For more than a year, the fate of the EB-5 Immigrant Investor Program has been up in the air. Foreign investors, as well as attorneys, builders, and others involved with EB-5 funded projects, have seen the program receive two previous extensions. Earlier this week, the program received its third extension in 18 months.
Congress passed a Continuing Resolution (CR) to keep the government and associated programs funded through April 28, 2017. Including in the CR was an extension of the EB-5 program. No changes were made to the program, although lawmakers had considered several possibilities.
The EB-5 Immigrant Investor Program allows those living in other countries to obtain a U.S. visa by investing a minimum of $500,000 into a new business venture that must create or preserve at least 10 full-time jobs for U.S. workers.
As with the previous renewals, there were discussions on what should be done to address the issues that have been brought up with EB-5. In recent years, there have been many reports of fraud, and lawmakers looked at ways to provide more oversight to the program to prevent future cases of fraud.
Additionally, legislators were also considering raising the minimum investment amount from $500,000 to $800,000. Targeted Employment Areas (TEA) were examined as well. TEAs are areas where EB-5 money would be most beneficial, such as economically challenged parts of major cities. The idea was that EB-5 investors would invest in these areas with lower minimum investments. However, loopholes in the language of the law allowed funds to be invested in areas that were doing well financially, meaning the money could be spent on luxury apartment buildings and other projects that could be more profitable.
The latest extension allows for President-elect Donald Trump and the new Republican-controlled Congress to have time to take office and put forth their own ideas for the government’s spending plans as well as decide the future of the EB-5 program. We will continue following this story and have more as it develops over the next four months.
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