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With the current economic downturn, Members of the 111th Congress are likely to be faced with
many policy options aimed at economic improvement, including the possible consideration of
amending visa categories for foreign investors. Foreign investors are often viewed as providing
employment opportunities for U.S. citizens rather than displacing native workers. Yet, extending
foreign investor visas provides several potential risks as well, such as visa abuses and security
concerns. Thus, a potential policy question for Congress—and particularly legal permanent
resident (LPR) investors—is whether the benefits reaped from allocating visas to foreign
investors outweigh the costs of denying visas to other employment-based groups.
There are currently two categories of nonimmigrant investor visas and one category of immigrant
investor visa for legal permanent residents (LPR). The visa categories used for nonimmigrant
investors are: E-1 for treaty traders; and the E-2 for treaty investors. The visa category used for
immigrant investors is the fifth preference employment-based (EB-5) visa category. According to
Department of Homeland Security (DHS) statistics, there were 229,642 nonimmigrant treaty
trader and investor visa arrivals in the United States in FY2007. For the same time frame, DHS
reported the arrival of 806 LPR investors.
When viewed from a comparative perspective, the investor visas of the United States are most
closely mirrored by those of Canada. The LPR investor visa draws especially strong parallels to
the Canadian immigrant investor visa, since the latter served as the model for the former.
Comparing the admissions data between these two countries, however, reveals that the Canadian
investor provision attracts many times the number of investors of its United States counterpart.
Yet, both countries showed an upward trend in immigrant investor visas in the last two years.
The 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. According to
the classical theory, if these investments are properly targeted towards the U.S. labor force’s skill
sets, it should reduce the international migration pressures on U.S. workers. 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.
Immigrant investors have been subject to notable administrative efforts in the past couple of
years. In 2005, DHS developed the Investor and Regional Center Unit (IRCU) to govern matters
concerning LPR investor visas and investments to better adjudicate petitions and coordinate
investments. In the 111th Congress, the Omnibus Appropriations Act, 2009 (H.R. 1105), would
extend the IRCU program through the end of FY2009. The program is currently due to sunset on
March 6, 2009. This report will be updated as warranted.

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Introduction ..................................................................................................................................... 1
Background ..................................................................................................................................... 1
Immigrant Investors ........................................................................................................................ 2
Goals ......................................................................................................................................... 3
Requirements ...................................................................................................................... 3
Immigrant Investor Pilot Program ...................................................................................... 4
LPR Investor Visa Numbers...................................................................................................... 5
Nonimmigrant Investor Visas.......................................................................................................... 8
E-1 Treaty Trader .................................................................................................................... 10
E-2 Treaty Investor...................................................................................................................11
Nonimmigrant Investor Visa Numbers.................................................................................... 12
U.S. and Canadian Comparisons ................................................................................................... 16
Analysis of the Relationship Between Investments and Migration............................................... 18
Less Economically Developed Countries ............................................................................... 19
Temporary and Permanent Investors....................................................................................... 20
Multiplier Effects .................................................................................................................... 21
Administrative Efforts ................................................................................................................... 22
Fraudulent Investments ........................................................................................................... 22
IRCU Expansion ..................................................................................................................... 23
New Orleans............................................................................................................................ 23
Current Legislation and Potential Issues for Congress.................................................................. 24
South Dakota International Business Institute ........................................................................ 29
CanAm Enterprises ................................................................................................................. 30

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Figure 1. LPR Investor Visas Issued by Type, FY1998-FY2007 .................................................... 8
Figure 2. E Treaty Trader and Investor Visas Issued by Region, FY2008 .................................... 13
Figure 3. Immigrant Investors to Canada and the United States, 1996-2005................................ 17

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Table 1. United States LPR Investor Visa Admissions, FY1996-FY2007 ..................................... 6
Table 2. Nonimmigrant Treaty Trader and Investor Admissions, FY2007................................... 14
Table 3. E Treaty Traders and Investors Admitted by State of Destination, FY2007.................... 15
Table A-1. E-Class Visa Privileges by Year of Attainment............................................................ 25

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Appendix A. E-Class Visa Privileges by Year of Attainment ........................................................ 25
Appendix B. Immigrant Investor Pilot Program Projects............................................................. 29

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Author Contact Information .......................................................................................................... 31

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With the current economic downturn, Members of the 111th Congress are likely to be faced with
many policy options aimed at economic improvement. A focus of past debates has been on the
impact immigrants have on jobs and wages. Yet, these discussions frequently take on a different
focus when it comes to foreign investors, in part because such visas are targeted at immigrants
that are poised to inject capital into the economy and create employment. Foreign investors are
often viewed as providing employment opportunities for U.S. citizens rather than displacing
native workers. Thus, Congress has in previous years been willing to set aside both temporary
and permanent visas for foreign investors with the goal that this visa distribution would net
positive economic effects. Yet, extending foreign investor visas provides several potential risks as
well, such as visa abuses and security concerns.
With the extension of the immigrant investor visa pilot program—a program aimed at granting
permanent immigrant visas for investments into certain limited liability corporations—by a
continuing resolution until March 6, 2009,1 Members of Congress will have to decide if the
current policy towards foreign investors should be maintained, or if a different set of policies
should be implemented. The central policy question surrounding foreign investors—and
particularly legal permanent resident (LPR) investors—is whether the benefits reaped from
allocating visas to foreign investors outweigh the costs of denying visas to other employment-
based groups. The subsequent analysis provides a background and contextual framework for the
consideration of foreign investor visa policy. After a brief legislative background, this report will
provide discussions of immigrant and nonimmigrant investors visas, a comparison of U.S. and
Canadian immigrant investor programs, an analysis of the relationship between investment and
migration, and finally a review of current issues.
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Since the Immigration Act of 19242 the United States has expressly granted visas to foreign
nationals for the purpose of conducting commerce within the United States. Although foreign
investors had previously been allowed legal status under several Treaties of Friendship,
Commerce and Navigation treaties, the creation in 1924 of the nonimmigrant treaty trader visa
provided the first statutory recognition of foreign nationals as temporary traders. With the
implementation of the Immigration and Nationality Act of 1952 (INA), the statute was expanded
to include nonimmigrant treaty investors—a visa for which trade was no longer a requirement.3
Nonimmigrant visa categories for traders and investors have always required that the principal
visa holder stems from a country with which the United States has a treaty.4 The nonimmigrant
visa classes are defined in §101(a)(15) of the INA. These visa classes are commonly referred to
by the letter and numeral that denotes their subsection in §101(a)(15) of the INA, and are referred
to as E-1 for nonimmigrant treaty traders and E-2 for nonimmigrant treaty investors.

1 P.L. 110-329, §144.
2 43 Stat 153.
3 INA §101(a)(15)(e)(ii).
4 INA §101(a)(15)(e).
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Unlike nonimmigrant investors, who come to the United States as temporary admissions,
immigrant investors are admitted into the United States as LPRs.5 With the Immigration Act of
1990,6 Congress expanded the statutory immigrant visa categories to include an investor class for
foreign investors. The statute developed an employment-based (EB-5) investor visa for LPRs,7
which allows for up to 10,000 admissions annually and generally requires a minimum $1 million
investment. Through the Immigrant Investor Pilot Program, investors may invest in targeted
regions and existing enterprises that are financially troubled. This pilot program was extended by
the Basic Pilot Program Extension and Expansion Act of 20038 to continue through FY2008.
Foreign investors are generally considered to help boost the United States economy by providing
an influx of foreign capital into the United States and through job creation. For investor
immigrants, job creation is an explicit criterion, while with the nonimmigrant visa categories
economic activity is assumed to spur job growth. Additionally, foreign investors are often
associated with entrepreneurship and increased economic activity. Critics, however, believe that
such investors may be detrimental since they potentially displace potential entrepreneurs that are
United States citizens.
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There is currently one immigrant class set aside specifically for foreign investors coming to the
United States.9 Falling under the employment-based class of immigrant visas, the immigrant
investor visa is the fifth preference category in this visa class.10 Thus, the immigrant investor visa
is commonly referred to as the EB-5 visa.

5 The two basic types of legal aliens are immigrants and nonimmigrants. As defined in the INA, immigrants are
synonymous with legal permanent residents (LPRs) and refer to foreign nationals who come to live lawfully and
permanently in the United States. The other major class of legal aliens are nonimmigrants—such as tourists, foreign
students, diplomats, temporary agricultural workers, exchange visitors, or intracompany business personnel—who are
admitted for a specific purpose and a temporary period of time. Nonimmigrants are required to leave the country when
their visas expire, though certain classes of nonimmigrants may adjust to LPR status if they otherwise qualify.
6 P.L. 101-649.
7 INA §203(b)(5).
8 P.L. 108-156, 8 USC §1324a note.
9 The INA provides for a permanent annual worldwide level of 675,000 legal permanent residents (LPRs), but this level
is flexible and certain categories of LPRs are permitted to exceed the limits, as described below. The permanent
worldwide immigrant level consists of the following components: family-sponsored immigrants, including immediate
relatives of U.S. citizens and family-sponsored preference immigrants (480,000 plus certain unused employment-based
preference numbers from the prior year); employment-based preference immigrants (140,000 plus certain unused
family preference numbers from the prior year); and diversity immigrants (55,000). Immediate relatives of U.S. citizens
as well as refugees and asylees who are adjusting status are exempt from direct numerical limits. For further discussion,
see CRS Report RL32235, U.S. Immigration Policy on Permanent Admissions, by Ruth Ellen Wasem.
10 The INA provides that each category of immigrants has a set of preferences for the classes within that category.
These preferences determine the priority of visa distribution for each category depending on certain formulas provided
for in the INA. In the case of the LPR investor visa, being the fifth preference (and therefore the lowest) within the
employment-based category, it has an annual maximum visa allocation of 10,000.
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The basic purpose of the LPR investor visa is to benefit the United States economy, primarily
through employment creation and an influx of foreign capital into the United States.11 Although
some members of Congress contended during discussions of the creation of the visa that potential
immigrants would be “buying their way in,” proponents maintained that the program’s
requirements would secure significant benefits to the U.S. economy.12 Proponents of the investor
provision offered predictions that the former-Immigration and Naturalization Service (INS)
would receive approximately 4,000 applications annually. These petitioners’ investments, the
drafters speculated, could reach an annual total of $4 billion and create 40,000 new jobs.13 The
Senate Judiciary Committee report on the legislation states that the provision “is intended to
provide new employment for U.S. workers and to infuse new capital into the country, not to
provide immigrant visas to wealthy individuals” (S.Rept. 101-55, p.21).
ȱ
As amended by the Immigration Act of 1990,14 the Immigration and Nationality Act (INA)
provides for an employment-based LPR investor visa15 program designated for individuals
wishing to develop a new commercial enterprise16 in the United States (INA §203(b)(5)). The
statute stipulates that
• The enterprise must employ at least 10 U.S. citizens, legal permanent residents
(LPRs), or other work-authorized aliens in full time positions. These employees
may not include the foreign investor’s wife or children.
• The investor must further invest $1 million17 into the enterprise, such that the
investment goes directly towards job creation and the capital is “at risk.”18
However, if an investor is seeking to invest in a “targeted area”19 then the
required capital investment may be reduced to $500,000.20 For each fiscal year,
7.1% of the worldwide employment-based visas (roughly 10,000 visas) are set

