Does the EB-5 Immigrant Investor Green Card Program impact the US economy?
Does the EB-5 Immigrant Investor Green Card Program have an economic impact on the US economy?
According to a recent study by the Association to Invest in the USA (IIUSA), the answer is yes. The IIUSA is a national trade association that represents EB-5 Regional Centers. IIUSA commissioned the report titled “Economic Impacts of the EB-5 Program 2012: An Economic Development Program for the 21st Century.
The EB-5 program was created by Congress in 1990 to benefit the US economy by attracting investment money from foreign investors. Under the program, each investor is required to show that at least 10 new jobs for US workers were created (or saved) as a result of the money invested. The minimum amount of money invested is either $1 million, or $500,000 if the funds are invested in certain high-unemployment or rural areas.
Key findings of the 2012 report were:
- Total economic impact was $3.39 billion to the U.S. GDP and supported over 42,000 U.S. jobs. Total economic impact was calculated by combining the benefits of the EB-5 investments, household spending of immigrant investors, and other EB-5 related spending.
- Over 85% of the EB-5 investment capital — $1.55 billion – was invested in the construction sector. Other sectors receiving EB-5 investment capital include chemical manufacturing, mining, manufacturing, and power generation.
- Pennsylvania, New York, California and Illinois top the list of states with the largest level of investment and these states saw the largest investment impacts. The report indicates that more than 8,000 jobs in California were supported by EB-5 investment.
- $1.8 billion was invested by EB-5 Regional Center investor, which contributed $2.5 billion to the US GDP and supported 33,134 American jobs.
- Household spending by the immigrant investors and their families contributed approximately $383 million to the US GDP and supported more than 4,700 jobs in 2012.
The report used economic modeling methods to track data on I-526, I-829, and I-924A applications, and approval/denial statistics for EB-5 Regional Centers to determine GDP and job growth impacts. Approximately 95% of the capital invested in the US under the EB-5 program is through Regional Centers.
It would be interesting to see the economic impact of the remaining 5% of investors who create and invest in their own businesses, which is called a direct investment. Most of these entrepreneurs/investors who I have represented in Ohio, Indiana, and Michigan have invested much more than the minimum that was required and each have created more than the minimum number of jobs required. Their economic impact to the local economy, especially in rural areas or other areas with high unemployment rates, is tremendous.