What Is The Current EB-5 Visa Program For Investors?

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There have been a lot of possible new bills that would raise the minimum investment amount from $900,000 to 800,000, and then there is another million dollar category. The bill was about 40 pages.

The regional center bill ended September 30th, and after two extensions by the Senate and the House, it was extended for another week and then finally further extended by almost 6 weeks to 11 December, but then no one could agree on a number of the major terms of the bill.

The Senate and the House took the easy way out and just extended the current law, which states that the investor would have to invest $900,000 in a rural or high unemployment area and a million dollars in a non high unemployment area. The law basically stayed the same, and it will stay the same until 30 September of 2016. It was really almost like a 10-month extension to 30 September 2016.

There are two thoughts regarding this situation. The first is that this would be the last chance for people to be able to invest $900,000 because there would definitely be a change regarding the minimum investment, at the latest on or before 30 September.

The other thought is that changes would be made to parts of the bill even as we speak, although as of right now it is the same as it was.

What Are The Proposed Changes Or Bills That Could Change The EB-5 Visa Form In The U.S?

The new change is called Senate Bill 2415, and that is called the Integrity legislation. It was more or less part of the bill that was being discussed in September, October and November. This was part of the whole bill, but it did not make it into the extension part.

The integrity part includes points that regional centers would have to disclose what their agents were making. In other words, every regional center investment would include the minimum of $900,000 of course, and then they would all have add-ons of administrative and acquisition fees. The minimum is probably an extra $40,000 to $60,000, so there would be a wide range of administrative fee add-ons.

Those administrative fees would generally go toward paying agents in China or wherever for sourcing out investors, but they would primarily be in China. No agent would want a client or an investor to know how much they were getting, but that would be part of this Integrity provision or Integrity legislation.

The possibility is that if regional centers were paying the whole $60,000, $40,000 or $50,000, whatever their administrative fee was, then some might even want pieces of the deal. It has gotten to a point where being an agent is a big money maker, because they are the ones who have the investors and the regional centers need them. Although, this may bring the prices down because agents would not want to show that they were being overly greedy.

Some other provisions include conducting criminal background checks on individuals involved in the regional center. This is currently not being done unless the investor did their own investigation and they bar individuals or suspended or terminated regional centers based on program non-compliance, deny or revoke an immigrant visa petition based on fraud, establish an EB-5 Integrity fund because there will be extra filing fees, require thorough annual reporting and accounting for regional centers, and collecting evidence of assurance that funds are derived from legitimate and lawful sources, even though that is more or less done right now by the lawyers who prepare source of funds.

The whole idea of this Integrity legislation was to have the EB-5 be more transparent and not hide things, which is what was being done now. This piece of legislation was part of the overall legislation that has now been reintroduced.

Were These Changes Proposed To Create Some Transparency With EB-5 Program?

This is what is currently being brought up. A lot of changes were proposed, and there is one relating to how to determine a TEA and what someone could show in source of funding.

For example, in the past, people could receive gifts from an aunt or an uncle, or even a friend, although under the proposed law it would have to be a gift from a parent. They were trying to limit who the person could even get money from.

Leaving aside someone getting a gift, a number of other requirements were also very controversial, regarding where someone could even get a loan from. In other words, in the past, the person could get a loan if their parents had a lot of money and they wanted to get a gift from them for the $900,000 or $550,000, whereas now it would have to be from a bank, which is what they proposed in the legislation.

A lot of issues were very controversial so Congress just could not agree or even compromise, and they did not even have the time to do it, although they do have the time now so it is very possible that legislation besides this Integrity legislation would come up well before September 30th, although this is just the latest date.

For Now Does Everything Remain As Is, Including The Regional Centers?

Everything is as it was before this all came up. Instead of it expiring 30th September of 2015, it has been extended to 30 September 2015 and now to 2016. It is still subject to changes and Integrity change could be made by Spring.

For more information on The EB-5 Program, a free initial consultation is your next best step. Get the information and legal answers you’re seeking by calling (310) 477-3000 today.

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