Do you follow immigration news? If so, you’ve probably seen at least a few recent headlines about the EB-5 visa. First introduced in 1990, the EB-5 program is a unique immigration pathway that entices applicants to contribute to the US economy, offering foreign investors a Green Card if they invest at least $500,000 in a U.S. venture that creates American jobs.
Now, more than 25 years after its creation, the EB-5 has captured renewed attention from politicians and the public alike. In recent months, Congress has debated possible reforms to the program, generating increased speculation over its future. And with the Trump administration pushing major changes to a number of other visa pathways, many have asked if the EB-5 might be next.
With all this talk of reform and revision, it’s imperative to understand the changes that are on the table and how they might affect your immigration plans. Here is a rundown of some of the latest, most critical news on the EB-5.
- The EB-5 was just extended – for now.
The EB-5 program was slated to expire back in April, leaving would-be investors anxious over its long-term future. Lawmakers ultimately voted to extend the program in its current form, including it as a provision in an emergency funding bill intended to forestall a government shutdown. As a result, the EB-5 will remain in place through at least the end of September, which is when the stopgap spending bill expires.
- There’s talk of raising the minimum investment level.
In the meantime, members of Congress are negotiating an EB-5 reform package to include in the government’s next funding bill. Politicians from both sides of the aisle have suggested an array of potential changes, but one of the most common proposals involves raising the minimum investment required to qualify for EB-5 status.
Under the current framework, investors must contribute at least $500,000 to projects in rural areas or regions with high unemployment (known as “Targeted Employment Areas”). Meanwhile, urban developments require an investment of no less than $1 million. In contrast, Senators Patrick Leahy (D-Vermont) and Charles Grassley (R-Iowa) are floating a bill that would lift the minimum for rural projects to $800,000. Government agencies have also added their two cents. Back in January, the Department of Homeland Security released a report urging the government to raise the minimum for urban developments all the way to $1.8 million.
- Politicians want more investment in needy areas
As mentioned above, the EB-5 program currently allows individuals to make a smaller minimum investment for projects in so-called Targeted Employment Areas. Historically, these were defined as regions with high unemployment rates, and/or rural areas lacking in infrastructure.
However, politicians are concerned that many of these investments aren’t being made in the regions for which they’re intended. Because US immigration law doesn’t explicitly define the boundaries of these regions, developers and corporations are often able to draw the lines themselves, allowing them to locate their EB-5 projects in more desirable, affluent locations where they can get a higher return on investment.
“These areas were originally designed to include only rural, undeveloped locations, but now corporations are gerrymandering the TEA definitions to include expensive waterfront areas in big cities,” explains Jack Sung, immigration attorney and Partner at D’Alessio Law Group in Los Angeles. As a result, EB-5 money is often being used to fund luxury condos and other high-end projects, instead of benefitting struggling areas.
To address this issue, lawmakers like Grassley and Leahy have proposed that the government use more rigorous criteria to determine needy regions. Their bill would also set aside a number of EB-5 visas to be used specifically for rural communities.
- Trump has reasons for maintaining the EB-5
Despite his intense criticism of other visa programs, President Trump has largely stayed quiet on the EB-5. And analysts have suggested that his administration may have compelling incentives to revise the program, but not scrap it altogether.
To start, the EB-5’s stated purpose as a job creator dovetails closely with Trump’s promises to boost employment and amplify US growth. And even Trump’s vast business empire has directly benefitted from EB-5 investment, which might make him reluctant to dismantle the program. Just recently, Kushner Companies (the firm run by Trump’s son-in-law Jared Kushner) used EB-5 funds to finance a major real estate development outside New York City. And last month, Kushner’s sister Nicole Meyer made headlines when she pitched the EB-5 to audiences in China, promoting it as a pathway for investing in other Kushner-managed projects. Overall, these developments signal that the EB-5 is unlikely to disappear anytime soon.
Thinking about applying for an EB-5? If so, make sure you work with a savvy investment analyst. A good analyst will help you to perform your due diligence before making any potential investments, ensuring that you only place money into projects that are financially sound.
To start exploring your options from a legal standpoint, contact D’Alessio Law Group, a full-service immigration and corporate law firm based in Los Angeles. We’ll work with you through every step of the EB-5 process, guiding you on how to assemble a successful application, and ensuring you stay prepared for any policy changes that might occur down the road.
Daniel Gould
