POSTED IN CONSULAR ISSUES
Since September 30, 2015
Congress has considered several immigration bills that would have completely
overhauled the EB-5 program. All of us in the space, especially attorneys, had
prepared ourselves for the inevitable change of the current EB-5 regulations.
We all knew that the minimum capital threshold requirement would increase to
$800,000. In addition, the targeted employment area (“TEA”) definition would
change, thereby eliminating important metropolitan areas such as New York City
from consideration. All of this was occurring against the backdrop of Congress
trying to pass the appropriations bill so that our government would not run out
of money.
Congress has been wanting to
revamp the EB-5 program for a significant period of time. All of the recently
introduced EB-5 bills contained measures to increase compliance and make the
program safer for foreign investors that were seeking a “Green Card”.
Developers and attorneys lobbied for reform that would not be onerous and would
provide a certain amount of compliance. Most of us did not want the new
legislation to be the “death knell” of the EB-5 program.
Well, we all got our wish.
Congress voted to renew the EB-5 program in its present state until September 30,
2016. What will happen between now and the expiration of the legislation
is anyone’s guess. But I think the writing is on the wall. Congress seeks
to reform the EB-5 program on two fronts. The first is the minimum investment
capital threshold requirement. It is a foregone conclusion that prior to
September 30, 2016 Congress will pass EB-5 legislation that increases the
minimum investment in a targeted employment area (“TEA”) to $800,000. The
second is on the compliance front. Congress will include provisions in the new
bill that require “on-site audits” of projects and regional centers. In
addition, Congress will require all principals that have equity in a regional
center to submit to a Federal background check. This will ensure that the
players in the EB-5 space are not unscrupulous characters.
All in all, the changes would
be welcome by most in the industry. The impact that the higher investment
amount would have in China and other markets is something that is yet to
be seen. All of us though are breathing a sigh of relief for the EB-5
extension.
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