11 3 Charles Gordon, Stanley Mailman, and Stephen Yale-Loehr, Immigration Law and Procedure, § 39.07 (Matthew
Bender, Rev. Ed.).
12 For debate on this issue, see 136 Cong. Rec. H.R. 75 (July 12, 1990).
13 The West Group. New Pilot Program for Immigrant Investors. 70 Interpreter Releases 1129. August 30, 1993.
14 P.L. 101-649.
15 This visa category is for permanent immigrants and should not be confused with the E-2 Treaty Investor
nonimmigrant visa.
16 Since 2002, applicants have also been allowed to invest funds in “troubled businesses.” These businesses must have
been in existence for at least two years, and must have incurred a net loss of at least 20% of the business’ net worth
(prior to the loss) during the twelve- or twenty-four-month period prior to filing the petition (8 CFR §204.6(e)).
17 These funds must be demonstrated to have been obtained lawfully. Generally, any burden of proof to show
qualifying status for an EB-5 lies with the applicant (8 CFR §204.6(j)).
18 Depositing the funds into a corporate account does not qualify as making the investment “at risk.” Clear guidelines
for demonstrating that the capital is”at risk” do not exist in the regulations (8 CFR §204.6(j)).
19 “Targeted areas” are either rural areas or areas with unemployment rates of at least 150% of the national average. A
“rural area” is defined as one not within a metropolitan statistical area or the outer boundary of a city or town with a
population of 20,000 or more.
20 8 CFR §204.6(f).
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aside for EB-5 investors, of which 3,000 are reserved for entrepreneurs investing
in “targeted areas.”21
• The business and jobs created must be maintained for a minimum of two years.22
According to regulations, enterprises being proposed need not be backed by a single applicant.23
Multiple applicants may provide financial backing in the same enterprise, provided that each
applicant invests the required minimum sum and each applicant’s capital leads to the creation of
10 full-time jobs. The applicant may also combine the investment in a new enterprise with a non-
applicant who is authorized to work in the United States. Furthermore, each individual applicant
must demonstrate that he or she will be actively engaged in day-to-day managerial control or as a
policymaker.24 Petitions as a passive investor will not qualify.25 However, since limited
partnership is acceptable, regulations do not prevent the investor from living in another location
or engaging in additional economic activities.
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The Immigrant Investor Pilot Program differs in certain ways from the standard LPR investor
visa. Established by §610 of P.L. 102-395 (October 6, 1992), the pilot program was established to
achieve the economic activity and job creation goals of the LPR investor statute by encouraging
investors to invest in economic units known as “Regional Centers.”26 Regional Center designation
must be approved by the Department of Homeland Security’s (DHS) United States Citizenship
and Immigration Service (USCIS), and is intended to provide a coordinated focus of foreign
investment towards specific geographic regions. Areas with high unemployment are especially
likely to receive approval as a Regional Center, since they are less likely to receive foreign capital
through foreign direct investment (FDI)27 (although the basic requirements apply to all regional
petitions).28 Up to 5,000 immigrant visas29 may be set aside annually for the pilot program. These

21 INA §203(b)(5).
22 8 CFR §204.6(j).
23 8 CFR §204.6(g).
24 This latter criterion may be demonstrated through board membership, status as a corporation officer, or qualifying as
a limited partner under the Uniform Limited Partner Act (ULPA) (8 CFR §204.6(i)).
25 8 CFR § 206.6.
26 A Regional Center is defined as any economic unit, public or private, engaged in the promotion of economic growth,
improved regional productivity, job creation and increased domestic capital investment.
27 FDI is defined as an investment made by a foreign individual or company in an enterprise residing in an economy
other than where the foreign direct investor is based.
28 The basic requirements for Regional Center designation state that applicants must show how their proposed program
will:
• focus on a geographic region (8 CFR 204.6(m)(3)(i));
• promote economic growth through increased export sales, if applicable;
• promote improved regional productivity (8 CFR 204.6(m)(3)(i));
• create a minimum of 10 jobs directly or indirectly per investor (8 CFR 204.6(m)(3)(ii));
• increase domestic capital investment (8 CFR 204.6(m)(3)(i));
• be promoted and publicized to prospective investors (8 CFR 204.6(m)(3)(ii));
(continued...)
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immigrants may invest in any of the Regional Centers that currently exist to qualify for their
conditional LPR status.30
The Basic Pilot Program Extension and Expansion Act of 200331 scheduled the program to sunset
in FY2008. However, the program was extended through March 6, 2009, by a continuing
resolution.32 Following the 2003 legislation, USCIS decided to develop a new unit to govern
matters concerning LPR investor visas and investments.33 On January 19, 2005, the Investor and
Regional Center Unit (IRCU) was created by the USCIS, thereby establishing a nationwide and
coordinated program. USCIS believes that the IRCU will serve the dual purpose of guarding
against EB-5 abuse and encouraging investment.34
The USCIS approximates that between 75-80% of EB-5 immigrant investors have come through
the pilot program since it began, and that limited partnerships constitute the most significant
portion of this group.35
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In contrast to the high number of applications for other employment-based LPR visas,36 the full
allotment of almost 10,000 LPR investor visas per fiscal year has never been used. As Table 1
below shows, the number of LPR investor admissions peaked in FY1997, with 1,361 admissions,
or 13.6% of the program’s visa supply. In subsequent years, the program declined markedly,
before increasing up to 806 in FY2007. Despite the low numbers of overall investor admissions,
the program has seen a marked increase since the implementation of the Immigrant Investor Pilot
Program expansion in 2004.
From FY1992 to FY2004, the cumulative total amount invested into the United States by LPR
investor visa holders was approximately $1 billion and the cumulative number of LPR investor
visas issued was 6,024.37 Since FY2004, an additional 1,901 immigrant investor visas have been

(...continued)
• have a positive impact on the regional or national economy through increased household earnings
(8 CFR 204.6(m)(3)(iii)); and
• generate a greater demand for business services, utilities maintenance and repair, and construction
jobs both in and around the center (8 CFR 204.6(m)(3)(iv)).
29 These 5,000 visas represent a subset of the approximately 10,000 visas allocated for the LPR investor visa.
30 USCIS does not publish an official list of the number of EB-5 Regional Centers that exist. However, in November
2007, USCIS released to the American Immigration Lawyers Association a list of regional centers that were “active” as
of October 2007. This list included 20 active centers. The list is available at http://vkvisalaw.wordpress.com/2007/11/
12/updated-list-of-eb-5-investor-visa-regional-centers-as-of-oct-2007/.
31 P.L. 108-156.
32 P.L. 110-329, §144.
33 USCIS, EB-5 Immigrant Investor Pilot Program, Background, June, 2004.
34 Ibid.
35 Based on CRS discussions with Morrie Berez, Chief Adjudications Officer, USCIS Investor and Regional Center
Program, November 20, 2006.
36 According to the Department of State (DOS) Visa Bulletin (No. 111, Vol. VIII) there are backlogs only for all
employment-based immigrants in the third preference categories, and for nationals of India and China in the second
preference category. All other categories have numbers available for qualified applicants.
37 U.S. Government Accountability Office, Immigrant Investors: Small Number of Participants Attributed to Pending
(continued...)
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issued. In the earlier years of the program, it attracted a relatively higher rate of derivatives than
principals.38 However, in the last three years the distribution of visas between principals and
derivatives has more closely approximated parity. Derivatives have historically accounted for
approximately 66% of immigrant investor visa recipients, while principals account for 34%.
Table 1. United States LPR Investor Visa Admissions,
FY1996-FY2007
EB-5 Visa
Fiscal Year
Principals Derivatives
Admissions
1992 59
24 35
1993 583 196 387
1994 444 157 287
1995 540 174 366
1996 936 295 641
1997 1361 444 917
1998 824 259 565
1999 285 99 187
2000 218 79 147
2001 191 67 126
2002 142 52 97
2003 64
39 25
2004 129 60 69
2005 346 158 188
2006 749 252 497
2007 806 279a 515b
Source: CRS presentation of U.S. Department of Homeland Security Office of Immigration Statistics FY2007
data.
Note: In FY2006, of the total admissions, 491 were new arrivals and 315 were adjustments of status. The new
arrivals included 163 principals and 328 dependents, while the adjustments of status included at least 116
principals and 187 dependents.
a. DHS withheld the information on some individuals to limit disclosure. Thus, the total admissions does not
reflect the sum of principals and derivatives for FY2007.
b. Ibid.
According to data from DHS’ Performance Analysis System, in the time span of FY1992 through
May 2006, authorities had received a cumulative total of 8,505 petitions for immigrant investor
visas. Of these petitions, 4,484 petitions had been granted while 3,820 had been denied39—an

