Cash-for-visa scheme: Spotlight on foreign investor visas

Kushner Companies’ recent pitch to wealthy Chinese investors to consider investing $500,000 in a New Jersey luxury apartment complex as a means to acquiring EB-5 visas puts foreign investor visas back in the spotlight. Congress created the EB-5 Program in 1990 to stimulate the U.S. economy through job creation and capital investment by foreign investors. Interest in the program grew during the Great Recession as a vehicle for acquiring capital investments in the real estate market. Competition for the annual allotment of 10,667 visas has been fierce.

According to the CRS report, Foreign Investor Visas: Policies and Issues (Jan. 27, 2010, RL33844) investor visas offered by the United States operate on the principle that foreign direct investment into the United States should spur economic growth in the United States. “To attract foreign investors, research indicates that temporary migrants are motivated most significantly by employment and wage prospects, while permanent migrants are motivated by professional and social mobility. Theoretically, however, it is unclear to what extent potential migration provides additional incentive for investment activity. Investors from developed countries may sometimes lack incentive to settle in the United States since they can achieve foreign direct investment (FDI) and similar standards of living from their home country. Yet, in cases where foreign investors have been attracted, the economic benefits have been positive and significant,” quoting from the CRS report. — Joe

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