The Golden Visa: EB-5s

*UPDATE - 8 Days after I published this piece, Donald Trump announced he would be replacing this program for exactly the reasons I criticized it here, and replace it with a direct “buy a gold card” from the government program, like I suggest - see full update at the bottom.*

Let me make a prediction: 90% of the people who find themselves on this page have never heard of the EB-5 Visa program for immigration to the US, also known as the “Golden Visa”. Let me know in the comments if I’m right or wrong.

Given all the recent in-fighting regarding H1-Bs, and the general saliency of immigration in the culture war, it’s weird that this program never makes it into the discourse™.

Basically, EB-5s are a golden ticket to the chocolate factory of America, but if Veruca Salt’s dad just paid directly for the ticket instead of buying a million chocolate bars, and he bought the ticket directly from Willy Wonka.

Here’s how it works: a rich foreigner submits an application to the EB-5 program, and the requirement is that they have to fund $1,050,000 as an equity investment into a new commercial enterprise in the US, which can be basically any for-profit business. Their application needs to show that the company they’re investing in has a business plan that they expect will create or preserve at least ten full-time jobs at the business, for at least two years. And then the foreign applicant, along with their spouse and children, get permanent residency in the US, aka a green card.

The EB-5 program has an acceptance rate, for applicants that use the various professionals that operate in this arena, of about 96%. This is in comparison to H1-Bs, which require employers to jump through a ton of hoops and sponsor their applicants, and have an acceptance rate of less than 25%. So basically, any foreigner with a million bucks, who isn’t on some kind of terrorism watch-list, can buy a green card, if they know about the program and make it under the quota.

Is that good or bad? Well, from my perspective, if they simply paid the US government a million bucks for the green card, it’d be fantastic. I’ll explain why below. But the way this actually works - of course - is by funneling money to people who are already rich, while most citizens get nothing out of this. Because that’s how our immigration system works, as a way to funnel cheap labor and cheap money to employers.

Let’s say a partnership owns a bunch of hotels throughout the south-east, or some breweries in Colorado. They want to open a new location. Or, let’s say one of their existing locations had a bad year or two, and incurred 20% in losses over the past 12 months (those also qualify). That business is now eligible to take in EB-5 investment funds.

If you think there’s a requirement that the business must be owned by fledgling entrepreneurs, or first-time entrants, or a group that’s desperate for funding or their start-up may be about to fold, you’d be wrong. This can be a family-owned or small group of successful investors who are already extremely rich, or it can be a business that has already taken tens of millions in traditional funding from standard sources. There are almost no requirements whatsoever, other than the business having a sufficient plan to show that taking in EB-5 funds will help create or preserve 10 full-time jobs, and it being a for-profit commercial enterprise that’s not directly illegal.

If you think those 10 jobs need to go to US citizens, you’d also be wrong. The ten jobs saved or created can go to anyone authorized to work in the US, including temporary residents, asylum seekers, refugees, or people residing here under suspension of deportation.

And if you think they have to be good jobs that pay a middle-class or livable wage, you’d be wrong once again. There are really no requirements around the type of job at all, other than it being legal and full-time, i.e. not paying less than minimum wage, for at least 35 hours per week. Oh, and if the business is located within one of the roughly 550 “regional centers” (which they basically all will be), the ten jobs don’t even have to be actual employees, they can be “indirect jobs” i.e. utilizing independent contractors like Uber drivers.

The business also does not need to actually prove that they DID manage to create and maintain ten full-time jobs for two years, they just need to show in the application that they have a reasonable expectation of doing so.

As you can imagine, there’s an entire industry that has sprung up around facilitating these applications. There are “TEA” companies that exist to aggregate EB-5 funds for deploying to multiple businesses in designated “targeted employment areas”, which are basically rural places full of poor people. The TEA groups charge a fee naturally, and this way, rather than investing their million dollars in one specific business, the foreigner pays the TEA company, who then distributes the funds among a bunch of businesses they’ve enrolled. And they and their lawyers are all experts on knowing exactly what you need to include on the applications, which admittedly is, of course, a thick pile of documents. Financial planners and tax advisors give webinars and actively market EB-5 financing to their rich clients, and there’s a whole service sector skimming healthy fees off the top to properly document and structure things. Of course.

And what do the businesses taking in EB-5 funds get out of this? Well, they get cheap money on amazing terms. The EB-5 investment CANNOT be a loan, nor preferred equity, nor include any guaranteed rate of return nor contractual right of repayment. The main requirement is that the foreign applicant’s money has to be truly on the line, with a chance it’ll never be repaid.

This provides the business owners with far better terms than they’ll be able to get from a venture capitalist or a bank, or even from friends and family if they fund-raise that way. It’s just very cheap capital on better-than-market terms — typically the EB-5 funds will sit at the very bottom of the cap table and last in the waterfall, so the EB-5 investor gets paid back last after the creditors and preferred equity funding, if they get paid back at all. It’s as close to free money as you can get, and all the business needs to show is that they expect to be able to hire ten hotel maids or dish-washers, for their project.

