The Immigration Act of 1990 created, among other immigration reforms, the five employment-based preferences. The EB-5 Immigrant Investor Program was created with the intention of bringing entrepreneurs and foreign investors to the United States in order to create jobs and stimulate the U.S. economy. However, the program was not widely utilized at its creation, and in 1992 the Immigrant Investor Pilot Program (IIPP) was launched to improve the process.

Legislative Procedure Flow Chart

One provision of the IIPP was the creation of Regional Centers, which have become vital to the EB-5 program. Prior to the creation of Regional Centers, an EB-5 applicant had to be actively involved in the management of their proposed enterprise. By investing in a Regional Center, indirect jobs created from the infusion of capital can be counted towards the 10-job requirement, allowing more passive investing. In 2017, there are almost 900 Regional Centers and over 95% of all EB-5 investments were made through a Regional Center. The initial 5-year pilot for Regional Centers has been consistently extended by Congress, most recently in May 2017 through the end of the 2017 fiscal year.

In the mid-1990s, a private company acted as an intermediary for some EB-5 applicants. This company, AIS, offered potential immigrants the ability to meet the $500,000 minimum investment via a $125,000 payment in cash and the remaining amount as a promissory note. The note would then be forgiven once the applicant was approved for permanent residency. This arrangement was considered in accordance with EB-5 immigration policy at the time, but concerns about fraud and abuse in the EB-5 program led to an investigation by the Government Accountability Office (GAO). As a result, the U.S. Citizenship and Immigration Services (USCIS) issued more stringent EB-5 requirements and policy guidance in 1998.

These tougher requirements and the investigation caused hundreds of cases in processing to be suspended and a sharp decrease in the amount of EB-5 applications. The low utilization of the program prompted investigation and additional reforms in the 2000s. This included the 2005 creation of the Investor and Regional Center Unit (IRCU) within the USCIS, a special unit dedicated to overseeing the EB-5 program. The unit improved coordination and consistency in the EB-5 program until 2009, when it was rescinded. New policy guidance in 2009 established the California Service Center as the centralized EB-5 processing center.

In the late 2000s, the U.S. and world economy went through what is known at the Great Recession. The global recession, as defined by the International Monetary Fund (IMF) criteria, lasted for the 2009 calendar year. In the U.S., the National Bureau of Economic Research declared a recession beginning in December 2007 and lasting until June 2009. This eighteen-month recession greatly reduced available capital in the United States, which led to renewed interest in the EB-5 program to bring in foreign capital.

In 2011, the USCIS aimed to increase utilization of the EB-5 program to help meet domestic funding shortfalls. Reforms included streamlining processes and consolidating program direction into an overarching policy memorandum. The USCIS efforts paid off and interest in the EB-5 program steadily increased. The number of EB-5 applications increased almost fivefold from the 2007 fiscal year to the 2011 fiscal year. Ever since the 2014 fiscal year, the EB-5 visas have been issued to capacity.

As the EB-5 visa program in its current form is set to expire on September 30, 2017, the future of the program is once again in the hands of Congress. While the program has been extended in the past, it has critics on both sides of the aisle and is certain to be an item of legislative interest in the upcoming session.