Michigan became the second state (after Vermont) in the nation to manage and operate its own Regional Center approved by the United States Citizenship and Immigration Services (USCIS)for an immigrant visa program (called EB-5 Program).
The Michigan center will work in conjunction with programs which try to encourage foreign investment in Michigan as well as keeping foreign students who study and graduate from state universities to stay and work in the state. This intensified immigration efforts, which are expected to comport with the Michigan Economic Development Corp.'s trade missions around the globe.
The State of Vermont Regional Center was established in 1997. The State Agency of Commerce and Community Development (VACCD) operates and supervises its EB-5 projects. In other worlds, the State approves each project and is responsible for continual EB5 compliance. The entire state (except metro areas) is designated a targeted employment area (TEA) which can be a rural or high-unemployment target area.
What is EB-5 Immigrant Investment Visa Program?
The federal EB-5 visa program is designed to provide legal permanent residents (green cards) and a path to citizenship for would-be immigrants who invest at least $1,000,000 in a qualified U.S. business and create 10 new full-time jobs as a direct result of the investment. The minimum investment is lowered from $1 million to $500,000.00 if the foreign investment is made in a business which is located in a rural or high-unemployment target area. Qualifying immigrants are not required to live in the same state they invest in. The EB-5 visa program is still a developing area of immigration law and has become one of the best options for foreign entrepreneurs who wish to immigrate to the U.S.
Direct Investment vs. Regional Center Investment
There are two ways a foreign investor can make an EB-5 investment depending on how actively an investor wants to participate: Direct Investment and Regional Center Investment. Direct investment is usually for those who want to be involved in day-to-day management or running an active business. A Regional Center investment involves minimal management requirements. Foreign investors in a Regional Center project are not required to live in the place of investment; rather, they can live wherever they wish in the U.S.
Most importantly, a Regional Center investment counts both indirect and direct jobs so it allows the investor to qualify by proving a combination of 10 direct and/or indirect employees, while a Direct Investment only counts jobs that were created directly as a result of the investment. Because of these advantages of Regional Center investments, over 90% of EB-5 investments are made through Regional Centers into a rural or high-unemployment target area-based projects.
Regional Center and Government Involvement
Government involvement in EB-5 ranges from no involvement, to support of private regional centers through education and letters of support, to directly operating Regional Centers either solely or via public-private partnerships. About a half of the highly active Regional Centers have direct government involvement at either the local or state level. For example, Hawaii, Iowa, Pennsylvania, South Dakota, the County of Los Angeles, and the City of New Orleans have developed EB-5 projects in several industry sectors with strong indications of expansion, growing employment needs, and high return on investments.
Nationally, there are over 470 EB-5 regional centers working to connect immigrants with local investment opportunities, according to USCIS. However, Vermont and Michigan are the only states to sponsor its own statewide Regional Center. Further, about only 10% of the Regional Centers are regarded as fully operational. Most of those fully operational Regional Centers have some level of state or city government involvement and those highly active Regional Centers have direct government involvement in the operation at either the local or state level.
When state and/or municipal government is involved, diversity of projects in a variety of industries is possible, particularly targeting rural areas to generate a sustained pipeline of projects that benefit the entire state. Further, the track records of Regional Centers with direct government involvement indicates that State or City affiliation provides many benefits including credibility, accountability, oversight, monitoring, continual EB-5 compliance, diversity of projects, and faster approvals of EB-5 visas. Even when governments are not directly involved in Regional Center operation, many still choose to support EB-5 Regional Centers in other ways.
EB 5 Industries
EB5 Projects have been developed in industries including but not limited to:
• Agriculture & Food Processing
• Alternative Energy
• Airport Development
• Harbor, Marine, and Coastal Rebuilding
• Health Care
• Health Services
• Heavy Manufacturing
• Higher Education
• Light Manufacturing
• Lodging, Hospitality, and Restaurants
• Manufacturing and Trade
• Motion Picture, Film, and Arts
• Port Redevelopment
• Public Transit Improvements
• Resort Industry
• Retail, Entertainment, and Gaming
• Service Industry
• Shipyard Development
• Transportation System
The EB-5 Visa Usage and Job Creation
In 1993, Congress allocated approximately 10,000 visas annually for EB-5 immigrant investors and their qualified family members but the program was underutilized due to issues and concerns about the program, including fraud and lack of established regulations. However, as the program is being stabilized and developed, the usage has dramatically increased. In FY 2011, for example, a total of 3,463 EB-5 visas were used and in FY 2012, a total of 7,641 EB-5 visas were issued. In FY 2013, a total of 8,567 EB-5 visas were issued. In just the first couple of months of FY 2014, USCIS has already received more than 7,000 EB-5 Visas applications. That number is up 50.2% in the same period as last year.
Foreign investors’ interest in the EB program is spreading not just in Asia, but from all corners of the globe: China, South Korea, Britain/Northern Ireland, India, Iran, Mexico, Canada, and Russia. China accounted for more than over 80%, compared to just 10% a decade ago, and South Korea accounted for over 10% of all EB-5 visas worldwide in recent years. Last year, nearly 6,900 visas were issued for Chinese nationals. EB-5 immigrant investors from all corners of the globe have provided an important alternative source of financing, benefiting projects in the U.S. – from Brooklyn, New York’s Atlantic Yards real estate development to a North Dakota factory which makes biodegradable food containers, to Vermont’s Jay Peak Resort improvements project.
Vermont’s Jay Peak Resort EB-5 project has attracted $250MM in foreign investment and has created more than 5000 jobs. By 2012, the City of Philadelphia had completed 23 EB-5 projects with foreign EB-5 investments of $390MM and created 5,830 new jobs. South Dakota, in 2006, attracted $50MM in foreign capital, which created over 1000 jobs for its expansion of a turkey processing plant and, in 2007, attracted $100MM for construction of a new gas power plant, which created over 2000 jobs.
The EB-5 program is advantageous for all concerned: job seekers, developers, immigrants, the economy, governments etc., and provides involved governments with an alternative vehicle to attract NEW foreign capital, which they would otherwise not have been able to acquire.
If you have questions about the EB-5 Program, please contact Sujin Kim, Esq. at (251) 379-8065/ (251) 387-2544 or email@example.com