It is my pleasure to announce that on September 28, 2016, the EB-5 regional center project program has been extended without any changes until December 9, 2016. Every two years, Congress has to re-evaluate and decide if they want to extend the pilot program that has been in place since early 1990.
There has been a lot of proposals throughout the years to make the EB-5 regional center projects’ program permanent, but Congress has not touched the original regulation since its inception. The program is now in its 24th year and currently has 1,234 regional centers participating. The program has created millions of jobs, as well as allowing thousands of international investors to move, to live, and work in the United States.
Following the presidential election, Congress is expected to consider a variety of reforms to the program. It is expected that lawmakers will enact the reforms agreed upon in the December meetings. The EB-5 program was initially created to stimulate growth for the United States economy through capital investments by foreign investors. It also stood as a way to create more jobs. The immigrant investor program was created in 1992 which set aside the EB-5 visas for participants who invest in commercial endeavors.
Immigration is big news in the United States. Whether it is a wave of skilled workers, the poor, or children at our borders, everyone has an opinion. But, EB-5 does not address these issues. EB-5 visas require the person seeking the visa invest half-a-million dollars in business that will create at least ten new jobs in an area that has a high unemployment rate. Many big names endorsed the program in an open-ended article in the New York Times. Financial experts Bill Gates, Warren Buffett and Sheldon Adelson praise EB-5 as a win-win situation.
Challenges The EB-5 Program Has Faced
There have been challenges before with fraudulent projects or misuse of funds by the same regional center principals and it now takes more than 24 months to actually receive the decision for filed I-526s due to prolonged processing times. Other countries, such as Canada provided programs that simply lent the investors’ money to open businesses, which is paid back over time to the government.
The EB-5 program required an “at risk” investment. But by 2008, the economy was suffering, and banks and other lenders were being very cautious with their lending processes. This was the avenue EB-5 needed. EB-5 was easy money. The regulations stated that those who were given visas under EB-5 had to show that they had hired and employed ten, full-time employees. They have a two-year window before the proof was required. Not meeting the stipulation meant the visa holder and their families could be deported.
But all in all, this program is very beneficial to the U.S. economy, as it allows new large projects and startup programs to have financing that would not be available to obtain through conventional banking systems. This creates a lot of jobs for U.S. workers and allows investors to relocate their families and their future to the United States.