EB-5 program extended. On December 15th, one day before the EB-5 Regional Center program was set to expire, the House and Senate leadership have extended the EB-5 Immigrant Visa Program until September 30, 2016. No part of the program will change.
What does it mean for investors?
- There will be no increase in the minimum investment amount and no change in definition of the Targeted Employment Areas (TEAs). The I-924, I-526, and I-829 will all continue as normal to be accepted, processed and adjudicated.
What is the EB-5 Program?
- The EB-5 program allows foreign investors to invest at least $500,000 or $1 million (depending on the area) in a commercial enterprise that will boost the U.S. economy and create at least 10 full-time, permanent jobs for qualified U.S. workers.
Where are EB-5 investors investing their funds?
- Most of the investor funds come in through regional centers, which are private-sector entities that pool investor funds to develop large-scale projects like hotels or condominiums.
How close did a new bill come to passing?
- In November 2015, the Senate and House circulated a draft produced by the House and Senate Judiciary Committees to the EB-5 industry.
- This draft came close to compromise that would have authorized the EB-5 regional center program for another 5 years, but members of the EB-5 industry provided feedback and criticism of the draft.
- The EB-5 industry advocated for strong integrity and enforcement measures.
Why was the EB-5 Program "extended"?
- While the negotiations and changes were significant and extensive, there was agreement that more changes were necessary before the bill could be workable.
- They needed more time to negotiate, study, and receive additional feedback to make the bill successful.
- The request for a one-year extension was approved.
- The compromise bill that was almost passed, would have raised the minimum investment from $500,000 to $800,000 and it would have imposed a new $10,000 filing fee per EB-5 investor.
What are critics of the EB-5 Regional Center Program saying?
- There are many critics of the EB-5 program who are upset about developers getting funding at the $500,000 level, funds that are designated for targeted employment areas (rural areas and high-unemployment areas) and using these capital investments to develop luxury projects in affluent neighborhoods.
- Critics say they are gerrymandering and they are calling for an end to the EB-5 regional center program or a tightening of these loopholes that take investments away from rural areas.
Why are developers attracted to the EB-5 Program?
- Developers, particularly in New York, are drawn to this program because it offers them a low interest way to raise a lot of capital. Foreign investors are often times more interested in the green card than the return on their investments, so developers can raise a lot of capital with little to no interest, while a bank loan would have a high interest.
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