What Would a Biden Victory Mean for the EB-5 Program

The EB-5 visa investor program has been around since 1990. It offers a path to US Citizenship to people who lend a minimum of $900,000 to a U.S.-based project that creates or retains at least 10 US jobs. 

While the Trump administration cracked down on immigration, he’s spared EB-5, which has dealt with accusations of abuse. Still, the program has faced challenges in recent years.

Ronald Fieldstone, an attorney at Saul Ewing Arnstein & Lehr, thinks a Biden win would rejuvenate interest in the program as students and technology workers would express interest in moving to the US.

“I think the Democrats have taken the position that we’re all immigrants sooner or later and that immigration has helped make the country what it is,” Fieldstone says.

But Congress will also play a huge role in what happens to EB-5. The US Citizenship and Immigration Services (USCIS), which oversees Homeland Security, runs the EB-5 program. The Judiciary Committee oversees Homeland Security. 

Diane Feinstein (D-Calif.), who would head The Judiciary Committee if the Democrats won the Senate, or Chuck Grassley (R-Iowa), would lead the committee if the Republicans took control of the Senate, introduced legislation to end the program in 2017.

“The EB-5 program is inherently flawed. It says that U.S. citizenship is for sale. It is wrong to have a special pathway to citizenship for the wealthy while millions wait in line for visas. I agree that the time has come to end EB-5,” Feinstein said in a statement on her website. “The Securities and Exchange Commission has filed charges in case after case of fraud connected to this troubled program. I look forward to working with Chairman Grassley to advance our legislation.”

Grassley was behind Federal regulatory updates in 2019 that severely hindered EB-5. “The amount of new applicants coming in and investing money was cut to a trickle because the program became much more restrictive,” Fieldstone says.

Additionally, in September 2019, Grassley and Patrick Leahy introduced legislation to tackle fraud, abuse and national security threats in the EB-5 Investor Visa Program, which was not passed into law. The EB-5 Reform and Integrity Act addressed concerns that Grassley said the Department of Homeland Security has long expressed about ongoing abuse and exploitation of vulnerabilities in the program. 

Fieldstone hopes to get those Federal regulatory updates reversed through either court, Congressional or Presidential action. “Congress passing legislation supersedes the regulations that have now been adopted,” he says. “So we’re hoping we’ll see some changes. That is more likely where the Senate comes into play, depending on who is controlling the Senate because they oversee the Judiciary, and they set the template.”

Legislators don’t always support EB-5 along party lines. Often there is an urban-rural split in support since most of the program dollars get invested in urban areas. 

“It was largely bipartisan for many years up until 2015,” says Rohit Kapuria, an attorney at Saul Ewing Arnstein & Lehr. 

But still, the White House sets the tone for immigration and EB-5. 

“The senatorial and the congressional element of propping up the program are going to be important, but it’s important that any new administration that comes in should have a somewhat positive attitude about just how much immigrants contribute,” Fieldstone says. “That’s going to drive more dollars, whether it is EB-5 or EB-2, which is another program, into the United States.”

If EB-5 isn’t supported, Fieldstone thinks the US will suffer.

“We are losing opportunity,” he says. “A lot of countries have been benefiting very strongly from their regular immigration programs, as well as the investment immigration programs. If we have another four years of this administration, the belief is it will have some negative effects.”