U.S. EB-5 Program

Last Wednesday, U.S. Congress extended the EB-5 Investor Visa Program once more, allowing it to run until December 9th without change. The program was set to expire on the last day of September this year, however, given that it’s an election year, it was no surprise that the extension was voted.
 
The EB-5 program allows foreign investors to obtain American green cards in exchange for an investment of US$500,000 in approved Regional Centers, or US$1 million in a new enterprise in a non-designated Targeted Employment Area (TEA). The investment must also create 10 full-time jobs for U.S. citizens.
 
At the end of last year’s government fiscal year, September 2015, Congress extended the EB-5 program, and allowed two extensions before last week’s vote. President Barack Obama signed the bill putting the extension into law on Thursday. The fact that the continuing resolution was granted without reform was met with disapproval by many government officials as well as EB-5 investors. The program is in dire need of reform since fraudulent cases cropped up across the country, the most notable case being Vermont’s Jay Peak resort. The reforms would serve to protect investors in such cases, and give them a chance to still obtain U.S. residence despite the scheme of the Regional Center invested in.
 
Although the minimum required investment hasn’t increased since 1992, attorney Ronnie Fieldstone, who represents developers and EB-5 regional centers, expects the new bill to raise the minimum investment requirement from US$500,000 to US$800,000 for Regional Centers and from US$1 million to US$1.2 million for new enterprises. The new EB-5 bill would also likely redefine TEAs.
 
Last June, Vermont’s Senator Patrick Leahy proposed a bill that would give the EB-5 program a five-year lifeline. The proposed bill, Senate bill 1501, will likely serve as the foundation for EB-5’s future after the current extension is over in December. Leahy was strongly opposed to the continuing resolution unless changes were made to the program.
 
The reformed legislation would have allowed defrauded investors to reinvest in a new EB-5 project. It would have also allowed the U.S. Department of Homeland Security to increase investigations, site visits, and audits of Regional Centers to decrease fraudulent cases.
 
All in all, the EB-5 program requires a big overhaul. The current long wait lists for Chinese investors, and rampant fraud due to poor oversight are damaging the program’s reputation. We will have to revisit the case in a couple of months to find out which reforms will be made law, and investors are keen on the changes as it will better protect them and their families

For more information on the EB-5 Investor Visa Program, please click here.
 
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