Deadline for EB-5 Renewal Approaches
September 30, 2015
As the Sept. 30 deadline for Congress to renew the fifth employment-based preference (EB-5) investment program approaches, questions arise as to whether or not the act will expire or if a short-term extension will be established. Though nothing is set in stone to-date, it seems likely that if the immigrant visa program continues to exist beyond Sept. 30, changes will be made to the legislation.
One change that appears to be as likely as any is an increase in cost of investment for those who look to gain permanent residency through the program. Since 1990, an immigrant investor had to pay $500,000 to invest in a company in a Targeted Employment Area (TEA). Patrick Hogan, President at California Military Bases (CMB) Regional Centers, said the “most common amount” being discussed among congressmen is an increase to $800,000.
Along with a potential cost increase, Hogan believes the cap of 10,000 authorized investor visas will not be increased. Regulators not only count investors as a part of the cap, but also dependents of the investors, making the actual number of investors lower than the cap may suggest.
“There are a host of other proposed changes being bantered about,” Hogan said. “It is clear Congress will not amend language such that only EB-5 investors are counted towards the 10,000 visa cap.”
Although the EB-5 program only needs to the investor to create 10 jobs per investment, it has generated much more than that since the Immigration Act of 1990. In a 2013 article Washington Post Senior Correspondent Kevin Sullivan wrote that $6.8 billion were invested and over 50,000 jobs were created from 1992-2013 through the program. Sullivan also wrote that the EB-5 program is “booming in popularity,” but also that the program has its opponent:
“…others argue that the EB-5 program amounts to buying citizenship, and that it unfairly allows wealthy foreigners to cut the visa line ahead of others who have waited for years.”
Even with that opposing viewpoint, the loss of the EB-5 program will cost the United States thousands of potential jobs and billions of foreign investment dollars. Along with that, the jobs that are created through the EB-5 program come at no cost to American taxpayers, which is not the case for jobs created by projects through national and local government. Given the state of the U.S. economy, an influx of money from foreign investors could improve the job market and overall cash-flow in foreign and domestic areas.
The EB-5 program affects the American economy, but also helps foreign investors and their dependents find a new home and life in America. Eb5investors.com published an article in January telling the story of Ms. Xu, a permanent green card holder, and her family who first moved to the United States in 2009. Ms. Xu spoke of the easiness of the process to obtain a residency through the regional center process.
Especially from 2008-2013, the EB-5 program helped America stave off the recession and improve the job market without increasing the burden on local tax payers. Also, the program helped business owners gather funding from foreign sources when domestic sources of income were much harder to come by.
“By 2011, I already had my green card,” Ms. Xu said in the interview. “Because the regional center’s operations were really sound, the audit process went really quickly.”
Through the work of the Regional Centers, the EB-5 program has generated several success stories for foreign investors and American employees alike. Time will tell as to whether or not the program will extend into the next fiscal year, but the program has, to this point, proven to generate jobs and economic growth in America.
Here at Shihab Law Firm the firm’s EB-5 practice team inform individuals on the advantages and disadvantages of individual and regional center EB-5 petitions as compared with other immigration options as well as offer advice on reputable regional centers with proven track records. The firm guides its clients through the entire process from thorough documentation of clients’ lawful funds to filing for conditional residency, followed by removal of condition then applying for citizenship. Contact us today for a ConsultationAdditional Sources
1) CMB Regional Centers – EB-5 Renewal Update, Patrick F. Hogan, letter, 09-03-2015.
2) Foreign citizens making big investments in U.S. in exchange for green cards [http://www.washingtonpost.com/politics/foreign-citizens-making-big-investments-in-us-in-exchange-for-green-cards/2013/03/21/ecf250d2-8d72-11e2-b63f-f53fb9f2fcb4_story.html], Sullivan, Kevin, Washington Post, 03-21-2013.
3) EB-5 Visas Help Many Who Aren’t at All Wealthy [http://www.wsj.com/articles/eb-5-visas-help-many-who-arent-at-all-wealthy-1443213760], Letters to editor, Wall Street Journal, 09-26-2015
1) Roundtable calls on congress to renew EB5 before Sept. 30 sunset [http://rew-online.com/2015/09/03/roundtable-calls-on-congress-to-renew-eb5-before-sept-30-sunset/]
2) Living the American Dream: First-Hand Story of a Successful Investor [http://www.eb5investors.com/magazine/article/eb-5-investors-success-story]