The EB-5 visa program is an important engine for growth in the American economy. Following the economic difficulties following the 2007 Recession, the EB-5 program became a major source of capital and investment for real estate projects. EB-5 has allowed developers to secure funding for an array of projects in cities like New York, Miami, and in surrounding areas. In Miami and throughout Florida, EB-5 investments have provided the impetus behind the Tap 42 Craft Beer & Kitchen locations that recently opened in Coral Gables and Boca Raton. In Miami itself, the CCCC Miami Towers in the Brickell area of the city will bring mixed-use development to the city.
The EB-5 project creates jobs and makes a real difference in the life of ordinary Americans. The investors themselves can also secure an immigration benefit. That is, after investing into the United States as a job creator, entrepreneurs and their covered close relatives can be rewarded with a pathway to citizenship.
Unfortunately, certain problems with the implementation of EB-5 and the Regional Center Program have led to attacks regarding the program’s fairness to rural Americans. Over time, these criticisms have become increasingly sharp. Now, a bill has been introduced into the U.S. Congress that would terminate the EB-5 program. Predictably, this possibility has led to a flurry of filing activity as individuals living overseas in nations like India and China attempt to reserve a place in line or “grandfathered” status.
Why Are Senators Attempting to End the EB-5 Immigrant Investor Program?
Senators Dianne Feinstein (D-CA) and Chuck Grassley (R-IA) have proposed a bill that would wind down the EB-5 program. In a joint statement with Senator Grassley, Senator Feinstein states that she sees the EB-5 program as “inherently flawed.” She views the program as putting up “U.S. citizenship for sale” and believes that it is “…wrong to have a special pathway to citizenship for the wealthy while millions wait in line for visas.”
However, while Feinstein and Grassley seem to concentrate on the fairness aspect publicly, other statements seem to suggest that their reasons for proposing the end to EB-5 have more to do with the fact that benefits are not reaching their constituents. Grassley and Feinstein have claimed and complained that there are no reliable means to verify job creation numbers. Furthermore, the Senators charge that many of the wealthiest parts of the country have been mischaracterized as areas of high unemployment due to the attractiveness of targeted employment areas (TEAs). A qualifying EB-5 investment made in a TEA is just $500,000 compared to $1 million outside of a TEA.
Unless action is taken to reform and renew the EB-5 program, it will expire on April 28, 2017. Several plans to reform EB-5 have been suggested with most focused on refining the definition of TEAs or increasing the minimum investment. Recently, the Department of Homeland Security itself issued a proposed rulemaking a request that would modify the EB-5 program. The changes would establish different levels of unemployment and set a minimum investment of $1.35 million in high unemployment or rural areas and a minimum investment of $1.8 million in areas where unemployment is average or better.
How Are Immigrant Investors Responding to the Possibility of EB-5’s End?
Some watchers of the EB-5 program have noted spikes in interest for the program from foreign nations like China and India. There are good reasons why interest from these two nations is particularly amplified in the wake of these and other pronouncements.
In the case of China, economic difficulties in the country, pollution, and other reasons have encouraged wealthy Chinese nationals to look to the West. Many wish to obtain American citizenship so that their children will have time to acclimate to American schools and will be on the fast track for admission to a prestigious American university. Unfortunately, the Chinese government has implemented strict capital controls in an attempt to stabilize the renminbi. The end of EB-5 or significant increases to minimum investment levels would close one of the most appealing pathways to American citizenship for wealthy Chinese nations and therefore many are making protective filings in the hopes that Congress will respect the already filed EB-5 applications or create a type of “grandfathered” status.
For individuals from India, recent interest in EB-5 has been driven by pronouncements and expectations that the Drumpf administration will heavily restrict the use of H-1B visas. Indian professionals and the Indian technology sector are highly dependent upon American opportunities through H-1B. Furthermore, similar to Chinese parents, many Indian parents want to give their children the best educational opportunities and see the EB-5 program as a fast track to admission to an American university.
Should I Speak to an Immigration Lawyer If I’m Interested in an EB-5 Visa?
If you are interested in an EB-5 investment as a pathway to American citizenship, it is important to recognize that the program may end or be subject to changes in the near future. Applicants must also recognize that Congress has yet to create a class of “grandfathered” applicants but may choose to do so in the future.
Despite the uncertainty, the only potential way to protect your ability to secure immigration benefits through EB-5 under the current rules is to make a protective filing. Hopefully, Congress should certainly recognize and address the fundamental unfairness and contradictory message it would send if people who followed the law and dutifully waited for a visa slot were barred from this immigration process. The Tampa EB-5 investor visa lawyers of Colombo & Hurd can help you assess and meet the situation you face confidentially and strategically. To schedule a confidential consultation, call our Miami or Orlando law offices at 305-692-0232 or contact us online.