The EB-5 Regional Center Pilot Program is where more than 90 percent of investments fall into. Investors can bring in smaller investments into more substantial projects that are in a targeted employment area (TEA). The benefit of lower investment allows all direct, indirect, and induced jobs created to count toward the 10-job program requirement. It's unclear how Congress is moving forward in the program, as there are concerns about how it's being used from both politicians and the general public.
Why would businesses and developers use EB-5 investments?
The simplest way to explain it is that they use the investments to get project financing at a lower rate than with bank and lenders. There's typically a 12 to 18 percent interest charge but with EB-5 its only 0.5 to 4 percent. The main goal for investments is to secure permanent residency in the U.S. for both them and families.
Is the source of funds used for the EB-5 investment important?
In Buchanan, they help foreign investors demonstrate to the U.S. government that the money they inquire for an EB-5 investment is lawfully sourced. Regional centers can't guarantee that finances won't return as it's at risk for the foreign national. Redemption agreements are not allowed.
What does Washington think about the EB-5 program?
Politicians do have some issues, but both parties are calling for some changes to the program. A repeal of the program was introduced back in 2017, but had zero cosponsors and wasn't a threat. Senator Feinstein and Grassley called for a bipartisan repeal and redistributed 10,000 annual EB-5 visas among other programs. The bill is being watched and will go through the Senate Judiciary Committee.
What changes are on the horizon for the EB-5 program?
The Office of Management and Budget (OMB) completed review and publication of the final rule. The text hasn't been released, so no one in the general public knows how it'll look. In the proposal, the investment amount will increase, and the Department of Homeland Security could look at those amounts every five years and decide if they should be raise. Now, how the exact Final Rule will look is unclear. However, what is clear is the EB-5 program creates jobs and adds billions of dollars to the U.S. economy.
Will there be changes as to how many visas are available per year for the EB-5 program across the globe?
There are 10,000 visas available, but it doesn't mean that are not 10,000 investor slots available. The Fairness for High-Skilled Immigrants Act of 2019 passed on July 10 in the House. If enacted, it would eliminate the per-country limit for all employment-based immigrants. As of right now, no country can take more than 7. percent of the 10,000 unless there are leftover slots in the worldwide category. If the bill were to pass the Senate and signed into law, it would likely lead to investors primarily from China and India. But more research has been done to show that South Africa and South Korea are also rising for capturing those visas too.