So who ends up mostly utilizing this program? Is it the plucky new entrepreneur opening a restaurant in baton rouge or an event-planning business in Montana? No, of course it’s not. Those people have never even heard of this program.

For the most part, it’s developers who are building their fifth golf course or luxury condo community or resort. The people who can utilize these funds multiple times, on multiple projects, and take tens of millions in funding, rather than just a piddly million or two. Normal people have never even heard of EB-5s, and this is the kind of thing that circulates around the networks of people who have estate planners and tax lawyers. The guys building the golf course get cheap money, some Chinese guys get a green card, and everyone’s happy.

There aren’t many other requirements, this is just limited by a quota per year, so only around 10,000 get granted.

Well, if you’re building a new resort, it’s absolutely fantastic. You probably won’t find a better way to secure funding, outside of a pure government grant that would come with strings. You’re getting free money with no guaranteed repayment terms.

Is it good for US citizens? Well, on the one hand, bringing foreign money into the US, instead of sending it out, seems good. And wouldn’t we rather have rich immigrants than poor ones?

Rich immigrants buy stuff and spend money and pay lots of taxes, which is good for all of us. Impoverished immigrants drive down wages of the lowest-paid Americans and utilize social services like schools, but everyone else gets cheap fruit and doesn’t have to work in slaughter-houses, so it’s a trade-off. I won’t repeat the well-worn arguments there, everyone’s busy arguing about them elsewhere.

So I suppose the main question turns on whether you think that Americans who are already rich really need a whole government program to funnel them even more easy money, with no clear benefit to anyone else. I’m sure that not every single individual business owner that takes in EB-5 funding is already rich. But the vast majority are. The few businesses I’m personally aware of that have taken this funding all have owners with net worths north of $25M. And most of the jobs created were low-level, minimum wage type jobs: mostly kitchen workers, landscaping, and maids. You can guess at the citizenry of the people who filled them.

But also, why do we need a program to create a complicated justification for creating an inch of paperwork that allows professionals to skim their cream, just to get rich business owners even cheaper money? Why don’t we just let rich foreigners directly buy their Visa from the federal government? Why bother with these requirements at all? Couldn’t we just let aspiring residents say here’s my proof I’m not a criminal, here’s my million bucks, now gimme that green card?

Considering we have a $25 trillion federal debt, wouldn’t it be more directly to the benefit of all Americans for that $1M per EB-5 Visa to just go straight to the US Treasury, to help pay that down? And why are we limiting them to only about 10,000 per year, so there’s a wait list?

No one knows exactly how many illegal immigrants enter the US every year, but the consensus seems to be that it’s about half a million. If we’re getting that many immigrants each year anyway, who are breaking the law, why not allow more to obtain lawful green cards, and just charge a gigantic fee? At the amount of per-applicant EB-5 funding requirements, that would provide us with 500 Billion Dollars per year!

A drop in the bucket compared to our debt, to be sure, but it’s close to what DOGE is likely to save by firing US workers, and directly charging immigrants wouldn’t require anyone to lose their job. Or raising taxes. So why wouldn’t that be a good thing, to help pay down the debt that all of us are going to end up paying one way or another, either through taxes, inflation, or austerity? Plus we’d get a bunch of new rich people here to spend money, which would naturally create more jobs and generate tax revenue in itself.

Sounds like a virtuous cycle to me. But I suppose direct-charge would just be far too simple and obviously beneficial to all citizens, rather than a way for the federal government to funnel money to its donor class.

Oh, and in case you were wondering, the government does charge a fee for the EB-5 application, on top of the $1,050,000 funded to businesses. So I guess us mere citizens obtain some benefit. How much, you ask? About $11,000. Chump change.

But Kryptogal, that’s not realistic. There aren’t 500,000 millionaires out there trying to move here who’d be willing to pay a million dollars each.

Maybe not. Google says there are about 36M millionaires outside of the US, as of 2025. But even if we could only get 50,000, wouldn’t that still be a good thing, rather than just constantly importing the cheapest workers for free? Well, not even for free, because there’s the whole moral hazard thing, of looking the other way while people flagrantly break the law. But even if we only got 50,000 immigrants each year by direct charge at a million bucks, that’d still be 50 Billion Dollars in revenue that US taxpayers don’t have to pay. Sounds good to me. Or if you want more, drop the fee or make it a sliding scale.

No, no, no, we can’t do that. Only coyotes and traffickers get to profit off bringing immigrants here. We couldn’t possibly just charge an entrance fee that would benefit someone besides foreign traffickers and rich guys who want cheap money to hire someone to mow their golf course. That would be gauche.

Now, I suppose if you’re someone who just doesn’t want any immigration at all, you still won’t like the sounds of this. Permanent residency is a precious natural treasure and not to be auctioned off to the highest bidder, something like that?

But for everyone who is immigration-friendly, direct pay-for-play seems obviously rational and beneficial. We always hear about how the US is the premier global destination for ambitious talent, and how everyone wants to be here. So why not just charge a big fat entry fee?? Rather than this contorted system that’s kept sort of quiet, because selling membership to the US sounds a little crass, but…business interests do love ways to get cheap foreign money, so I guess we’ll allow it, but keep it small and on the down-low.

