By Ben Calder
On a recent trip to Washington, D.C. I marveled at the opulent structures of limestone and giant slabs of marble most of which are outlined with intricately detailed friezes. These gorgeous, historic buildings flanked by grassy, open spaces and bustling with all types of workers create an arresting scene that any large construction project should strive to achieve. These magnificent settings propel the current leaders of cities large and small to leave their own mark, but projects of this scale come with a considerable price tag. To create a grand and useful building does not come cheaply; there is the matter of acquiring the land, then constructing the building, and arguably the most important part is ensuring that there will be enough permanent, full-time jobs created to make the project worthwhile for the city. Unfortunately for the politicians the number of American’s willing to invest large money into commercial enterprise capital has slimmed down following the most recent economic recession, even as the US Dollar gains strength on the global market.
While Americans are afraid of seeing investments tank, there are foreign investors that still see enough strength in the United State’s economy to invest heavily in the construction of new buildings and factories. All around the world from sovereign wealth funds in the Middle East to high net worth Chinese individuals, people are trying to secure wealth by investing in the future of America. In terms of investing America is viewed as a safe bet, versus a young start-up company or developing nation per se. It seems understandable enough that one would want large amounts of their wealth in a safe investment and the balance of GDP growth with general United States banking securities create the perfect environment. Much safer than the high growth rate and low financial security afforded in China.
The mixture of uncertainty surrounding financial security in some countries with the private investment deficit in America bred a particular program in 1990 titled the, “Immigrant Investor Program”. More commonly referred to as EB-5, the program was initiated to help facilitate large scale foreign investment into the United States to fund new company operations and create full-time jobs in America. The basic requirements are an investment of $1 million or more in construction that will guarantee 10 full-time jobs for US citizens on US soil. Areas deemed in critical need of job growth only require a $500,000 investment.
It is possible to be a foreign investor in US companies and new construction without going through the Immigrant Investor Program, but the program offers the foreign investor the added protection of United States citizenship. The visa allows them to keep their money in the same manner as a US citizen, ideally in a nationally located bank that is backed by the Federal Reserve. Under these circumstances the United States sees vast economic gains; directly from the cash, later from the new jobs, and further money from the taxes of the newly immigrated citizen.
The fiscal benefits are pretty clear, but the shortcomings are equally substantial. Creating a market for citizenship antagonizes the ever expanding gap between the ultra wealthy and remaining population. It also shines a blatant spotlight on poor governing practices with the willingness of the United States to put a price tag on citizenship and other foreign governments with enough corruption that their wealthiest citizens want to safe harbor money overseas.
March 17th, 2015
“EB-5 Immigrant Investor Process.” US Citizenship and Immigration Services. United States Government, 25 June 2014. Web. 5 Mar. 2015. <http://www.uscis.gov/working-united-states/permanent-workers/employment-based-immigration-fifth-preference-eb-5/eb-5-immigrant-investor-process>.
Sullivan, Kevin. “Foreign Citizens Making Big Investments in U.S. in Exchange for Green Cards.” Washington Post. The Washington Post, 21 Mar. 2013. Web. 6 Mar. 2015. <http://www.washingtonpost.com/politics/foreign-citizens-making-big-investments-in-us-in-exchange-for-green-cards/2013/03/21/ecf250d2-8d72-11e2-b63f-f53fb9f2fcb4_story.html>.
Wiener, Aaron. “Green Construction: Why Rich Foreign Investors Are Financing D.C.’s Building Boom—in Exchange for Legal Residence in the U.S. – Washington City Paper.” Washington City Paper. CL Washington Inc, 27 June 2014. Web. 4 Mar. 2015. <http://www.washingtoncitypaper.com/articles/46035/green-construction/>.