The EB-5 Visa is a pathway to a Green Card for foreign nationals investing in a U.S. business. The EB-5 program, founded in 1990, has induced considerable investment in the U.S. economy over the past three decades. With his or her spouse and unmarried children under the age of 21, a successful investor can enjoy lawful permanent resident status in the United States and may also be eligible for citizenship at a later date.
EB-5 Visa Requirements
USCIS requirements for EB-5 Visa applicants include investing a minimum amount of $900,000 or $1.8 million. Specifically, the investment must equal at least $900,000 in targeted employment areas (TEAs) and $1.8 million elsewhere. In addition, the investment must create or preserve at least ten full-time jobs in the United States within two years.
USCIS reserves about 10,000 Visas for EB-5 applicants each year. The vast majority of all EB-5 Visa approvals work through investments in EB-5 regional centers and U.S. public or private economic units. About 80% of EB-5 investors come from East Asian countries and the United Kingdom.
EB-5 Program Mismanagement
Unfortunately, in many cases, unscrupulous individuals have abused the EB-5 program for personal gain. Scams have included misleading or false EB-5 advertisements, misuse and theft of investor funds, and improper solicitation of investors.
In some cases, EB-5 applicants have been victims of a breach of contract and did not receive their promised Green Cards after investing large sums through regional centers.
To combat EB-5 fraud, the Securities and Exchange Commission (SEC) has launched its Whistleblower Program, allowing individuals to receive awards for intercepting fraudulent EB-5 schemes. USCIS has been widely criticized for its lack of adequate regulation and transparency.
EB-5 Reform & Integrity Act
In 2019 and again in 2021, Senators Chuck Grassley and Patrick Leahy have introduced the EB-5 Reform and Integrity Act, a legislative move aimed at reforming the federal government’s EB-5 program. The new law aims to update the rules and regulations for Green Card approval and to eradicate the misappropriation of investor funds through regional centers.
According to Senator Grassley, the EB-5 program is off target. Although the original intent of the program had been to promote investment in economically disadvantaged areas and rural regions, in many cases, investments have gone to already developed areas that promise higher returns.
In September 2019, Senators Grassley and Leahy first introduced the EB-5 Reform and Integrity Act to combat abuse of the EB-5 program. The law proposed:
- Extend the EB-5 regional center program for an additional five years.
- Grant Department of Homeland Security (DHS) broader authority to deny applications due to fraud and other abuses of the program
- Requiring investors and regional centers to contribute to a DHS-regulated fund that would investigate fraud offenses and conduct audits
- Establishing mandatory background checks for EB-5 applicants and regional center directors
- Provide applicants with more extensive disclosure information on risks, implications and any conflicts of interest.
- Provide clearer and more precise requirements for expected job creation.
- Reduce request processing times
- Demand U.S. ownership of all regional centers.
- The main objective of the bill was to increase the flow of foreign investment to impoverished areas, with a view to boosting the economy and reducing unemployment.
In 2021, Senators Grassley and Leahy reintroduced the proposed EB-5 Reform and Integrity Act, with some updates and technical changes. The amendments covered the handling of regional center bankruptcies, direct construction work, and securities law compliance.
What The EB-5 Reform & Comprehensiveness Act Means For Investors
Despite some criticism of the restrictions that the reformed law would impose, the new EB-5 legislation is generally good news for foreign investors. It would mean relicensing regional centers for the next five years, greater accountability of regional centers to applicants, and stronger protection for investors who unknowingly become involved in a fraudulent act.
In addition, the reform would include indirect and induced employment in the calculation of full-time jobs created, making this program requirement easier to achieve.
Suppose you have a specific concern regarding your EB-5 Visa application under the EB-5 Reform and Integrity Act. In that case, we recommend contacting an attorney for immigration status, Visa application, and permanent residency questions about your case.
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The information in this blog post is provided for general informational purposes only and may not reflect the current law in your jurisdiction. No information in this post should be construed as legal advice from the individual author or law firm, nor is it intended to be a substitute for legal advice on any subject. No reader of this post should act or refrain from acting upon any information included in or accessible through this post without seeking appropriate legal or other professional advice on the particular facts and circumstances at issue from an attorney licensed in the recipient’s state, country or other appropriate licensing jurisdiction.