The Future of the EB-5 Investor Program
Dated: February 19 th, 2019
Mr. Andrew Cuevas, Esq., is the President of Cuevas, Garcia & Torres, P.A., and Vantage Property Title Company. Cuevas, Garcia & Torres, P.A., provides legal services in the areas of Community Association Law, Corporate Law, Real Estate law, and Business Immigration, including title insurance services through Vantage Property Title Company. If you have any questions regarding this article or any other questions, you may contact Mr. Cuevas at (305) 461-9500 or via e-mail at [email protected].
This newsletter if being presented to give an update on the progress of the EB-5 visa program, the recent extension of the EB-5 program, and its future. Normally when we present our law firm newsletters there is usually a specific topic or law discussed, and we analyze issues to consider as it may apply in your cases. This newsletter however I believe falls under the heading of “legal gossip” as we speculate about the future of the EB-5 program. We only know what the future will be when it actually is behind us.
The EB-5 Regional Center program was renewed through September 30, 2019. However, there was not an increase in the number of visas available each fiscal year, so with the tremendous expansion of developers in the United States depending on EB-5 funds for their projects, there exists chances of delays/backlogs for regions that currently do not have delays. Those persons involved with EB-5 who are “pulling at the ears” of our politicians are hoping that there will be a permanent renewal of the EB-5 process that would significantly increase the number of visas available. It is anticipated that any renewal after September 30, 2019 will result in a higher minimum investment from $500,000 to perhaps $900,000 or even higher. Therefore, it is recommended that all the persons who are still considering proceeding with the EB-5 applications should do so as soon as possible – any delay might result in the minimum investment being raised by the time you get off the fence. There exists excellent EB-5 projects that investors should definitely consider if their goal is to obtain the United States Residency through an investment/loan to a qualified project.
Recommendations being submitted to Congressional leaders for future EB-5 permanent renewal include:
1) Fraud prevention through quick adjudication by experienced securities professionals from the Department of Commerce, Small Business Administration or utilization of a private company
2) Fraud prevention through posting approved EB-5 projects on the USCIS website
3) Making EB5 more politically popular by presenting it as a savior for both United States infrastructure and Puerto Rican redevelopment via set asides which go to the balance of the EB5 project categories each year that they are not used.
4) Phasing in the increase in minimum investment in order to maximize the money raised via the program – allowing the market demand to adjust. There are other nations with similar programs so the United States should stay competitive in its efforts to raise capital through foreign investment. One recommendation would be to increase the minimum investment by $100,000 starting this Oct 1, 2019 and then the succeeding years by additional $100,000 increments
5) Increase the number of visas available by:
a. Eliminating derivative visa usage which would effectively give us 10,000 visas a year. Currently for each EB-5 visa approval, the number of available visas are reduced not only by the approved beneficiary but also additional visas for each of his/her family members (derivative benefits)
b. A one-time infusion of visas reflecting the lost visas prior to 2012
c. Obtaining as many as 50,000 visas a year for all EB-5 investor visas. The additional visas could possibly obtained from the lottery visa allotment for which there are currently 50,000 available worldwide.
6) Leaving the Target Employment Area (TEA) definition alone, because an increase of the TEA minimum investment to as much as $900,000 pretty much phases out TEAs anyway; if we still want to direct visas to urban or rural areas, do that with set asides that roll over if not used.
This newsletter addresses some of the issues currently being discussed for management of currently EB-5 cases as well for potential future legislation. Once there are some permanent changes to the program, we will be sure to keep you informed.
This article is solely a partial explanation of all the issues related to the topic of this newsletter, and is not to be considered legal advice. Persons interested in obtaining more information on the EB-5 Visa Program should consult with their legal counsel to obtain explanations of all issues addressed herein.