New World, New Policy: Entrepreneurial Money Produces Residency Permits

A successful Chinese entrepreneur, showed me a news article. It reported that wealthy Chinese could buy an American passport and become US citizens. Is this really true? What are the implications of this visa program?

The US Employment Based Fifth Preference (EB-5) program was established by the U.S. Congress in 1990, to link investment, employment and residency. Three years later, the program language was relaxed from “to create ten direct employment opportunities”, to “directly or indirectly create 10 job opportunities.” This is broad and flexible wording. It is designed for entrepreneurial and wealthy investors outside the US, who fund a new commercial enterprise of  at least $500,000 for investments. Under the program, those entrepreneurs, their spouses and their unmarried children under 21 years old can apply for green cards permitting residency.The objective is to attract foreign investments to the U.S., and to stimulate economic development and job creation.

EB-5 demand has increased rapidly. In 2012, President Obama extended the program. In May of 2017, Congress extended the EB-5 Program until September 2017. There are many supporters.

In 2014, 10 thousand EB-5 petitions were filed with the United States Citizenship and Immigration Services (“USCIS”). Overall, 5,115 have been approved. Over $2.5 billion investments were attracted. An additional $6.2 billion are awaiting federal adjudication. EB-5 capital is also an attractive low cost funding tool for project developers in the U.S. It offers foreign investors a way to permanent residency that is not backlogged by other applications and does not require sponsorship by a US employer.

Throughout the world today,  numerous programs like the EB-5 have been established. In Australia for example, foreign investors are granted the opportunity to immigrate, but only receive temporary residency for four years. An investment of AUD $1.5 million in an Australian company ( U.S $1.2 million) is required. France allows foreign investors to obtain residency for 10 years by making a “long term  and non-speculative investment of at least € 10 million (U.S $11.8 million) in industrial or commercial assets.”

There is a standard moral objection to the EB-5 program: The United States should not be in the business of selling the right to live there. This claim suffers from a slight misunderstanding. In effect, the government gives the visas away — to profit-making businesses that have jumped through the program’s requisite bureaucratic hoops. Then the companies can solicit investment based on the promise of permanent residency. In spite of ten thousand slots a year, 40,000 investors still wait for a green card. Obviously investor needs have not been met.

Investment immigrants are in high supply. The U.S government should use the opportunity and open the gates to them. The U.S. has an immigration culture, with a spirit willing to absorb both elites and  refugees of the world.

However, change must come; the program needs to be refined in terms of size of investment, number of jobs generated, industry direction, geographic location, and job recipients. I believe that the investment minimum should be $2.5 million, and the American job creation shall be at least 25. Then we can continue this program helping both investors and employees; a noble outcome!

Why Not Show Your Face to the World?

With todays class period focusing on “Faith and Culture in the International Workplace,” it follows that the current event reported should highlight a key battle around the world: how should governments and businesses respond to the religious use of Islamic head coverings commonly known as burkas?

On September 22nd, voters of the Ticino Canton in Switzerland voiced their opinions. A “Canton” in Switzerland is the rough equivalent of a state here in the US. A resounding two thirds of voters backed a bill that stated: nobody in public streets or squares may veil or hide their face.” While the wording of the plan does not specifically mention Islamic practice, burkas or niqabs, the law is aimed predominately at Muslim women. Giorgio Ghiringhelli, the man responsible for initiating the bill, states that the ban “puts a stop to the inevitable spread of niqabs and burkas.” This xenophobia has played a major role on the international scale since 2011, when France outlawed the wearing of burqas in Public. While the bill was rejected upon reaching the Swiss parliament, it emphasizes growing tensions around the world that not only raise issues of human rights, but also lead us to question the impacts on international interactions.

At the time, the article rose questions of the laws effect on tourism. Surely no Muslim women would travel to Switzerland with this law in effect. But many people were not worried, believing that regardless of the law, not many people from Arab nations visit Switzerland anyway. But on the large scale, these types of laws could greatly influence international business practices because they limit the spread of businesses practices. Any company with origins in an Islamic country would most likely think twice about creating a branch of business in a country that considers outlawing its basic beliefs of female modesty. Thereby causing any country with a law outlawing burqas or other religious head covering to lose a significant amount of business.

This text was written and presented by Mr. Nima Malek, Student at the McDonough School of Business of Georgetown University in the course on International Business (STRT-261-01) on October 28th, 2013. You can contact the author here.