(...continued)
Regulations and Other Factors, GAO-05-256, April 2005, pp. 8-11.
38 Principals are the actual investors. Derivatives are comprised of spouses, children, and other dependents.
39 The discrepancy between the petitions granted, denied, and received is due to some petitions remaining
(continued...)
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approval rate of 52.7%. Furthermore, in this same time span, officials received 3,235 petitions for
the removal of conditional status40 from the LPRs of immigrant investors. These petitions were
granted in 2,155 cases (a 66.6% approval rate), while the remaining 910 petitions for the removal
of conditional status were denied.
Although numerous possible explanations for the overall low admission levels of LPR investor
visas exist, the notable drop in admissions in FY1998 and FY1999 is due in part to the altered
interpretations by the former-INS of the qualifying requirements that took place in 1998.41 The
21st Century Department of Justice Appropriations Act (2002)42 provided remedies for those
affected by the former-INS’ 1998 decision, and provided some clarification to the requirements to
promote an increase in petitions.43
A 2005 report from GAO44 listed a number of contributing factors to the low participation rates,
including the rigorous nature of the LPR investor application process and qualifying
requirements; the lack of expertise among adjudicators; uncertainty regarding adjudication
outcomes; negative media attention on the LPR investor program; lack of clear statutory
guidance; and the lack of timely application processing and adjudication. It is unknown how
many potential investors opted to obtain a nonimmigrant investor visa or pursued other
investment pathways. A recent law journal article on investor visas suggested that the two year
conditional status of the visa and the alternate (and less expensive) pathways for LPR status often
dissuaded potential investors from pursuing LPR investor visas.45 Yet, since FY2003, the number
of immigrant investor visas issued has increased on an annual basis.
According to the GAO study, of the LPR visas issued to investors, 65346 had qualified for
removal of the conditional status of LPR visa (not including dependents).47 GAO estimates that
these LPR investors invested approximately $1 billion cumulatively into their collective
enterprises and 99% kept their enterprise in the same state where it was established.48 The types
of enterprises these investors established were often hotels/motels, manufacturing, real estate, or
domestic sales, with these four categories accounting for 61% of the businesses established by
LPR-qualified investors. Furthermore, an estimated 41% of the businesses by LPR-qualified
investors were set up in California. The subsequent states with the highest percentages of

(...continued)
unadjudicated.
40 “Conditional status” for an LPR immigrant means that the final approval of the LPR is contingent upon fulfilling
certain requirements. For immigrant investors, the conditional status lasts for two years before the applicant is reviewed
for final approval.
41 The West Group, Sections 203(b)(5) and 216A of the Immigration and Nationality Act, 75 Interpreter Releases 332,
March 9, 1998.
42 P.L. 107-273.
43 3 Charles Gordon, Stanley Mailman, and Stephen Yale-Loehr, Immigration Law and Procedure, § 39.07 (Matthew
Bender, Rev. Ed.)
44 U.S. Government Accountability Office, Immigrant Investors: Small Number of Participants Attributed to Pending
Regulations and Other Factors, GAO-05-256, April 2005, pp. 8-11.
45 Mailman, Stanley, and Stephen Yale-Loehr. “Immigrant Investor Green Cards: Rise of the Phoenix?” New York Law
Journal, April 25, 2005. At http://www.millermayer.com/EB5NYLJ0405.html, visited January 23, 2007.
46 Of these investors, 247 (or 38%) applied for U.S. citizenship.
47 The fact that they qualified for LPR status means that they had successfully maintained their business and 10 full-
time qualifying employees for more than two years.
48 GAO’s report stated it could not provide reliable figures on the number of jobs created by these enterprises.
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established enterprises were Maryland, Arizona, Florida and Virginia with 11%, 8%, 7%, and 7%
respectively (for examples of current investment projects see Appendix B).
As Figure 1 shows, persons obtaining LPR investor visas to the United States between FY1998
and FY2007 has fluctuated in number. While 824 persons obtained such LPRs in FY1998, the
total for FY2003 was 64. From FY2003 through FY2007, the total number grew by 1,256% to a
total of 806. Thus, despite a notable recent upward trend in growth, the issuance of LPR investor
visas has not yet recovered to the levels of the mid-to-late 1990s. Additionally, during the time
period depicted in Figure 1, 44.2% of the 3,754 visas issued were for individuals adjusting status.
The remaining 55.8% were issued to new arrivals. The majority of these new arrivals occurred in
FY1998, FY2006, and FY2007.
Figure 1. LPR Investor Visas Issued by Type, FY1998-FY2007
900
Adjustment of Status
New Arrivals
800
700
isa
V
R 600
P
491
571
ing L 500
469
in
a
400
Obt
s
dual 300
8
vi
di
15
In
120
200
72
3
63
315
25
280
100
5
51
60
16
188
146
128
91
39
69
25
0
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
Fiscal Year

Source: CRS presentation of data from the DHS Yearbook of Immigration Statistics 2007.
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When coming to the United States as a temporary investor, there are two classes of nonimmigrant
visas which a foreign national can use to enter: the E-1 for treaty traders and the E-2 for treaty
investors. An E-1 treaty trader visa allows a foreign national to enter the United States for the
purpose of conducting “substantial trade” between the United States and the country of which the
person is a citizen.49 An E-2 treaty investor can be any person who comes to the United States to

49 §101(a)(15)(E)(i) of the Immigration and Nationality Act (INA).
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develop and direct the operations of an enterprise in which he or she has invested, or is in the
process of investing, a “substantial amount of capital.”50 Both these E-class visas require that a
treaty exist between the United States and the principal foreign national’s country of citizenship.51
In the majority of cases, a commerce or navigation treaty serves as the basis for the E-class visa
extension (though other bilateral treaties and diplomatic agreements can also serve as a
foundation).52 A number of countries offer both the E-1 and E-2 visas as a result of reciprocal
agreements made with the United States, although many countries only offer one. Currently there
are 75 countries who offer the treaty class visas. Of these countries, 28 offer only the E-2 treaty
investor visa while 4 countries offer only the E-1 treaty trader visa (see Appendix A). In the cases
where a country offers both types of visas, an applicant who qualifies for both types of visa may
choose based upon his or her own preference. Such decisions, however, would depend upon the
specific nature of the business as the E category visas carry different qualifying criteria for
renewal.
Although each category has some unique requirements, other requirements cut across all
categories of nonimmigrant investor visas. An applicant for any of the nonimmigrant investor
categories must satisfy the following criteria:
• the principal visa recipient must be a national of a country with which the United
States has a treaty.53
• the principal visa recipient must be in some form of executive or supervisory role
in order to qualify as a treaty trader or investor54
• the skills the principal visa recipient possesses must be essential and unique to
the enterprise under consideration55
• the visa holder must show an intent to depart the United States at the end of the
visa’s duration of status56
• if investing in an existing enterprise, the applicant must show that the employer
of the treaty trader or investor must be at least 50% owned by nationals of the
treaty country.57

50 INA §101(a)(15)(E)(ii).
51 8 CFR §214.2(e)(6).
52 2 Charles Gordon, Stanley Mailman, and Stephen Yale-Loehr, Immigration Law and Procedure, § 17.06[2][a]
(Matthew Bender, Rev. Ed.).
53 Spouses and child dependents are not subject to the same nationality requirements as they can be nationals of any
country, regardless of whether that country has treaties with the United States or not.
54 There is no set formula for determining whether a person’s role is sufficient to qualify, but is determined on a case by
case basis using a number of different factors. These factors normally include such considerations as salary, position,
duties, degree of control, and the number of employees under the applicant’s supervision.
55 A nominal position (e.g. having the title of manager) or title is not sufficient grounds to qualify for an E-class visa.
Individuals with highly specialized skills or knowledge pertinent to the employer’s business may also qualify, although
if the individual’s skills are determined to be of only a specialized nature that person must qualify for an H-1B visa (for
highly skilled professionals). An example of a skill that has been rejected by DOS as an essential skill is knowledge of
a foreign language.
56 8 CFR §214.2(e)(2)(iii).
57 This criterion is more salient in the cases of smaller companies since ownership is more constant and concentrated.
Large publically traded companies are largely not saddled with having to demonstrate ownership by nationals.
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A person granted an E-class visa is eligible to stay in the United States for a period of two years.58
Although an applicant is obligated to show intent of departing the United States at the end of the
visa duration, the E-class visas may be renewed for an indefinite number of two year periods
provided that the individual still qualifies.59 Spouses and child dependents are granted the same
visa status and renewal as the principal visa holder so long as the child is under the age of 21,
after which the child must apply and qualify for his or her own visa.60
Generally with the E-class visas, the individual may not engage in other employment than that
which is stipulated,61 although incidental activities are generally allowed.62 If any E-class
individual wishes to change employer, he or she is under obligation to contact the Department of
State (DOS) and apply for adjustment of status.63
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The E-1 formally traces back to the 1924 Immigration Act, although merchants working under
treaty terms were recognized visa holders prior to this act.65 Under current law, the E-1 visa is to
be issued to an individual who engages in substantial trade between the United States and his or
her country of nationality. According to immigration regulations, trade is defined as “the
exchange, purchase or sale of goods and/or services. Goods are tangible commodities or
merchandise having intrinsic value. Services are economic activities whose outputs are other than
tangible goods.”66 This expanded definition of trade into the service sector allows for a fairly
broad understanding of what trade may entail.
The term “substantial trade” has never been explicitly defined in terms of monetary value. Rather,
the term is meant to indicate that there is an amount of trade necessary to ensure a continuing
flow of international trade items.67 For smaller businesses, regulatory qualification for treaty
trader status may be derived from demonstrating that the trading activities would generate an
income sufficient to support the trader and his or her family.68 The qualifications for sufficient
volume or transaction have not been explicitly set in the regulations,69 but a minimum

