Long-term EB-5 Visa Reforms are Proposed by a New Bill
On 18th March, senior democrat and republican senators introduced a bill seeking long-term reform and reauthorization of the EB-5 Visa Regional Centre Program. This visa allows foreign nationals who can invest at least $1.8 million or $900,000 in a new commercial U.S. enterprise located in a High-Employment Area or Targeted Employment Area, respectively, and create jobs for ten or more U.S. workers, to apply for permanent residence.
It is a prevalent U.S. Green Card pathway among Indian investors. Between 2016 and 2019, the demand for this visa among Indians has risen by 400%. As per USCIS data, in the financial year 2020, Indians were issued more than 300 EB-5 visas – second only to the Chinese. The direct EB-5 Program is permanently authorized. The new bill – EB-5 Reform and Integrity Act (2021) – proposes several changes to the EB-5 Regional Centre Program over five years.
The Regional Centre Program is the immigration pathway used by roughly 90% of investors. An EB-5 Regional Centre is a private or public unit in the USA that promotes economic growth and is designated to participate in the EB-5 Immigrant Investor program by overseeing the EB-5 business projects. The bill proposes the following changes to the Investor Visa USA:
- The Program will get an extension till 2026.
- Regional Centres must establish policies and procedures to prevent fraud.
- Regional Centres must share the proposed EB-5 business plans (including documents and marketing materials) with the Department of Homeland Security (DHS).
- Investors must receive more information about conflicts of interest and material business risks involved in EB-5 projects.
- The DHS must approve business plans for subsequent investors under the same EB-5 project unless there is proof of misrepresentation, fraud, or material change.
- The definition of ‘created jobs’ will be strengthened to ensure that statistics of job creation are validated and jobs created are new – not relocated or expected to be completed through the purchase of bonds that are publicly available.
- Regional Centres must notify the DHS of significant structural changes.
- The DHS must audit Regional Centres every five years.
- The DHS must conduct site visits for EB-5 projects.
- Regional Centres must provide annual statements to the DHS and investors to certify compliance with the program requirements and account for investor capital.
- Regional Centres, as well as certain project principals, will have to undergo background checks.
- Certain Regional Centre principals responsible for overseeing foreign investors’ participation in the visa program must be lawful permanent residents or U.S. persons.
- S. securities laws govern EB-5 project offerings. Regional Centres must make commercially feasible efforts to comply with securities laws.
- An EB-5 Integrity Fund will form. Investors and Regional Centres must pay fees into the Fund, which the DHS will utilize to conduct site visits and audits –to identify and investigate fraud within and outside the USA.
- Foreign agents and overseas third-party EB-5 program promoters must register with the DHS and follow the guidelines to comply with the law and represent the visa process.
- The DHS will be strengthened to assess foreign investor capital (including capital loaned or gifted to the investor) and ensure its lawful source.
- Defrauded Good-faith investors will be allowed to continue their participation in the Program – provided they were not involved in the fraud, associate in good standing with the EB-5 entities, and meet all program requirements.
- The DHS will be given additional authority to revoke application approval in criminal misuse, fraud, or national security or public safety threat.
- Investors and petitioners will receive an administrative appellate review of certain adjudications and decisions of the DHS.
- Investor capital must be maintained in U.S. banks, in non-comingled accounts, to prevent misuse of these funds.
- EB-5 projects must commission an annual audit through an independent party, or use a fund administrator, to prevent misuse of the investors’ funds.
- Integrity measures will come into effect 90 days after the enactment of the proposed bill.
These changes will ease doubts among Indian investors regarding this visa’s cancellation, one of the most direct pathways to permanent resident status and eventual citizenship in the USA. Since this Program has drawn in capital investment exceeding $41 billion and created 820,000 jobs for U.S. workers, it is not likely to be discontinued.
During the transition period, the Regional Centre Program may be temporarily shut, but direct EB-5 visa applications will continue to process. To check your eligibility for this Program, prepare a viable business plan and other documents, and submit a robust application through India’s most seasoned investment immigration consultants, call 8595338595
