The EB-5 visa is a pathway to a green card for foreign citizens who invest in a U.S. business. The EB-5 program, established in 1990, has induced considerable investment in the U.S. economy over the past three decades. With their spouse and unmarried children under 21, a successful investor may enjoy the status of legal permanent resident in the United States and may also become eligible for citizenship later on.
EB-5 Visa Requirements
USCIS requirements for EB-5 visa applicants include investing a minimum amount of either $900,000 or $1.8 million. Specifically, the investment must equal at least $900,000 in TEA (targeted employment areas) and $1.8 elsewhere. Furthermore, the investment must create or preserve at least ten full-time jobs in the U.S. within two years.
USCIS reserves around 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 public or private U.S. economic units. About 80% of EB-5 investors come from East Asian countries and the U.K.
EB-5 Program Mismanagement
Unfortunately, in many instances, 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 investor solicitation.
In some cases, EB-5 applicants have fallen victim to a breach of contract and did not receive their promised green cards after having invested large sums through regional centers.
To battle EB-5 scamming, SEC (Securities and Exchange Commission) has launched its Whistleblower Program, allowing individuals to receive awards for intercepting EB-5 fraudulent schemes. USCIS has received extensive criticism for its lack of proper regulation and transparency.
EB-5 Reform and Integrity Act
In 2019 and once more, in 2021, senators Chuck Grassley and Patrick Leahy have introduced the EB-5 Reform and Integrity Act, a legislation move meant to reform the EB-5 federal government program. The new Act aims to update the rules and regulations for green card approval and stamp out misappropriation of investor funds through regional centers.
According to Senator Grassley, the EB-5 program has gone off target. Although the program’s original intent had been to promote investment in economically disadvantaged areas and rural regions, in many cases, investments have flown into already-developed areas that would promise a higher ROI.
In September 2019, senators Grassley and Leahy first introduced the EB-5 Reform and Integrity Act to battle the abuse of the EB-5 program. The Act proposed to:
- Extend the EB-5 regional center program for five more years
- Grant DHS (Department of Homeland Security) broader authority to decline applications due to fraud and other abuse of the program
- Require investors and regional centers to contribute to a DHS-regulated fund that would investigate fraud offenses and perform audits
- Establish compulsory background checks for EB-5 program applicants and regional center principals
- Offer applicants broader disclosure information regarding risks, implications, and any conflict of interest
- Provide clearer, more accurate requirements of expected job creation
- Reduce petition processing times
- Mandate U.S. ownership of all regional centers
The bill’s primary purpose was increasing foreign investment flow to impoverished areas, with a view of boosting the economy and reducing unemployment.
In 2021, Senators Grassley and Leahy re-introduced the proposed EB-5 Reform and Integrity Act, with some technical updates and changes. The amendments covered handling of regional center bankruptcies, direct construction jobs, and securities law compliance.
What the EB-5 Reform and Integrity Act Means for Investors
Despite some criticism of the restrictions the reformed act would impose, the new EB-5 legislation is generally good news for foreign investors. It would mean re-authorizing regional centers for the next five years, higher accountability on the part of regional centers to applicants, and more robust protection for investors who unwittingly find themselves embroiled in a fraudulent act.
Furthermore, the reform would include indirect and induced employment in the calculation of created full-time jobs, making this program requirement easier to achieve.
Suppose you have any specific concerns regarding your EB-5 visa application under the EB-5 Reform and Integrity Act. In that case, we recommend reaching out to a lawyer for immigration status, visa application, and permanent residency questions about your case.
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