58 8 CFR §214.2(e)(19).
59 8 CFR §214.2(e)(20).
60 8 CFR §214.2(e)(4).
61 8 CFR §214.2(e)(8).
62 The rules on such incidental activities are quite flexible. The governing principle of such incidental activities is that
the primary trade or investment activity remains paramount (see 9 FAM §41.40 n7 (Visa TL-872 February 20, 1975,
i.e. prior to 1987 revision) and 9 FAM §41.11 n.3.1).
63 8 CFR §214.2(e)(8).
64 Although technically being a “trader” category as opposed to an “investor” category, there is sufficient grounds for
believing that the E-1 traders should be included with the other investor categories. Although their activities must be
related to trade, they are still allowed to make investments in United States enterprises. Also, investor categories such
as the LPR investor visa have previously held requirements that investments must positively effect export levels in the
industry where an investment is occurring (USCIS, EB-5 Immigrant Investor Pilot Program, Background, June, 2004).
65 The term “treaty merchant,” for example, traces its roots at least back to the 1880 treaty with China to conduct trade
(Treaty Between the United States and China, Concerning Immigration, November 17, 1880, art. I, 22 Stat. 826).
66 8 CFR §214.2(e)(2), as amended by 56 Fed. Reg. 10978, 10979 (1989).
67 8 CFR §214.2(e)(10).
68 Ibid.
69 Ibid.
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qualification is that more than 50% of the business’s trade must flow between the United States
and the treaty country from which the E-1 visa holder stems.70
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The E-2 investor visa is a visa category that stems from the 1952 Immigration and Nationality Act
(INA). The qualifying applicant for such a visa is coming to the United States in order to
“develop or direct the operations of an enterprise in which he has invested, or is in the process of
investing a substantial amount of capital.”71 Unlike the E-1 visa, the business need not be engaged
in trade of any kind. However, the same rules concerning ownership are still applicable.72 In cases
of ownership of an enterprise, the regulations require that the E-2 visa holder control at least a
50% interest in an enterprise.73 The burden of proof for E-2 qualification lies with the applicant in
the same manner as with the other E-class visas.74
There is no explicit monetary amount for what constitutes a “significant amount of capital.” The
DOS has operated under a regulatory proportionality principle that dictates that the amount an
individual invests must be enough to ensure the successful establishment and growth of an
enterprise, and there must be some level of investment risk assumed by the treaty investor.75
Because of this proportionality regulation, an investment in a small to medium-sized enterprise is
acceptable.76 For smaller sized investments, the DOS generally requires that the investment
amount be a higher percentage of the enterprise value.77 For higher valued enterprises the
investment percentage becomes less relevant, provided that the monetary amount is deemed
substantial.78
As further grounds for regulatory qualification for an E-2 investor visa, investments in marginal
enterprises are not eligible for acceptance.79 Consequently, the DOS applies a two-pronged test
for marginality.80 On the one hand, the enterprise in which the applicant seeks to make an
investment must be capable of providing more than a minimal living for the investor and his or
her family. However, the rules are capable of recognizing that some businesses need time to
establish themselves and become viable. Consequently, as a second prong of the test, the
investor’s enterprise must be deemed capable of making a significant economic impact within
five years of starting normal business activity. If neither of these prongs is successfully passed,
the enterprise is deemed marginal and the application is rejected.81

70 8 CFR §214.2(e)(11).
71 INA §101(a)(15)(E)(ii).
72 8 CFR §214.2(e)(3)(ii).
73 Certain joint ventures have been deemed permissible by the United States, provided that each joint venture partner
have veto power over decisions by the other partner.
74 8 CFR §214.2(e)(12).
75 8 CFR §214.2(e)(14).
76 9 FAM §41.51 n.10.4, as amended, TL:VISA-322 (October 10, 2001).
77 Visa Bulletin, Vol. V, No. 20—Nonimmigrant Treaty Investors U.S. Department of State, Visa Office (1982).
78 Ibid.
79 8 CFR §214.2(e)(15).
80 2 Charles Gordon, Stanley Mailman, and Stephen Yale-Loehr, Immigration Law and Procedure, § 17.06[3][c]
(Matthew Bender, Rev. Ed.).
81 Ibid.
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An additional category of E-class nonimmigrant visa—the E-3 visa for Australian nationals—
does exist, but it is set aside for use by specialized workers, and not for investors or traders.82
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E-class visas are largely distributed to foreign nationals from the regions of Asia and Europe. This
result is not surprising since the majority of treaty countries are in these two regions.
Furthermore, one could reasonably expect that the financial requirements embedded in
nonimmigrant investor visa categories would result in a high correlation between the nationality
of qualifying applicants and country membership in the Organization for Economic Cooperation
and Development (OECD)—an organization of capital abundant countries.
As Figure 2 shows, the Asian region was issued the highest number of E-class visas in FY2008,
with a total of 17,320 visas issued. These Asian issuances constitute more than any other region,
and represent 46.6% of the worldwide total. Within the Asian region, the biggest user of the E-
class visa is Japan, whose nationals accounted for 11,288 of the visa issuances in FY2008, a
figure representing 30.4% of the 37,132 worldwide E-class visas issued that fiscal year. Europe’s
12,971 E-Class visas accounted for 34.9% of the worldwide total, while the North American
share of 3,948 visas represented 10.6%. Oceania’s issuance accounted for 1,951 visas, or 5.3% of
the total.83 South America and Africa each accounted for less than 2.4% of the worldwide total,
and combined their nationals represented approximately 2.6% of the worldwide E-class visa
issuances for FY2008.

82 A special category of nonimmigrants classified as the E-3 visa has been established and is only available to nationals
of Australia. Although agreed upon under the Australian Free Trade Agreement, the agreement itself contained no
explicit immigration provision. Rather, the FY2005 supplemental appropriations for military operations in Iraq and
Afghanistan (P.L. 109-16) included §501 creating the E-3 visa category. This visa permits the employment by any
United States employer of a qualifying Australian national for a specialty occupation. Unlike the other E-class visas,
the E-3 carries an annual cap which is currently set at 10,500. However, the other rules generally remain the same as E-
1 and E-2 visas, with admissions for two years and unlimited extensions for qualifying individuals.
The E-3 resembles the H-1B-1 visa which allows for similar admissions of specialized workers from Chile and
Singapore. After legislation was passed implementing the Chile and Singapore Free Trade Agreements (P.L. 108-77
and P.L. 108-78, respectively), these new laws carved out a portion of §101(a)(15)(H) of the INA for professional
workers entering through the free trade agreements. Unlike the other H-1B requirements, H-1B-1 recipients are only
required to be specialized workers as opposed to highly specialized. This visa category also differs from the E-3 visa in
that it allows for an 18 month admission and carries an annual cap of 1,400 for Chilean nationals and 5,400 for
nationals of Singapore. For further discussion on the E-3 and H-1B-1 visas, see CRS Report RL30498, Immigration:
Legislative Issues on Nonimmigrant Professional Specialty (H-1B) Workers, by Ruth Ellen Wasem, and CRS Report
RL32982, Immigration Issues in Trade Agreements, by Ruth Ellen Wasem.
83 The figure does not include 2,961 visas issued to E-3 applicants under the Australian Free Trade Agreement in
FY2008.
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Figure 2. E Treaty Trader and Investor Visas Issued by Region, FY2008
20,000
18,000
17,320
16,000
14,000
12,971
12,000
ed
ssu
I 10,000
sas
Vi
8,000
6,000
3,948
4,000
1,951
2,000
870
72
0
Africa
Asia
Europe
North America
Oceania
South America
Region of Origin

Source: Data are from the Department of State, Bureau of Consular Affairs, Report of the Visa Office, 2008.
Notes: The figure does not include the one visa issued to an individual with no registered nationality. E-3 visas
issued are not included in the figure.
The admissions data on nonimmigrant investors offers more detailed insights into the origins of
the visa holders. Table 2 provides cumulative totals of E-class visa admissions into the United
States in FY2007 by region of origin, with a detailed breakdown of the Asian region. The figures
listed in Table 2 show that the Asian region accounted for approximately 49.0% of the
nonimmigrant investor visa admissions into the United States. In FY2007, Japan accounted for
the majority of nonimmigrant investor admissions with 85,908 admissions.84 South Korea’s
14,837 nonimmigrant investors admitted account for 6.5% of the United States total for FY2007.
It is worth noting that the fast growing markets of China and India (the world’s two largest
population centers) combined for slightly less than 1,000 admissions. The second largest region
of origin for nonimmigrant investor admissions was Europe, with slightly fewer investors
admitted than Japan. And while Europe’s 85,824 admissions accounted for 37.4% of the total
U.S. nonimmigrant investor admissions in FY2007, the 233 admissions of nationals from African
countries accounted for approximately one-tenth of 1% of this same total.

