In spite of these blips, it's safe to say that EB-5 still enjoys wide support among those who understand how it works. Congress has renewed the program every time it has come up for a vote, and it is, after all, hard to be against what's essentially a job creation engine, especially given the current rate of unemployment.
But that's not how David North sees it. Writing for the Center for Immigration Studies, a think tank members describe as "pro-immigrant, low-immigration" and that opponents would probably call "anti-immigrant," North recently suggested that USCIS should "simply realize that it has an unpopular, difficult program on its hands and stop promoting it."
Adding to the population should be done only for "worthy causes," he told EB5info, and investment immigration isn't among them. "I'm not that concerned about the lack of capital in the U.S.," he said.
Anyone wondering why EB5info would even care what an EB-5 opponent has to say should read North's most recent article about the program, which suggests that USCIS is applying a "more permissive" touch in its processing of investor petitions.
North points out that USCIS has, in fact, done the following since the 2010 fiscal year:
lowered the I-829 denial rate from 17 percent to 14 percent
made it easier to license EB-5 regional centers
lifted the number of investor approvals from 274 during FY 2010 to a projected 332 for FY 2011
Those data come directly from the June 2011 Stakeholder Meeting.
His point, of course, is that USCIS is getting soft on EB-5 petitions, something the EB-5 community may dispute in spite of data showing that the agency is approving more petitions than it had previously ? although not that many more.
But even if USCIS is approving more petitions, more than 1 in 10 I-829's are still denied. If you're an attorney, regional center, or EB-5 investor at the other end of that denial, it probably wouldn't seem like the agency is being "more permissive" with investor petitions.
Still, 14 percent isn't 17 percent. USCIS must be approving at least a few more petitions than it did last year.
North does acknowledge, however, that USCIS is being tougher on regional center applications, "turning down 31 percent of the initial ones, and 22 percent of the amended ones." But the reason for this, he surmises, is that "there are a lot of unacceptable proposals, probably even some trashy ones."
And here is where North makes, in our view, his point of greatest consequence. While certainly antagonistic to the EB-5 program, it is also, arguably, thoughtful:
[L]et's step back for a moment and ask what kind of serious venture capitalist seeks funding in half million dollar chunks, investments that can be withdrawn after 24 months? [?] As a result, EB-5 money does not seem to be going primarily into promising start-ups or into Silicon Valley; it is more likely to show up in decaying ski resorts in Vermont [?], in an uneconomical sewage treatment plant in the Mojave desert and in a questionable effort to revive the Watergate Hotel in Washington, D.C., and in similar ventures.
While EB5info and USAdvisors.org support the EB-5 visa and work with IIUSA to ensure the program's continued success, it's hard to deny that EB-5 funding can end up in less-than-promising ventures. Neither we nor our readers may agree with North's conclusions, but is anyone willing to argue that EB-5 funding does go exclusively to "promising startups?"
Simply put, the EB-5 visa program creates jobs and brings wealth to the United States. But as with any risky investment ? and EB-5 investments are definitely risky ? investors should learn everything they can about a given investment opportunity before making any commitments.