EB-5 Investors No Longer Mislabeled as 'Entrepreneurs'

By David North on June 14, 2020

This administration has often gone out of its way to change specific policies because they had been adopted under the previous White House, a practice I find unattractive.

But here is an exception: Homeland Security no longer calls alien investors in the EB-5 program "entrepreneurs", a term suggesting innovation, and has substituted the much more accurate term "alien investors".

This is totally appropriate. More than 98 percent of the investors in the EB-5 program are completely passive ones, having nothing to do with the management of their money, which is typically invested in loan arrangements (at a very low interest rate) in urban real estate developments. In many cases, they have never seen the site of the investment. In fact, I bumped into one socially, found he had invested in New York City real estate, and learned he could not tell me in which of New York's five boroughs the site was.

In prior years the investor, his or her spouse, and the under-21 children all were put on their path to green cards by the investment of $500,000 in a pooled activity. Now the minimum investment is $900,000.

Recently, in the course of a bit of research unrelated to EB-5, I found myself looking at some USCIS statistics and noticed for the first quarter of this fiscal year, a listing of those seeking migration benefits of one kind or another. This is not a user-friendly document; its full name is "Number of Service-wide Forms Fiscal Year to Date by Quarter and Year Fiscal Year 2020" and it has tiny print, because there are 972 data cells in it. One needs both a guide and a looking glass to read it.

And then I happened on it. In the first quarter listings, it included "immigrant petition by alien investor". I compared that to the same form six months earlier and it said "petition by entrepreneurs". Both listings related to the same form, the I-526, which is filed by the would-be investors.

I complained eight years ago when the Obama administration started using the entrepreneur label, so it's only appropriate to compliment the current management on engaging in a bit of non-deception.