84 Admissions figures differ significantly from visa issuance figures because individuals may leave the United States
and return on the same visa, as long as the visa is still valid. Thus, some individuals may be counted multiple times in
the admissions data.
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Table 2. Nonimmigrant Treaty Trader and
Investor Admissions, FY2007
Country (or Region) of Origin
Number
Percentage of Total
Asia:
Taiwan 3,528
1.5
South Korea
14,837
6.5
Chinaa 617
0.3
Japan 85,908
37.4
India 315
0.1
All other Asia
7,408
3.2
Total for Asia
112,613
49.0
All Other Regions:
Europe 85,824
37.4
South America
6,106
2.7
Africa 233
0.1
North America
21,479
9.4
Oceania 12,283
1.3
Unknown 398
0.2
Total 229,642
100.0
Source: CRS presentation of data from the DHS Yearbook of Immigration Statistics 2007.
Notes: The data not include the 9,294 admission of free trade workers with E-3 visas from Australia.
a. Denotes People’s Republic of China, Hong Kong, and Macau.
The Department of Homeland Security (DHS) offers statistics on the admissions of
nonimmigrants and their destination state. Table 3 indicates the destination states of
nonimmigrant treaty trader and investor visa admissions into the United States for FY2007. The
state with the highest number of nonimmigrant investors as their destination in FY2007 was
California with 45,777 admissions, accounting for 19.9% of the admissions total. Following
California, the next three biggest recipients of nonimmigrant investors were New York, Florida,
and Texas with 26,812, 25,222, and 21,781 admissions each, respectively. In the respective order,
these state admissions accounted for 11.7%, 11.0% and 9.5% of the admissions total in FY2007.
The only other states with a combined total of more than 10,000 nonimmigrant treaty trader and
investor visa admissions were Michigan and New Jersey. Michigan was the destination state of
12,604 nonimmigrant investors admitted, while New Jersey attracted 11,517 admissions. These
totals accounted for 5.5% and 5.0% of the United States admissions total, respectively. The
remaining states represented the destination states for approximately 37.4% of nonimmigrant
traders and investors.
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Table 3. E Treaty Traders and Investors Admitted by State of Destination, FY2007
State Admissions
State
Admissions
State
Admissions
State
Admissions
Alabama
2,898 Indiana
3,389 Nevada
1,235 Tennessee
3,084
Alaska
425 Iowa
206 New
Hampshire
222 Texas
21,781
Arizona
2,551 Kansas
469 New
Jersey
11,517 Utah
286
Arkansas
792 Kentucky
3,482 New
Mexico
290 Vermont
135
California
45,777 Louisiana
817 New
York
26,812 Virginia
2,666
Colorado
1,145 Maine
166 North
Carolina
3,770 Washington
3,964
Connecticut
2,740 Maryland
1,480 North
Dakota
29 West
Virginia
341
Delaware
212 Massachusetts
2,922 Ohio
7,160 Wisconsin
687
District of Columbia
520
Michigan
12,604
Oklahoma
341
Wyoming
64
Florida
25,222 Minnesota
720 Oregon
1,580 Other
2,538
Georgia
7,108 Mississippi
252 Pennsylvania
3,166 Unknown
4,392
Hawaii
2,385 Missouri
619 Rhode
Island
261

Idaho
157 Montana
80 South
Carolina
4,980

Illinois 8,924
Nebraska
194
South
Dakota
80
Total 229,642
Source: CRS presentation of data from the DHS Yearbook of Immigration Statistics 2007.
Notes: The data not include the 9,294 admission of free trade workers with E-3 visas from Australia.
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Historically, more investors have applied to enter the United States as nonimmigrants than
immigrants, possibly because the less stringent requirements for the nonimmigrant investor visa
make it easier to obtain. However, relative to other nonimmigrant categories, the admission levels
of investor nonimmigrants are low. With the ease of movement, technological advances, and ease
of trade restrictions, many investors may be choosing to invest in the United States from abroad
and enter the United States on B-1 temporary business visas or visa waivers.85
ǯǯȱȱȱȱ
Although there are many countries with investor visa programs—including the United Kingdom,
Australia, and New Zealand—the Canadian investor program has the strongest parallels to those
of the United States. These parallels are in part due to the fact that the U.S. immigrant investor
program was modeled after its Canadian counterpart. The Canadian program allows investors
who have a net worth of at least $800,000 (Cdn) to make a $400,000 (Cdn) investment through
Citizenship and Immigration Canada (CIC).86 The Canadian government additionally offers an
entrepreneurial visa for foreign nationals with a net worth of $300,000 (Cdn).87 These nationals
are required to invest and participate in the management of a certain sized business, and they
must produce at least one new full-time job for a non-family member.88 Between 1986 and 2002,
the Canadian investor visa program attracted more than $6.6 billion (Cdn) in investments.89 From
FY1992 through FY2004, United States LPR investor immigrants had invested an estimated $1
billion in U.S. businesses.90
According to published accounts, the Canadian investor visa was developed initially to attract
investors from the British colony of Hong Kong.91 The visa was created in 1986 in response to
the significant numbers of investors seeking to migrate from Hong Kong in anticipation of the
transfer of the colony from British to Chinese control. For these investors, the visa offered an
opportunity to establish legal permanent residence in a country that was perceived to be more
embracing of individual property rights and open markets.92 These immigrant investors from
Hong Kong, along with other immigrant investors, have cumulatively invested over $3 billion in
the Canadian economy.93

85 According to the DHS Office of Immigration Statistics’ 2005 Yearbook of Immigration Statistics, in FY2005 there
were 2,432,587 admissions of B-1 visa holders and 2,261,354 admissions for business purposes on visa waivers.
86 Citizenship and Immigration Canada, “Business Immigrant Links: FAQs,” March 31, 2007, at http://www.cic.gc.ca/
english/information/faq/immigrate/business/index.asp.
87 Ibid.
88 Ibid.
89 Mailman, Stanley, and Stephen Yale-Loehr. “Immigrant Investor Green Cards: Rise of the Phoenix?” New York Law
Journal, April 25, 2005. At http://www.millermayer.com/EB5NYLJ0405.html.
90 U.S. Government Accountability Office, Immigrant Investors: Small Number of Participants Attributed to Pending
Regulations and Other Factors, GAO-05-256, April 2005, pp. 8-11.
91 Denton, Herbert H. “Canada Lures Hong Kong Immigrants: Well-Off Businessmen Willing to Invest Are Granted
Special Status.” Washington Post, March 8, 1986, pp. A11, A18.
92 Ibid.
93 Citizenship and Immigration Canada, “Business Immigrant Links: FAQs,” March 31, 2007, at http://www.cic.gc.ca/
english/information/faq/immigrate/business/index.asp.
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As Figure 3 demonstrates, the annual number of immigrant investor visas issued over the past
decade has remained multiple times higher than that of its United States counterpart. The margin
between these two programs was closest in 1997, when the Canadian issuance of 5,595 immigrant
investor visas was approximately 400% higher than the U.S. total of 1,361 immigrant investor
visas issued. Although these ratios have fluctuated, the sizable Canadian advantage in this
measure has remained. In terms of the absolute levels, the Canadian immigrant visa level for
2005 represented a 10-year high, while the U.S. level for the same time period represented
approximately 25% of its 10-year high. Both countries have shown an upward trend in immigrant
investor visas in the last two years.
Figure 3. Immigrant Investors to Canada and the United States, 1996-2005
12,000
Canada
United States
10,000
ts
n 8,000
migra
6,000
gory Im
,607
9
tor Cate 4,000
6
5
Inves
1
,099
6,17
4
5
6,339
6
5,59
5
1
6
6
5
2,000
4,9
4,53
4,2
4,635
1,3
3,69
936
824
8
1
2
9
285
21
19
346
14
64
12
0
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
Year

Source: Data are from the United States Government Accountability Office (2005) and Citizenship and
Immigration Canada (2005).
What is unclear from the data is whether the competition between the U.S. and Canadian program
(as well as investor programs in other countries) constitutes a zero-sum game. There are no data
available showing the motive for migration among investors, or if they perceive the United States
and Canada as interchangeable investment locations. If the investors are motivated purely by the
economic returns, then economic theory94 suggests that equalizing the program financial
requirements should result in more equal rates of petitions. Furthermore, a lowering of the
financial requirements should increase the supply for both countries. However, if the immigrant
investors are motivated to migrate by non-financial considerations, then equalizing the United

94 Xenogiani, Theodora. “Migration Policy and Its Interactions with Aid, Trade and Foreign Direct Investment Policies:
A Background Paper.” OECD Development Centre, Working Paper No. 249, June, 2006.
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States program requirements with its Canadian counterpart is likely to have little impact on the
current trends.
¢ȱȱȱȱ ȱȱ
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Classical economic theory has posited that trade liberalization (including the reduction of
investment restrictions) establishes a conditional inverse theoretical relationship between foreign
direct investment (FDI) and migration.95 In other words, as trade increases, migration pressures
decrease. The theory posits that an increased level of FDI should reduce migratory pressures
through growth in the targeted economy. As economic growth produces a higher demand for
labor, workers in that economy feel less pressure to seek employment in foreign economies,
provided that the new jobs complement the workforce’s skills. For example, if economic growth
creates demand for skilled labor, then an unskilled labor force should not experience any reduced
migration pressures. Thus, while FDI increases host-country growth, there is not necessarily a
direct reduction in host-country migration pressures.
The investor visas offered by the United States operate on the principal that FDI into the United
States should spur economic growth in the United States. According to the classical theory, if
these investments are properly targeted towards the U.S. labor force’s skill sets, it should reduce
the migration pressures on U.S. workers. Such economic growth from FDI should further spur
greater demand for trade. In FDI between capital abundant countries such as the OECD member
states (between whom a marked majority of FDI flows), the empirical evidence has largely
supported this notion.96 Furthermore, it has provided an increased per capita income in these
states, as well as boosted the general standard of living.
What is less clear from the empirical research is the degree to which potential migration provides
any additional incentive for investment activity in the United States. The classical trade theory
asserts that trade and migration are substitutes,97 and that trade liberalization should reduce
migratory pressures.98 These basic propositions are generally agreed to hold in the long term.
Consequently, in the long term classical trade theory suggests there should be little migration of
investors from countries with liberalized trade arrangements with the United States.99 Instead,
these investors would achieve their investments through conventional FDI. Furthermore, the
theory suggests that investors would be more likely to migrate from countries with restrictive
trade policies (a policy more highly correlated with less economically developed countries).

