With the current economic downturn, Members of the 111 th 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—until September 30, 2012, 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. Since the Immigration Act of 1924 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. 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. 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. With the Immigration Act of 1990, 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, 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 2003 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. There is currently one immigrant class set aside specifically for foreign investors coming to the United States. Falling under the employment-based class of immigrant visas, the immigrant investor visa is the fifth preference category in this visa class. Thus, the immigrant investor visa is commonly referred to as the EB-5 visa. 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. 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. 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. 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). As amended by the Immigration Act of 1990, the Immigration and Nationality Act (INA) provides for an employment-based LPR investor visa program designated for individuals wishing to develop a new commercial enterprise 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 million into the enterprise, such that the investment goes directly towards job creation and the capital is "at risk." However, if an investor is seeking to invest in a "targeted area" then the required capital investment may be reduced to $500,000. For each fiscal year, 7.1% of the worldwide employment-based visas (roughly 10,000 visas) are set aside for EB-5 investors, of which 3,000 are reserved for entrepreneurs investing in "targeted areas." The business and jobs created must be maintained for a minimum of two years. According to regulations, enterprises being proposed need not be backed by a single applicant. 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. Petitions as a passive investor will not qualify. However, since limited partnership is acceptable, regulations do not prevent the investor from living in another location or engaging in additional economic activities. The Regional Center 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." 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) (although the basic requirements apply to all regional petitions). Up to 5,000 immigrant visas may be set aside annually for the pilot program. These immigrants may invest in any of the Regional Centers that currently exist to qualify for their conditional LPR status. The Basic Pilot Program Extension and Expansion Act of 2003 scheduled the program to sunset in FY2008. However, the Department of Homeland Security Appropriations Act, 2010 ( P.L. 111-83 , §548), extends the authorization of the Regional Center Pilot Program through September 30, 2012. Following the 2003 legislation, USCIS decided to develop a new unit to govern matters concerning LPR investor visas and investments. 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. 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. In contrast to the high number of applications for other employment-based LPR visas, 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 reached 1,361 admissions in FY1997, or 13.6% of the program's visa supply. In subsequent years, the program declined markedly, before increasing up to 1,360 in FY2008. Despite the low numbers of overall investor admissions, the program has seen a marked increase since the implementation of the Regional Center 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. Since FY2004, an additional 1,901 immigrant investor visas have been issued. In the earlier years of the program, it attracted a relatively higher rate of derivatives than principals. 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%.