Association for Public Policy Analysis & Management

The EB-5 Immigrant Investor Program was established by Congress in 1990 to spur economic growth through entrepreneurship, immigration, and foreign direct investment.  By most accounts this program has not achieved its full potential to create jobs or attract capital to the United States.  The EB-5 Immigrant Investor Program reserves 10,000 visas for immigrant investors who make a minimum $500,000 or $1 million job-creating investment in the United States.  Immigrants who invest in targeted employment areas, defined as areas with an unemployment rate 150% of the national average, are eligible to make investments at the $500,000 amount.   Given the reduced investment amount, the vast majority of EB-5 Immigrant Investors finance projects in targeted employment areas. 

In 1993 Congress established the Regional Center Pilot Program.  This pilot program allows EB-5 Immigrant Investors to use economic forecasts to estimate the number of jobs created as a result of their investment, therefore creating an alternative avenue for investors to achieve the minimum 10 jobs required to obtain citizenship in the United States.  During the federal fiscal years of 2010 and 2011 approximately 90% of EB-5 Immigrant Investors made investments through Regional Centers.  

Though the EB-5 Immigrant Investor Program has attracted at least $6.8 billion of investment to the United States since its inception, some states have benefitted from the program more than others.  For example, during the federal fiscal years of 2010 and 2011, EB-5 Immigrant Investors financed Regional Center projects in only 24 states.  Using logistic regression, this paper explores the relationship between state-level EB-5 Investment during the federal fiscal years of 2010 and 2011 and the independent variables of market size, wage, unions, taxes, immigration, innovation, unemployment, and rural area.  The regression determined that immigration was a statistically significant determinant of EB-5 Investment during the federal fiscal years of 2010 and 2011.  A recommendation of this paper is that policymakers seeking to attract EB-5 Investment should support policies that encourage immigrants to settle within their states, as immigration has been shown to spur economic growth through entrepreneurship, job creation, and international trade.  This paper also encourages the release of disaggregated data on the EB-5 Immigrant Investor Program by United States Citizenship and Immigration Services (USCIS), as more detailed information on the program can lead to the identification of additional determinants of EB-5 Investment and inspire targeted policy solutions that can help states attract investment and jobs through the EB-5 Immigrant Investor Program.