95 For a brief discussion, see Xenogiani, Theodora. “Migration Policy and Its Interactions with Aid, Trade and Foreign
Direct Investment Policies: A Background Paper.” OECD Development Centre, Working Paper No. 249, June, 2006,
p.36.
96 Ibid.
97 For further discussion on immigration and trade, see CRS Report RL32982, Immigration Issues in Trade
Agreements, by Ruth Ellen Wasem.
98 This migratory pressure reduction should occur through the increased exports of unskilled labor-intensive goods, as
well as the resulting fact-price equalization and subsequent convergence of wages.
99 There exists the possibility that foreign investment and capital trade objectives of many investors are accomplished
through multinational corporations. Under the construct of a multinational corporation, returns to the investor are
achieved through the foreign direct investment by the corporation and through the migration of managers and technical
experts to facilitate production efficiency.
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Critics of the classical economic models contend that despite elegant predictions, the models
produced by the theory frequently do not capture the costs of international finance. Such critics
argue that foreign investments often occur at the expense of local businesses, and result in
exploitive practices of local labor.100 These criticisms are particularly common when critiquing
the economic relationship between capital abundant countries and less economically developed
countries (LEDC). According to the argument, more powerful countries can leverage their power
to construct investment relationships that shift a disproportionate amount of profits to the capital
abundant countries. Simultaneously, a greater share of the costs101 are shouldered by the less
powerful country. Classical economists generally respond by noting that these investments are
still producing growth in the LEDCs, making the countries better off than without the
investments. However, LEDCs remain a source of contention between the classical economic
theorists and their critics.
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Some scholars have expressed doubt about the posited trade/migration substitutability, suggesting
that the relationship in the short or medium term could look different from the long term.102 One
of the arguments put forward is that trade and migration are complementary for countries with
different levels of development.103 Under such a scenario, economic growth in a sending country
would provide potential migrants with the economic means to overcome relatively high migration
costs. Other observers point to such factors as imperfect credit markets and currency fluctuations
as significant “push” factors for potential migrants.104 These latter factors, however, are generally
more highly correlated with LEDCs. Therefore, both the complementary and substitutability
theories of trade and migration suggest that higher demand for investor out-migration should
currently lie in the populations of LEDCs. However, as noted earlier, investor visas issued to
regions with LEDCs are relatively few.
What makes the visa program distinct from conventional FDI is that it involves trade through the
import of human capital. Consequently, these visas have potential for creating a so-called “brain
drain” migration out of less-developed sending-countries.105 LEDCs are by definition limited in
their capital levels, and economic theory would suggest that exporting capital from a capital
scarce country would inhibit its growth and development.106 Classical theorists would argue that
the United States would be better served by sending FDI into LEDCs, thereby promoting
economic growth in LEDCs and a subsequent higher demand for U.S. goods.107 Such investment,

100 For example, see Banerjee, Subhabrata Bobby, and Stephen Linstead, “Globalization, Multiculturalism and Other
Fictions: Colonialism for the New Millennium?” Organization, vol. 8, no. 4 (2001), pp. 683-722.
101 These costs may include tax shelters, government sponsored benefits, subsidies, and the like.
102 Schiff, M. “How Trade, Aid, and Remittances Affect International Migration.” World Bank Policy Research
Working Paper No. 1376, Washington, DC, 1994.
103 Xenogiani, Theodora. “Migration Policy and Its Interactions with Aid, Trade and Foreign Direct Investment
Policies: A Background Paper.” OECD Development Centre, Working Paper No. 249, June, 2006, p. 31-33.
104 Ibid.
105
A large majority of the issued visas have been to foreign nationals from relatively capital abundant countries.
106 For further discussion of FDI into the United States, see CRS Report RS21857, Foreign Direct Investment in the
United States: An Economic Analysis, by James K. Jackson.
107 FDI does entail some degrees of risk and reward for both the home and host economies. For the home economy,
FDI can improve competitiveness and performance of firms by providing value-added activities, better employment
(continued...)
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the theory dictates, would promote job growth both in the United States and abroad.108 Instead,
targeting investors from capital abundant countries for sector specific investments would serve a
more complementary role for the global market.109 By attracting capital abundant country
investors, the United States’ economic growth and productivity could be stimulated without
adversely affecting the consumption and trade potential of the investor’s country of origin.
¢ȱȱȱȱ
Some recent scholarly work has drawn a distinction between the decision-making factors of
potential temporary and permanent migrants.110 Amongst temporary migrants, it is the
employment prospects and wage differentials that are significant variables in deciding whether to
migrate. Differences in both gains and price levels should affect the cost/benefit calculation of the
potential migrants, as these variables will affect potential levels of consumption and savings. For
permanent migrants, however, the prospects for professional and social mobility are the main
motivating factors.
The distribution of visas among Asian countries shows marked country-specific tendencies
among investor visa petitioners. Specifically, the polarization among petitioners towards either
immigrant (permanent) or nonimmigrant (temporary) visas suggests that a significant proportion
of applicants are substituting immigrant visas for nonimmigrant visas, or vice versa. For example,
while Japan accounted for 37.4% of all the foreign nationals arriving on nonimmigrant treaty
trader and investor visas in FY2007 (Table 2), its nationals represented only 1% of all the LPR
investor visas issued since FY1992. Conversely, nationals of Taiwan accounted for roughly 40%
of immigrant investors issued since FY1992, but only 1.5% of nonimmigrant arrivals in FY2007.
In the context of the aforementioned theory, these opposite behaviors suggest that Japanese
investors are seeking to capitalize on wage differentials, while Taiwanese, Chinese, and (to some
extent) South Korean investors are pursuing professional and social mobility.
Although some considerations weigh more heavily on the decisions of immigrant and
nonimmigrant investors, no single explanation accounts for the behavior of investor visa
petitioners. Japan, for example, has some trade restrictions with the United States through

(...continued)
opportunities, better export performance, and higher national income. At the same time, engaging in FDI also runs the
risks of lower additions to both domestic investment and capital stock, as well as loss of competitiveness and jobs in
certain parts of the economy. For the host economies, the benefits include increases in employment and potential
multiplier effects on other parts of the economy through productivity growth. Accepting FDI, however, does run the
risk that domestic firms are crowded out of the market (United Nations World Investment Report, 2006).
108 From the classical economic perspective, the immigrant investor pilot program is counter-intuitive. In the case of
investors from developed countries there is little incentive for them to settle in the United States since they can achieve
similar standards of living and all of their FDI objectives from their home country. As for LEDCs, a drain of their
capital may provide short-term benefits to the United States, but would inhibit growth and trade in the long run. The
flight of investors from Hong Kong in the late-1980s and the 1990’s was a unique economic situation that has since
subsided. Other than the Hong Kong scenario, there is seemingly little incentive for investors to relocate.
109 The complementary roles would be achieved through what economists refer to as “comparative advantage.”
Theoretically, each country should be able to produce a good or service more efficiently than the world average,
thereby making the good or service exportable. By attracting investments in these comparatively advantaged sectors,
costs should decrease while production increases. Thus, consumers at both ends of a trading relationship are able to
consume more goods.
110 Xenogiani, Theodora. “Migration Policy and Its Interactions with Aid, Trade and Foreign Direct Investment
Policies: A Background Paper.” OECD Development Centre, Working Paper No. 249, June, 2006, p. 31-33.
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voluntary export restraint agreements limiting auto and steel exports to the United States,
suggesting from the theoretical standpoint that Japanese investors would choose to temporarily
migrate.111 The Japanese governments have also complained that the post-9/11 customs
regulations and practices of the United States inhibit U.S./Japanese trade.112 Despite the
suggestion by these factors that Japanese investors are temporarily substituting trade with
migration, it is also plausible that Japan’s weak economic performance has reduced the
professional mobility opportunities—a motivation associated with permanent migration. From
1991-2000, Japan’s real (adjusted for inflation) average GDP growth rate was 1.4%, and it fell to
0.9% from 2001 to 2003.113 Yet, regardless of motivation, Japanese investors are predominantly
choosing to temporarily migrate to the United States.
The fact that China, Taiwan and South Korea have had strong economic performance in the last
decade and relatively higher levels of immigrant investors to the United States, suggests that
these investors are migrating for more than financial purposes. These investors may be more
strongly motivated by the family and/or social network connections to previously migrated
investors and other LPRs in the United States. These theoretically derived motives, however,
must be further tested empirically before any conclusive behavioral statements can be made.
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Classical economic theory holds that investments provide for multiplier effects throughout the
economy by increasing demand for other goods and services. For example, an increase in demand
for corn may increase the demand for storage facilities, which results in an increase in
construction contracts. The U.S. Department of Commerce has quantified these effects through
the Regional Input-Output Modeling System (RIMS II).114 The RIMS II multipliers have become
a significant factor in assessing indirect economic activity and employment effects for Immigrant
Investor Pilot Program petitions.115 Using the regional multipliers for various industries, foreign
investment funds are frequently shown to yield increases in demand across an economy that are
several times higher than the direct input by an investor. Thus, despite the relatively low number
of investors entering the United States, the impact of each investment by a foreign investor is a
multiplied factor greater than the direct investment, depending upon which industry and region is
being invested in. Furthermore, studies showing the direct economic investments of foreign
investors may not fully capture the economic impact of these investors upon a region.116

