Popularly referred to as the ‘Golden Visa,’ the EB-5 Program in its existing format was extended through September 2017 from the earlier set sunset date of April 2017. Despite the extension, the program is already subject to numerous impending flurries of amendment proposals courtesy of the Congress members in efforts to reform it. But before outlining the proposed changes, it is important to understand what the EB-5 program is and who benefits from it.
EB-5 VISA PROGRAM:
The EB-5 Visa program made its debut as an enjoinment of the Immigration Act of 1990 in 1992. It facilitates for foreigners with the ability to invest amounts ranging from $500,000 to a $1 million in eligible U.S projects, to request permanent residence both for their families and themselves. Typically, the government refunds the funds within a given period-usually several years.
The U.S. Commerce Department outlines that an approximate $5.8 billion worth of capital was raised by over 11,000 immigrants between 2012 and 2013 alone courtesy of the EB-5 program. These resources not only funded 562 projects but also generated approximately 174,000 jobs.
In recent times, the EB-5 program has attracted significant interest, particularly from Chinese nationals, with just about every program applicant (85%) originating from China. For China and other nations like India, it is an opportunity to enjoy less pollution, overseas asset transfers and children education.
But even so, the U.S legislators continue to gear up for reforms on the program. Among the fundamental changes set to take the center stage-and which are unanimous with legislators of both divides include:
# 1 TEAs Reclassification:
Currently, every state can designate TEAs. Nonetheless, there is a general feeling that developers are disproportionally utilizing the program in larger cities compared to impoverished or rural areas where this economic stimulus would be of better significance. A number have proposed that the federal government be given the mandate to determine the sectors that qualify for a TEA designation although this idea is also under heavy criticism.
Those opposing this idea of the federal government adequately controlling TEA issuance maintain that such a method is imprecise and unmerited since areas are different. Nonetheless, those backing the idea, maintain than reclassification is vital in ensuring the spirit of this program steers ahead.
Ultimately, it waters down to the question of whether the investors would still show interest in a program set outside the main cities with recognized developers.
# 2 Increased Minimum Investment Amounts:
As of now, the stakes limits with the existing EB-5 program are at $ 500,000 (TEAs) and $100,000 (non-TEAs)-a quorum that has remained since the program’s debut in 1992. Proposed increments to the current minimum would mean minimum rising to $800,000 (TEAs) with another proposal stretching it to $1.35 million (TEAs) and $1.8 million (non-TEAs). This proposal is unanimously agreed upon by numerous stakeholders as acceptable but within reason.
Some industry leaders, however, fear that the increase will render the EB-5 Visa program less attractive especially to investors from China who represents a majority of the investors. Currently, the Chinese are already having a hard time investing $ 500, 000 considering the present currency controls. Considering this, raising the minimum amount would presumably make investing take longer yet.
What’s more, by upping the minimum amount, the EB-5 could well be a less attractive option globally in events where investors can invest and acquire green card correspondents in different nations.
# 3 Integrity Measures
Stringent oversight actions and integrity is yet another proposed change and which seems to receive significant support from stakeholders. Despite having operated with somewhat loose control over the years, the EB-5 has not been free from instances of bad actors, deceptive money-raising schemes, and scandals, which have reiterated the necessity to guarantee investor safety.
The proposed measures revolve around regional center principals /operators background checks, project preapprovals, and certifications of law compliance for securities.
This year an exclusive body-the Regional Centre Compliance Audit program was established by the USCIS in efforts to validate information on annual certifications and applications as presented by the regional centers which is a step towards transparency and integrity of EB-5 program operations.
# 4 Efficient Processing of Visa and Visa Numbers:
Every year, 10,000 investors together with their families benefit from the EB-5 Visa program. Since the depression, this program has risen in popularity among foreign investors and U.S-based developers- a factor that has resulted in multiyear backlogs before the permanent immigration of investors with accepted I-526 petitions.
While the current system offers every family member a single Visa-hence reducing the number of actual investors, many stakeholders are of the view that single visas should represent an entire family if not for the increase of total visas availed per year.
Either proposition would boost the EB-5 capacity while simultaneously reducing the processing backlog currently at over 20,000 applicants which directs investor traffic elsewhere because of the long wait-times.
The EB-5 Visa program has significantly profited the American economy, contributing to hefty amounts of capital in the last few years. As such, with major stakeholders expected to talk their way through to a consensus over the EB-5 reforms in the coming months, legislators are urged to institute essential oversight while showing strong concern towards both the global competitive edge and success of this program.