There’s no way to know exactly which investors have utilized the EB-5 program, as that isn’t publicly-available information. Though it’s strongly suspected that’s how Elon Musk got his permanent residency. He says he was on H1-B, which may be true, but most H1-Bs don’t offer a path to permanent residency, so it’s a lot more likely he just purchased his green card.

I’m also sure there are plenty of pro-immigration libertarians advocating for auctioning off green cards. I haven’t looked, but it’s an easy guess that this type of thing would be exactly the type of program that Richard Hanania or Bryan Caplan would advocate for. And they also likely think that the fact that the money goes directly to private, for-profit interests is a good thing, rather than going to the US Treasury. I can imagine an argument that EB-5 allows the rich foreign applicant to shop around for the best investment, directing capital to the best uses, which will naturally often be businesses owned by rich guys who have already proven a track-record of success.

I would disagree about that, with my imaginary interlocutors. Those guys already get every tax-break and structural benefit from our system. Our citizens should decide who gets to come in, and how many, and what broad-based benefits we expect in return for acting as gracious hosts. And the EB-5 program, in conjunction with our so-called “system” where we just let half a million desperate people come in unlawfully each year, along with severely limited alternate avenues for legal immigration, all show precisely who the system is designed to work for. And it’s not the general benefit of the American people. But it could be, if Congress wanted it to.

I myself like immigrants very much, as a general rule. They’re often made of tougher stuff than natural born citizens. But I object to a system that grants a public privilege in a way that benefits only a tiny slice of private interests. And if so many people want to be here, we should charge for the privilege. We can still keep the other fee-free avenues as well, as basically a citizenship-scholarship program.

If you want to read more about this, the details are here: https://www.uscis.gov/working-in-the-united-states/permanent-workers/employment-based-immigration-fifth-preference-eb-5/about-the-eb-5-visa-classification

If you want to see how they’re marketed, just google EB-5 investment opportunities and a bunch of the aggregators will pop up. You’ll see that they advertise to foreign investors as “the fastest pathway to US citizenship” and “access to free K-12 education” with “100% Acceptance” and “no restrictions”. See here, random site that came up when I googled, no affiliation: https://www.3gfund.com/ You can also see that most of the projects being funded are for things like large resort developments near ski areas in Idaho that sell million dollar condos, or luxury towers in Tampa (which for some reason is a TEA because apparently Tampa suffers from high unemployment?!).

The EB-5 program has been around for decades, and was enacted by Congress in 1990.

This post is not my typical blend of hot and tasty cultural provocation with a side of humor (though if you like that sort of thing, hit that Subscribe button). It’s just something I thought people should know about.

About a week after publishing this, the White House announced it would be replacing the EB-5 program, with one where rich immigrants could just pay the US $5M for a green card. Trump touted exactly the benefits I describe here: “They’ll be wealthy and they’ll be successful, and they’ll be spending a lot of money and paying a lot of taxes and employing a lot of people, and we think it’s going to be extremely successful.” His commerce secretary said they’d be shutting down the EB-5 program within weeks, as a “nonsense” program full of fraud.

And guess who’s freaking out? Huge real estate developers — exactly who uses this program, as I described. The New York Times reports that the high-end real estate world is “panicking”:

The EB-5 Program “represents a huge profit bump for a small but powerful political contingency: major real estate developers. They are not likely to see EB-5 killed without a fight. ‘Cheap capital is the crack cocaine to the real estate industry and probably every other industry,’ said Matt Gordon, the C.E.O. of E3iG, which advises both foreign investment-based visa applicants and U.S. companies seeking funding. ‘They and their rather large political donations are going to be very motivated.” Paywalled article: Trump’s ‘Gold Card’ Set Off Panic in an Unexpected Place: Real Estate

Clearly, I think this is a great move. It’s exactly the policy I prefer, for the reasons I set out. We are selling residency anyway, so if we can get a higher price, and one that benefits the public rather than just a handful of moneyed private interests, I’m all for it. And I am no fan of Donald Trump, but this is a fantastic move.

I’m somewhat surprised he’s willing to do it, given that his own development projects, and his son-in-law’s, have used EB-5 funds. But perhaps this is an example of him putting the public interest above his own family’s self interests…that would be shocking, but who knows. Maybe he’s just floating the idea and expecting those donors to revolt so it never goes anywhere. Or maybe he wants to call a bluff on the Democrats. Or maybe this is targeted at a specific enemy that he knows depends on EB-5 funds. Or maybe he’s just actually interested in a good idea.

So, is it possible that some low-level Trump staffer is a Forbidden Closet of Mystery fan, saw my piece, and circulated the idea up the chain?? I choose to believe that’s true. Currently taking appointments for speaking engagements regarding my other brilliant policy ideas.

Speaking of which, I really need to get some attention for my Policy to Radically Enhance the Beauty and Coolness of the United States via Gigantic Statue Construction Across the Nation. It’s an embarrassment our only famous huge statue was given to us by France! We should have glorious stone beacons in every state in the country.