111 CRS Report RL32649, U.S.-Japan Economic Relations: Significance, Prospects, and Policy Options, by William H.
Cooper.
112 Ibid.
113 Ibid.
114
For an explanation of the RIMS II multiplier, see U.S. Department of Commerce, Regional Multipliers: A User
Handbook for the Regional Input-Output Modeling System (RIMS II), Third Edition, March, 1997.
115 According to the USCIS Chief Adjudications Officer for EB-5 visas, well established input-output models such as
RIMS II are useful in assessing investments for limited partnerships, where the direct effects of an investment are
difficult to demonstrate (based on CRS discussions with Morrie Berez, Chief Adjudications Officer, USCIS Investor
and Regional Center Program, November 20, 2006). Such established economic models are permitted under regulations
(8 CFR 204.6(m)(3)).
116 A recent study commissioned by the National Venture Capital Association found that over the past 15 years,
immigrants have started 15% of venture-backed U.S. public companies. The value of these companies currently
exceeds $500 billion, and most of the companies were in technology-related industries. The study found that these
companies employ 220,000 people in the United States, and 400,000 globally. Some of the more prominent companies
(continued...)
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In recent years, significant efforts have been made by administrative agencies to both promote
investment by foreigners in the United States economy, and to close perceived loopholes for visa
exploitation. At the center of these efforts has been the USCIS’ changes to the Immigrant Investor
Pilot Program, which addressed fraud concerns and the development of a Regional Center unit for
coordination and targeting of foreign investments.
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During the late 1990’s, the LPR investor visa was suffering from high levels of fraudulent
applications.117 There has been concern that potential immigrants could use schemes of pooling
their funds and transferring the money to demonstrate the existence of sufficient capital.118
Furthermore, applicants could potentially use promissory notes that would allow for their
repayment after a six year time period. Since the LPR was only conditional for two years, some
observers feared that these investors could pull out of their respective investments after being
granted their LPR, have the promissory notes forgiven, and the enterprise would collapse. As a
result, the USCIS has engaged in a policy of not accepting promissory notes, although the
regulations state that petitions with promissory notes may be considered for approval.119
Additionally, the creation of the Investor and Regional Center Unit (IRCU) has allowed greater
scrutiny of applications through increased resources and coordination of petitions processing.
Petitioners now must provide extensive documentation that traces the source of their funds to
show that the capital was legally obtained.120

(...continued)
included by the study’s criteria include Google, Yahoo!, eBay, and Intel (Stuart Anderson and Michael Platzer,
American Made: The Impact of Immigrant Entrepreneurs and Professionals on U.S. Competitiveness, National Venture
Capital Association, November 15, 2006, pp. 5-8).
Although the study shows the potential benefits of immigrant entrepreneurs, it does not directly reflect on the investor
visa categories. Most of the immigrants that founded these enterprises came to the United States as children, teenagers,
graduate students, or were hired on H-1B visas in their mid-twenties. Thus, it is unclear to what extent these individuals
would have qualified as either immigrant or nonimmigrant investors under the current regulations. Furthermore, the
study’s findings includes numbers from both companies wholly founded by immigrants and companies founded
through partnerships with United States citizens (Ibid).
117 Some have expressed concern regarding the investor visas being a means for some foreign nationals to channel
illegal funds into the United States. Opponents of the LPR investor visa raised objections during congressional debates
by asserting that the LPR investor category would allow individuals to become United States citizens who had profited
from drug cartels. According to DHS, there does exist documented past abuses in the alien investor program (U.S.
Government Accountability Office, Immigrant Investors: Small Number of Participants Attributed to Pending
Regulations and Other Factors, GAO-05-256, April 2005, pp. 39.). However, since the implementation of the “no
promissory notes” policy, the fraudulent cases have largely disappeared.
118 Based on CRS discussions with Morrie Berez, Chief Adjudications Officer, USCIS Investor and Regional Center
Program, November 20, 2006.
119 Ibid.
120 This practice has made it especially difficult for investors from countries with business practices based on
convention (as opposed to legal documentation) to qualify for investor visas. Documentation requirements may force a
potential investor to trace funds back several decades, effectively disqualifying investors from countries where credible
historical records of income tax documents do not exist (Wolfsdorf, Bernard P., Naveen Rahman-Bhora, Tien-Li Loke
Walsh, and Kim Tran. “A Review of the Immigrant Investor Program.” Immigration Law Today, July/August, 2006,
pp. 27-33).
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Prior to the creation of IRCU, the former-INS had been criticized for becoming more restrictive
in application reviews for Regional Center designation, including allowing some applications to
remain pending for more than three years.121 In 2005, concerns were raised by both Members and
advocates that the IRCU still did not process applications quickly enough,122 and that staff
members had competing obligations within IRCU.123 Proponents of the Immigrant Investor Pilot
Program believe it has attracted a significant amount of capital and that addressing these
criticisms would further increase the levels of foreign investments through the LPR investor
visa.124 USCIS has responded to these criticisms by expanding the number of Regional Centers
available for LPR investor investments.
Working with foreign financing from the immigrant investor program has become highly
attractive for many domestic investors. A number of current investment projects are using LPR
investor financing because it is less costly for the domestic investors. For domestic investors,
employing LPR investor funds becomes a significantly cheaper option than a bank loan, since
there is no requirement to pay interest on the financing. Additionally, because the enterprises are
less saddled with financing debt they are more quickly able to turn a profit. The LPR investor visa
petitioners are still able to qualify for conditional LPR status under these investment structures
through the multiplier rules for employment and capital that the USCIS employs. Thus, limited
partnerships of domestic investors with LPR investor visas has become a popular option for
financial stabilization and enterprise start-up in Regional Centers as diverse as Philadelphia and
South Dakota.
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In the efforts to rebuild the sections of New Orleans damaged by Hurricane Katrina, developers
and officials alike have taken an interest in attracting foreign capital. USCIS officials are working
closely with New Orleans officials to establish New Orleans as another Regional Center for LPR
investor visa investments. Officials at USCIS are hopeful that the program success that the
Philadelphia targeted center is experiencing can be replicated in New Orleans. Since being
designated a Regional Center, Philadelphia has attracted over 100 LPR investors and most of their
investments are being used to help finance the renovation and transformation of the 1100 acre
shipyard (for further discussion, see Appendix B).

121 Lincoln Stone, INS Decisions Cloud Future of Investor Pilot Program, 6 Bender’s Immigration Bulletin 233 (March
1, 2001).
122 Rep. Sensenbrenner wrote a letter to USCIS Director Eduardo Aguirre on April 6, 2005 asking the USCIS to
institute premium processing and concurrent filing for immigrant investor petitions (Mailman, Stanley, and Stephen
Yale-Loehr. “Immigrant Investor Green Cards: Rise of the Phoenix?” New York Law Journal, April 25, 2005. At
http://www.millermayer.com/EB5NYLJ0405.html, visited January 23, 2007.).
123 Letter from Lincoln Stone, Chair of the Investor Committee of the American Immigration Lawyers Association, to
Michael Aytes, USCIS Acting Associate Director of Operations, November 16, 2005.
124 Lincoln Stone, the Chair of the Investor Committee of the American Immigration Lawyers Association, noted the
generated level of capital in four targeted areas. According to an informal survey Stone had conducted of four targeted
centers (California Consortium for Agricultural Export, Philadelphia Investment Development Corporation, Golden
Rainbow Freedom Fund, and South Dakota international Business Institute), these centers had attracted $121.3 million
in capital in their two-year existence (Letter from Lincoln Stone, Chair of the Investor Committee of the American
Immigration Lawyers Association, to Michael Aytes, USCIS Acting Associate Director of Operations, November 16,
2005.).
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In the 111th Congress, the Omnibus Appropriations Act, 2009 (H.R. 1105), would extend the
immigrant investor pilot program through the end of FY2009. The program was initially due to
sunset at the end of FY2008. However, the program was extended through March 6, 2009, by a
continuing resolution.125 The immigrant investor pilot program visa was last granted a multiyear
extension under the Basic Pilot Program Extension and Expansion Act of 2003.126 Since the
program has garnered support from numerous Members of Congress in the past, legislation
proposing either an extension of the program or making it permanent is likely to be introduced
later in the 111th Congress. There are currently no other programs for targeting investments by
immigrant investors to the United States.
Additional investor visa issues that could surface may relate to temporary investors. In terms of
nonimmigrant visas, the Danish government has been lobbying the United States to grant E-2
treaty investor visas to Danish nationals. Originally, this provision was granted to the Danes on
May 2, 2001 as part of a protocol to the treaty granting nationals of Denmark E-1 nonimmigrant
trader visa eligibility. The protocol was never ratified, however, due to congressional objections
over the inclusion of immigration provisions in a trade agreement. Subsequently, Representative
Sensenbrenner introduced H.R. 3647 in the 109th Congress, which was passed in the House on
November 16, 2005, and would have allowed nationals of Denmark to enter and operate in the
United States as investors under E-2 treaty investor nonimmigrant visas. Currently, Danish
nationals are only allowed E-1 treaty trader visas. Denmark is one of four countries whose
nationals are eligible for E-1 treaty trader visas, but not E-2 treaty investor visas (see Appendix
A).

