EB-5 Investment Sharply On the Rise

NEW YORK CITY—In the latest indicator of the strength of the global property market, Mainland China attracted the most applicants to the federal EB-5 program during the last year as the number of millionaire households in China soared, according to a new white paper by Savills Studley which examines the impact on commercial real estate of EB-5 investment.

Authored by Heidi Learner, the firm’s chief economist, the report discusses how the flow of cross-border investment from China into the US is impacting foreign investment, public policy, and the future of development.

EB-5—a federal program where foreign citizens can invest in a US business in exchange for a green card—saw one of its most active years on record to date. The new study shows that total EB-5 issuance worldwide went from 8,564 visas in 2013 to 10,692 visas at the end of the 2014 fiscal year. Of the visas issued in 2014, Mainland China comprised just over 85.4% of the total (9,128 visas), as compared to all other countries (1,564 visas). And in 2013, Mainland China made up nearly 81% of total issuance (6,895 visas), a steady increase from just over 80% (6,124 visas) in 2012 and 69.5% in 2011 (2,408 visas).

Up until this past year, the overall EB-5 visa quota had never been met in either an aggregate or on a per-country basis. However, in late August of 2014, the EB-5 preference category became unavailable for Chinese applications, implying that the maximum allocation of EB-5 visas for Chinese applicants had been reached for the current fiscal year.

In addition, Learner says that the visa backlog and the extensive list of pending applications detailed in the report are further indications of the program’s robust demand. “The 2015 allotment of EB-5 visas for Mainland China applicants is likely to be reached before the end of the current fiscal year in September 2015, particularly if Chinese appetite for the visas is any indication,” she says.

The report also found that the current waiting list for EB-5 visas is dominated by citizens of mainland China. The waiting list for EB-5 applicants outside the US shows a total of 6,418 people, approximately 81% of whom are from China.

Further, regional centers—which are entities that have been designated by the US Citizenship and Immigration Services (USCIS) to attract immigrant investors in specific areas to promote economic growth—also are on the rise. There were just 11 regional centers at the end of fiscal year 2007, and as of December 1, 2014, the USCIS approved 601 regional centers, many of which operate in multiple states. For example, New York has 52 at the start of Q4 2014.

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