Editor’s note: This sponsored article was contributed by attorney Charles Kuck as part of Kuck Baxter Immigration’s annual partnership with Global Atlanta.
After leaving foreign investors hanging for eight months, Congress has finally passed substantial changes to the EB-5 Immigrant Investor Visa Program that allows foreign individuals who invest at least $1 million and create at least 10 jobs in the United States to receive legal permanent resident status. This is a useful program that creates jobs for Americans at no cost to the U.S. government.
On March 11, Congress passed the Omnibus spending bill, which includes the “EB-5 Reform and Integrity Act.” This act strengthens reporting requirements and oversight for what are called Regional Centers.
Regional centers are typically private, for-profit entities that connect foreign investors with real estate developers looking for funding for projects. Centers are approved by the U.S. Citizenship and Immigration Service (USCIS).
As of October 2021, there were 632 approved regional centers in the U.S. and 25 in Georgia.
The new act also has provisions that protect against fraud and go after unscrupulous investment agents who were sources of misinformation in the past. It also raises the minimum investment threshold to $1,050,000 from $1 million or $800,000 in Target Employment Areas (TEAs, see below), up from a prior minimum of $500,000.
Some 10,000 EB-5 visas are issued each year, and a certain percentage of those are reserved for regional centers. Originally, the EB-5 program was only for individual investors making direct investments, but finding the right opportunities and investing $1 million to create 10 jobs is not easy; investing through regional centers is a safer bet for most investors.
EB-5 investors are not oligarchs; they are typically middle-class people from China, India, Vietnam, South Korea, Taiwan, Brazil, the United Kingdom or elsewhere who need a safe place for their money. For example, many Chinese investors made their wealth in the Chinese real estate market and need a safe harbor to protect their assets from the Chinese government.
Interestingly, in the 1990s when the EB-5 program was created, some investors were looking for places to invest their illegally earned money. Subsequent reforms addressed that issue. Then, rapid wealth creation in Asia led to unregistered and unmonitored “agents” and “recruiters” in China and elsewhere who encouraged individuals to get into investments that were both high risk and little reward.
The reformed EB-5 program, however, is now a more secure and certainly legitimate way for both investors and communities in the U.S. to benefit.
The EB-5 program is useful to local economies on a micro level, as it can bring direct foreign investment to a town or city. These total investments involve potentially billions of dollars, yet, because the investments are spread all across the U.S., the impact nationwide is relatively minimal. But, if a community attracts one of these investments, it can be significant for the local area.
Eligible development or infrastructure projects must involve either Targeted Employment Area (TEA) designated locations (such designations are now done exclusively by USCIS), rural communities or distressed urban areas.
Even though investors under the previous program are grandfathered in and their protections are supposed to go back into effect when the bill was passed, the USCIS has publicly stated that it is not adjudicating cases for 60 days. We are about to file a law suit in federal court with a number of investors who are demanding their cases be adjudicated immediately (most have been pending for almost five years).
Regardless of this unforced error by the Biden Administration, the EB-5 program is both a necessary and important part of a modern immigration system and has been sorely missed. Now it is back, and we hope it will work better than ever. Unless U.S. immigration somehow manages to mess it up again…
Contact Kuck Baxter Immigration at (404) 816-8611.