Downtown Dallas has been rebuilt and regenerated using funds from the EB-5 investment visa program, work that would otherwise never have been completed, according to the city’s mayor.
Mike Rawlings wants to see the program extended and expanded come September, believing America’s urban areas are now reliant on the billions of dollars invested by mainly-Chinese applicants.
In Dallas, the $500 million raised by Civitas EB-5 Capital has been spent on new offices, hotels and apartment buildings both downtown and in the nearby area.
EB-5: Investment requirements
- An EB-5 investor must invest in a new commercial enterprise.
- The investor must invest at least $1 million when investing in a general area of business or at least $500,000 when investing in a targeted employment area (“Regional Centers”).
- Within two years of admission as a Conditional Permanent Resident, the investor must create or preserve at least 10 full-time, direct or indirect jobs belonging to qualified US workers.
- See Tax Implications of Gaining Permanent Residence Through US EB-5 Visa
Rawlings believe the money has helped keep Dallas current and competitive as a modern city from a global viewpoint.
The city is also at the forefront of the US economic recovery, with its metro area leading alongside New York in terms of job creation.
Now Rawlings is co-sponsoring a resolution that the program not only be expanded when it expires in September, but that the visa capacity in increased.
Quotas mean current waiting times can be up to six years from submitting an application to receiving permanent residency, known in the US as a ‘green card’.
The delay means Chinese investors want to name their children as primary applicants over fears they will be too old when their cases are processed.
EB-5 has its critics in the US, including those who say too much of the investment is going to projects in affluent areas that could already afford the funding.
Others oppose it on more fundamental terms, saying green cards should not be for sale.
There have also been a number of fraud cases linked to the investment program.
Fraud Cases Linked to EB-5
- The developer behind a biomedical research facility in Vermont, which benefitted from EB-5 funding, is currently being investigated for misusing the money. The project had attracted $83 million of investment from 166 foreigners, many of them Chinese, who now risk losing their money. Developer Ariel Quiros, and several of his associates, stand accused of using the funding to buy a ski resort, a luxury New York condo and to pay tax bills.
- Developer Lobsang Dargey was accused of defrauding Chinese investors out of money for a tower in Belltown. Dargey no longer has control of the project and denies any wrongdoing.
- American Life, a recipient of more than $1 billion in EB-5 investment money, was fined $1.2 million for facilitating payments to unlicensed intermediaries in the USA.
Rawlings says the Dallas investment has been done completely lawfully.
His resolution does not rule out changes to the program. It asks that any changes meet certain conditions.
EB-5 Expansion Conditions
- Maintain the ability to deliver job-creating capital to urban areas
- Includes permanent authorization of the regional centre program (currently a pilot)
- Avoids retroactive application of new law on matters already filed
- Allows for economic impact models to be used in measuring job creation
- Improves processing systems to address backlogged petitions, streamlines approvals for all applications
- Enhances program integrity measures through improved reporting requirements and oversight that is not unduly burdensome.
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