Proposed Senate EB-5 Bill To Restrict Investor Funds Sources

The proposed Senate EB-5 Bill restricts the source of acceptable funds that an Investor can use to qualify.  Currently, EB-5 funds are allowed to derive from a gift and or loan, with little restrictions on who can gift or loan funds to the Investor.  The Bill, if passed in its current form, will restrict gifts so they must originate from the Investor’s spouse, parent, child, sibling or grandparent.   In addition, the proposed Bill restricts loans so that an Investor may only qualify if that loan is issued by a reputable and licensed bank or lending institution.  Currently, a large number of EB-5 investors are F-1 students who are not be able to support the minimum investment amount from their own assets.  Under current law, a wealthy family member or friend is able to either gift or loan the funds to the student so they could qualify for an EB-5 Green Card.  With the proposed Senate Bill, loans from these individuals will no longer qualify.  In addition, the gifts will have to derive from the narrow categories mentioned above.  Such proposed legislation, if passed, will certainly have an adverse effect on the number of Investors applying for the EB-5 Program and thus decrease the potential foreign investment and jobs infused into the U.S. economy.