Job Creation
Beyond the Actual EB-5 Investment
by Boris Rubbani
With the EB-5 Regional Center Program up for renewal, and following the tumultuous one-year extension
approved last year, a lot of debate has centered on the impacts of the program and the entire EB-5 visa
category in general. However, most analysis and discussions have focused solely on the impacts of the $1
million or $500,000 invested in a targeted employment area (“TEA”). Beyond the jobs and accompanying
economic benefits gained from these projects are the benefits to the U.S. economy after the dust has
settled and the investor has obtained a green card.
Given the core criteria of the EB-5 program, only a certain
type of individual can participate. First, it predominately attracts the wealthy, or at least those willing to make a significant
investment into the U.S. economy. This is self-explanatory
given the $500,000 minimum investment threshold and
associated relocation costs involved. Secondly, it attracts more
risk tolerant and adventurous investors who are willing to
uproot their lives to start a new life in a foreign country. These
characteristics continue as these immigrants are integrated into
their U.S. communities. Coincidentally, these are the traits
found in more industrious sections of any economy – risk
tolerance, adventure seeking and entrepreneurial mindedness.
The positive side of immigrant-investors’ relocation is,
however, mostly overlooked in terms of economic impact
estimates. This includes their impact to real estate, household
spending, innovation, entrepreneurship and diversity both
in their local community and also on a national level. In this
article, we will look into some such impacts and highlight the
tremendous benefit this program is having on the American
economy.
Effect of Wealthy Immigrants on
Entrepreneurship
Researchers outside of EB-5 have carried out significant studies
on the impact of highly educated and accomplished immigrants on the U.S. economy. The United States has historically
attracted talent in many innovative fields, and studies have
connected this with a tremendous effect on growth. A study by
the center for Latin American studies at UC Berkeley (CLAS
2013) found that in 2006, immigrants founded 25 percent of
new high-tech companies with more than $1 million in sales,
generating income and employment throughout the whole
country. Innovation, entrepreneurial spirit and technological
growth are the driving force for any advanced country like the
United States. That being said, the ability to attract the most
innovative and creative minds, which are characteristic traits
of many EB-5 investors as evidenced by their business success
and amassed wealth, is a tremendous benefit to having the
EB-5 program.
Continued to page 126
Foreign-Born Share in Each Education Group, U. S. Workforce 2010
45%
40%
35%
30%
25%
20%
15%
10%
5%
0
High School
Dropout
High School
Diploma
Some
College
Associate’s
Degree
Bachelor’s
Degree
Master’s or
Professional
Ph.D
Ph.D (Science or
Engineering)
Figure 1: Foreign-born workers tend to cluster in high and low education groups. (Chart courtesy of Giovanni Peri.)
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