125 H.R. 1105, Division J, §101.
126 P.L. 108-156.
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Table A-1. E-Class Visa Privileges by Year of Attainment
Country
Classification
Year of Visa
Albaniaa
E-2
1998
Argentina E-1
1854
Argentina E-2
1854
Armenia E-2
1996
Australia E-1
1991
Australia E-2
1991
Australia E-3
2005
Austria E-1
1931
Austria E-2
1931
Azerbaijana E-2
1901
Bahraina E-2
1901
Bangladesha E-2
1989
Belgium E-1
1963
Belgium E-2
1963
Bolivia E-1
1862
Bolivia E-2
2001
Bosnia & Herzegovina
E-1
1982
Bosnia & Herzegovina
E-2
1982
Bruneib E-1
1853
Bulgariaa E-2
1954
Cameroona E-2
1989
Canada E-1
1993
Canada E-2
1993
Chile E-1
2004
Chile E-2
2004
Chile H-1B-1
2004
China (Taiwan)
E-1
1948
China (Taiwan)
E-2
1948
Colombia E-1
1948
Colombia E-2
1948
Congo (Kinshasa)a E-2 1989
Congo (Brazzaville)a E-2 1994
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Country
Classification
Year of Visa
Costa Rica
E-1
1852
Costa Rica
E-2
1852
Croatia E-1
1982
Croatia E-2
1982
Czech Republica E-2 1993
Denmarkb E-1
1961
Ecuadora E-2
1997
Egypta E-2
1992
Estonia E-1
1926
Estonia E-2
1997
Ethiopia E-1
1953
Ethiopia E-2
1953
Finland E-1
1934
Finland E-2
1992
France E-1
1960
France E-2
1960
Georgia E-2
1997
Germany E-1
1956
Germany E-2
1956
Greeceb E-1
1954
Grenadaa E-2
1989
Honduras E-1
1928
Honduras E-2
1928
Iran E-1
1957
Iran E-2
1957
Ireland E-1
1950
Ireland E-2
1992
Israelb E-1
1954
Italy E-1
1949
Italy E-2
1949
Jamaicaa E-2
1997
Japan E-1
1953
Japan E-2
1953
Jordan E-1
2001
Jordan E-2
2001
Kazakhstana E-2
1994
Korea (South)
E-1
1957
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Country
Classification
Year of Visa
Korea (South)
E-2
1957
Kyrgyzstana E-2
1994
Latvia E-1
1928
Latvia E-2
1996
Liberia E-1
1939
Liberia E-2
1939
Lithuaniaa E-2
2001
Luxembourg E-1
1963
Luxembourg E-2
1963
Macedonia E-1
1982
Macedonia E-2
1982
Mexico E-1
1994
Mexico E-2
1994
Moldovaa E-2
1994
Mongoliaa E-2
1997
Moroccoa E-2
1991
Netherlands E-1
1957
Netherlands E-2
1957
Norway E-1
1928
Norway E-2
1928
Oman E-1
1960
Oman E-2
1960
Pakistan E-1
1961
Pakistan E-2
1961
Panamaa E-2
1991
Paraguay E-1
1860
Paraguay E-2
1860
Philippines E-1
1955
Philippines E-2
1955
Polanda E-2
1994
Romaniaa E-2
1994
Senegala E-2
1990
Singapore E-1
2004
Singapore E-2
2004
Singapore H-1B-1
2004
Slovak Republica E-2 1993
Slovenia E-1
1982
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Country
Classification
Year of Visa
Slovenia E-2
1982
Spain E-1
1903
Spain E-2
1903
Sri Lankaa E-2
1993
Suriname E-1
1963
Suriname E-2
1963
Sweden E-1
1992
Sweden E-2
1992
Switzerland E-1
1855
Switzerland E-2
1855
Thailand E-1
1968
Thailand E-2
1968
Togo E-1
1967
Togo E-2
1967
Trinidad & Tobagoa E-2 1996
Tunisiaa E-2
1993
Turkey E-1
1993
Turkey E-2
1990
Ukrainea E-2
1996
United Kingdom
E-1
1815
United Kingdom
E-2
1815
Source: CRS presentation of data from the U.S. Department of State Foreign Affairs Manual, 9 FAM §41.51.
a. Countries with only E-2 visa privileges.
b. Countries with only E-1 visa privileges.
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There are currently numerous targeted economic regions set up for the Immigrant Investor Pilot
Program for the EB-5 visa category. These targeted areas have focused on different types of
investments in order to achieve economic benefits for the given region. Below are descriptions of
a couple of the projects that are currently in place under the Immigrant Investor Pilot Program
and the results these projects are producing.
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The South Dakota International Business Institute (SDIBI), Dairy Economic Development
Region (DEDR) is the only regional targeting center currently run by a state government.
Approved in June 2005, this Regional Center was the result of a state-wide effort to find an
improved method of attracting foreign capital to South Dakota. From the state’s perspective, the
EB-5 pilot investor program offered a more promising solution than the E-2 nonimmigrant visa,
since officials could offer investors the benefit of LPR status.127 Additionally, the job-creation
criterion of the EB-5 visa aligned well with the state’s focus on job creation from foreign
investments (as opposed to isolated capital injections). In its application for Regional Center
designation, the state said it would focus its efforts on attracting dairy farm investors. USCIS
agreed to the designation on the condition that South Dakota would allow for limited partnerships
of foreign investors with domestic farmers.128 As a result, South Dakota currently has enterprises
fully owned and operated by foreign investors, as well as limited partnerships.
Since the regional designation took effect, South Dakota has attracted 60 foreign investors to its
dairy industry (with an additional 10 applications still pending).129 These foreign investors have
injected approximately $30 million into the South Dakota economy, with an additional $6 million
in matching funds coming from local farmers. Furthermore, this combined $36 million in
invested funds has resulted in almost $90 million in bank financing for the various dairy
investment projects. As a direct consequence of these foreign investments, 240 additional jobs
have been created and 20,000 additional cows have been brought to South Dakota.130 Using the
RIMS II multipliers for investment and employment,131 the foreign investments from EB-5
immigrants have resulted in a total of 638 additional jobs and over $360 million in additional
funds to the regionally targeted economy.
According to SDIBI/DEDR Director Joop Bollen, the pilot program has afforded South Dakota “a
tremendous opportunity,” not only because of the direct investments and multiplier effects, but

127 Based on CRS discussion with Joop Bollen, Director of the South Dakota International Business Institute,
November 28, 2006.
128 Letter from William R, Yates, Associate Director of USCIS Office of Operations, to Joop Bollen, Director of the
South Dakota International Business Institute, June 11, 2005.
129 Based on CRS discussion with Joop Bollen, Director of the South Dakota International Business Institute,
November 28, 2006.
130 Ibid.
131 For the South Dakota targeted region, the RIMS II multipliers are 2.9 for investment and 2.66 for employment.
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because of the other investments made by the foreign investors.132 According to Director Bollen,
the attraction of foreign investors has had significant spillover effects into the restaurant and meat
packing industries. As a result, SDIBI/DEDR hopes to focus on attracting additional investments
for its meat packing plants. As such, Director Bollen stated that it was of paramount concern to
the SDIBI/DEDR that USCIS have sufficient resources to quickly adjudicate EB-5 immigrant
visa petitions. If the adjudication process is too long, Director Bollen stated, then the opportunity
cost may make a South Dakota dairy investment unappealing to foreign investors.133
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CanAm Enterprises is a private financial advising group which serves to structure, promote and
administer the Philadelphia Industrial Development Center (PIDC) Regional Center.134 The group
works in conjunction with the City of Philadelphia through the PIDC to facilitate the city
development (mainly in the city’s shipyard area) and provide investor credibility. This
public/private partnership was developed to aid the transition of Philadelphia from a manufacture-
based to a service based economy.135 The main strategy has been to use collateralized loans to
attract investments in industries that provide long-term full time employment. By doing so the
city hopes that investors will wish to invest in other projects and sectors of the city’s economy.136
When the Philadelphia Naval Base was closed as part of the base closures of the 1970s, the base
was handed over to the PIDC for transformation to civilian use. Despite the city’s efforts the
shipyard was unable to remain competitive in the ship construction industry.137 However, with the
passage of requirements following the Exxon Valdez oil spill138 (and the ongoing regulations from
the Jones-Shafroth Act),139 the civilian shipbuilding industry in the United States became
economically viable again.140 The federal government and the city of Philadelphia combined to
invest over $400 million into the Philadelphia shipyard. Additionally Norwegian shipbuilding
companies were brought in as investors in the shipyard and provided valuable training and human
capital to the shipyard. Since production restarted, EB-5 investors have become increasingly
important for providing funds to remove production bottlenecks. A recent example includes the
use of EB-5 funds for the development of a more advanced painting technology for the ships.141

132 Based on CRS discussion with Joop Bollen, Director of the South Dakota International Business Institute,
November 28, 2006.
133 Ibid.
134 On April 26, 2008, CanAm published a press release stating: “CanAm Enterprises, LLC is pleased to introduce the
Los Angeles Film Regional Center, which was designated by USCIS on March 24, 2008, and will specifically target
investments in the motion picture and television industry in Los Angeles County, California.” (CanAm Enterprises,
“CanAm Introduces the LA Film Regional Center,” Press release, April 26, 2008, available at http://eb5dvd.com/
news.php?inc=3&nid=59.
135 Based on CRS discussions with Tom Rosenfeld, President & CEO, CanAm Enterprises, November 28, 2006.
136 Ibid.
137 Based on CRS discussions with Tom Rosenfeld, President & CEO, CanAm Enterprises, November 28, 2006.
138 P.L. 101-380.
139 The Jones-Shafroth Act is a section of the Merchant Marine Act of 1920 (46 U.S.C. 883; 19 CFR 4.80 and 4.80b).
Designed to protect the United States shipping fleet, the law requires that cargo moving between U.S. ports be carried
by ships that are built in the United States and at least 75% owned by American citizens or corporations.
140 Based on CRS discussions with Tom Rosenfeld, President & CEO, CanAm Enterprises, November 28, 2006.
141 Ibid.
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Philadelphia is one of the Regional Centers that has been most successful in attracting foreign
investors through the EB-5 visa. There are approximately 60 EB-5 visa investors in Philadelphia
who have invested a total of $75 million into the city.142 Additionally, there are around 30
petitions that are under review for other investment projects. The lead official at CanAm
Enterprises told CRS that while they believe the funds have been important to the city, the human
capital the investors bring is equally important. This official stated that the investors being
brought to the United States represented highly competent entrepreneurs, who not only made
investments in the city beyond their initial investment, but also facilitated greater economic
activity through exchanges with their existing foreign networks.143

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Chad C. Haddal

Analyst in Immigration Policy
chaddal@crs.loc.gov, 7-3701

142 Ibid.
143 Ibid.
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