Academic journal article Current Politics and Economics of the United States, Canada and Mexico

Foreign Investor Visas: Policies and Issues *

Academic journal article Current Politics and Economics of the United States, Canada and Mexico

Foreign Investor Visas: Policies and Issues *

Article excerpt

INTRODUCTION

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.

BACKGROUND

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.

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 Regional Center 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. …

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