EB-5 Program – “Immigrant Investor” Program
What is the EB-5 Program?
- EB-5 is a program enacted in 1990 that gives foreign investors the opportunity to qualify for a Green Card with a $500,000 investment in a “Regional Center” Project. Immigrant investors who acquire a Green Card would then be granted US residency.
- A “Regional Center” is a legal entity, organization, or municipal or state agency that has been designated by the US Citizenship and Immigration Services (USCIS) as a Regional Center and has a focus on promoting economic growth and job creation.
- If a non-US citizen invests $500,000 into a regional center project, the regional center is obligated to create 10 or more jobs in the local economy in order for the investor to be granted a visa.
- There is currently a limit of 10,000 visas to be granted each year.
What has EB-5 accomplished in the past 15 years?
- Although the numbers are up for debate, estimates show that the EB-5 program has brought in more than $4 billion in investments and supported the creation of more than 77,000 jobs.
- New York City’s Hudson Yards project was able to raise $600M using a ‘cash-for-visa’ deal business structure.
- Washington DC’s Uline Arena, which is being converted into an office and retail center, has been funded by EB-5 money. This has been instrumental in rejuvenating the entire area.
- EB-5 money helped transform a closed Navy yard in Philadelphia into an active multi-use development housing 130 companies and 10,000 employees.
- The program is popular among Chinese investors who account for around 90% of all EB-5 visas granted and helps fuel big developers in the US.
EB-5 Update:
- There are some concerns with the program such as:
– EB-5 money is being spent on projects in wealthy areas and not enough in low economic areas.
There is not enough regulation around the program, which creates a greater risk for fraud.
– The future of the program was up for review by Congress and was set to expire on December 11, 2015. After discussions, the program got a five-day extension until December 16, 2015. Proposed changes to the program included increasing the price for US residency to anywhere between $800K and $1.2M and preserving 2,000 of the visas for rural investors. - After much debate, Congress has resolved to continue the program unchanged for another year.
As the program stays alive, big developers can move forward with projects they put on hold and foreign investors will continue to have the opportunity to obtain US residency by investing $500,000 into a Regional Center.
To ensure compliance with U.S. Treasury rules, unless expressly stated otherwise, any U.S. tax advice contained in this communication is not intended or written to be used, and cannot be used, by the recipient for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code.
