After the struggling economy significantly slowed demand for H-1B nonimmigrant work visas for the 2010 fiscal year, some Pennsylvania immigration law firms have turned their attention to wealthy foreign investors.
According to H. Ronald Klasko of immigration boutique Klasko Rulon Stock & Seltzer in Philadelphia, H-1B visa applications comprise the "nuts and bolts and bread and butter work" for many immigration firms, but a weakening job market in 2009 changed that.
The first day of filing for H-1B visas each fiscal year is April 1 and, according to Klasko, it's not unusual for the number of filings during the first week, and sometimes the first day, to exceed the fiscal year quota of 85,000 visas.
For FY2010, however, the first day of filings was April 1, 2009, but the cap wasn't reached until almost nine months later, on Dec. 21.
In the weeks leading up to Dec. 21, H-1B work picked up significantly, but prior to that, Klasko said, it was a "totally bizarre time" at his firm and one in which it became necessary to focus on other types of visa applications.
Enter the EB-5 immigrant investor program, which awards visas to wealthy foreigners willing to invest $1 million -- $500,000 in high unemployment or rural areas, as well as in virtually all designated "regional centers" -- in a commercial enterprise that will employ 10 full-time U.S. workers.
Klasko has spent much of his time recently traveling overseas in an attempt to educate foreign investors about the program, which he calls "the hottest thing going on right now in immigration."
The program has been around for close to two decades but, according to Klasko, "hasn't really become popular or been used much until about four or five years ago and hasn't really totally boomed until the last year or two."
China, Korea and Japan are the largest three investors in the EB-5 program, according to Klasko, but "in many parts of the world it's unknown."
That's why Klasko has been traveling the world to promote the program.
The United Kingdom, Canada, Russia, Switzerland and South Africa are some of the countries in which interest in the program is starting to pick up, Klasko said.
Robert S. Whitehill, chairman of Fox Rothschild's immigration group in Pittsburgh, said that, beginning in 1998, the number of EB-5 cases in the country dropped sharply.
That year, the U.S. Immigration and Naturalization Service issued four precedent decisions retroactively tightening restrictions on investments, which resulted in lawsuits and effectively halted the program until 2002.
Whitehill said it wasn't until 2006 or so that interest in the program really picked up again and, by 2008, it was commonplace to see regional center representatives at every immigration conference.
"There was a time when the EB-5 was moribund, it was dead," he said. "It has certainly come back to life."
Like Klasko, Whitehill said he has seen a recent uptick in inquiries about the program in his own practice.
He attributes this phenomenon to a host of factors beyond the slowdown of H-1Bs, such as the diminished value of the American dollar compared to the euro and the recent emergence of newly wealthy people in China, as well as in Russia and other oil-rich countries.
James J. Orlow, of Philadelphia immigration boutique Orlow Kaplan & Hohenstein, said it's a fair assessment that a "selected number" of immigration attorneys who typically handle employment-driven cases have turned their attentions to EB-5 cases in the failing economy but was quick to point out that this type of work is not for everyone.
Orlow said EB-5 cases tend to be very complex and time-consuming and can often extend beyond the expertise of the average immigration lawyer, but the payoff can be significant.
"These are cases that call for an intense amount of work and provide substantial fees and you pay attention to them instinctively," Orlow said, adding that the nature of EB-5 cases is such that they tend to be relatively few and far between even with interest in the program booming.
"These are not garden variety cases," he said. "They are highly technical, require a particular type of client and not everybody has the wherewithal to invest the requisite amount of money."
A PROGRAM TO SPUR JOB CREATION
According to the U.S. Department of Homeland Security, Congress established the fifth employment-based, or EB-5, visa category in 1990 pursuant to the Immigration Act of 1990 and set aside 10,000 visas annually for foreign investors.
Originally, the only option in the program was for an individual to invest either $1 million in a commercial enterprise or $500,000 if the enterprise was located in a rural area -- one with a population of less than 20,000 -- or an area with unemployment rates 150 percent or more of the national rate, according to the DHS.
In this option, an investor is issued a two-year temporary green card and, in order to apply for a permanent green card, must prove after those two years expire that the investment directly created 10 U.S. jobs.
In 1993, according to the DHS, Congress created the Immigrant Investor Pilot Program reserving 3,000 of the 10,000 allocated visas for foreigners investing in designated regional centers across the United States.