Uncertainty surrounding the future of the US EB-5 investment immigration program is forcing developers to hedge their bets by considering other streams of funding for their projects.
The popular visa generated close to $5 billion in investment in 2015, with the regeneration of some of the biggest cities in the US done with the help of the funds.
But with no decision yet on the future of the controversial program, developers are concerned they will lose a major source of cash flow.
The US government is thought to be considering either scrapping the program or raising the investment threshold, currently between $500,000 and $1 million depending on the type of project.
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, or regional centre.
- Within two years of admission as a permanent resident, the investor must create or preserve at least 10 full-time, direct or indirect jobs belonging to qualified US workers.
Recently it was highlighted that Chinese immigrants are asking to put children as primary candidates on their applications over fears they may exceed the dependent age of 21 by the time approval comes around.
Meanwhile, Indian nationals with aspirations of living in the US are being told the EB-5 visa is the most realistic way of achieving their dream.
Downtown Dallas has been rebuilt and regenerated using EB-5 funds.
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.
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.
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.
- EB-5 the Quickest Way to a US Green Card, for Indian Nationals
- Dallas Mayor Calls for Expansion of EB-5 Program
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