of a child aging out. The United States economy benefits from an enormous injection of cash into the economy through education funding. US students benefit from access to additional education funding. The US education system benefits from a larger population of students who can afford post-high-school education. Finally, the United States benefits as a whole from a more educated population.
Lucine Aghajanyan obtained her LLM from Southern Methodist University. She is an experienced consultant, improving significantly the profitability of law firms in a variety of practice areas, through an enhanced web presence, practice restructuring and optimization of lawyer/paralegal scheduling and charge percentages. Lucine’s email address is email@example.com