Another Extension Forecast for EB-5
usa program |
regional centers |
EB-5 Extension |
June 15, 2016
In 2015, the US EB-5 program was set to reform legislation but instead, a decision was made to extend the program without any changes until September 2016. The program extension was due in part to disagreements between parties on increasing the investment amount as well as determining what exactly defines a Targeted Employment Area (TEA). What was initially intended for high unemployment and rural areas quickly became distorted into luxury towers in prosperous areas that claimed to be connected to impoverished zones.
Applicants electing to invest in a Regional Center in a targeted employment area get to benefit by investing only US$500,000 compared to the US$1,000,000 investment in a new commercial enterprise. Many high-end projects, however, were abusing the definition of a Regional Business in order to draw in investors’ funds.
Whether or not a reform will happen this year is still a big debate. Hearings on the EB-5 reform are being held requesting opinions from those in the EB-5 industry as to what they would like to see from the program in the future.
The hearing “The Distortion of EB-5 Targeted Employment Areas: Time to End the Abuse” was held on April 13th. The Executive Director of a non-profit association that represents individuals of the EB-5 industry, Peter Joseph, was among the parties present at the hearing. He made several recommendations as to reforms that should be considered for EB-5 legislation, including:
- Increasing the number of visas allocated per year in order to increase the economic benefit of EB-5 as well as to help eliminate the backlog of investors currently in the system.
- Establishing a system that allows for predictable processing times of EB-5 application.
- Avoiding applying the reformed legislation to investors who have already filed their EB-5 petitions. In other words, not to allow retroactive application of the new law. This will serve to protect the already existing applicants and their family members who have already made commitments and spent funds and time preparing their applications.
- Improvement of program integrity by increasing the reporting requirements of Regional Centers.
- Clarifying definitions of all EB-5 conditions and requirements to allow consistent adjudication of EB-5 petitions.
Most individuals in the EB-5 space agree with the recommendations put forth by Joseph. The US EB-5 program continues to be a success by attracting a lot of capital from investors abroad and by creating jobs for thousands of US residents and citizens each year. In 2015 alone, the capital contribution totalled close to $US 5 billion.
As it is currently a Presidential election year in the USA, some members of the EB-5 community now believe that Congress will not take action on reforming the current EB-5 legislation this year, repeating last year’s extension. Others are of the opinion that due to common cases of distortion by Regional Centers, Congress will have no choice but to reform. It’s really anyone’s guess at this point and as such, investors are encouraged not to delay submitting their applications.
Aside from obtaining the much sought-after American green card
, some other program benefits include:
- Inclusion of immediate family in one application including spouse and children under 21 years old (whereas other equivalent programs require children to be under the age of 19);
- No prior business experience required;
- No minimum level of education or language competency required;
- Creation of jobs for Regional Center investments can include both direct and indirect employment;
- Ability to work, study, or live anywhere in the US once green card is obtained.
Economic benefits of the EB-5 program for the USA are significant, as are the benefits to the investor and family. Time to take the opportunity of applying under the EB-5 program today, before any changes are implemented.
To learn more about the US EB-5 program, please click here
Please fill out our Free Assessment
to find out if you qualify for any of the programs offered.
Permanent Residency through Investment in the USA (EB-5)