The EB-5 Immigrant Investor Program was created in 1990 and continued pretty much unchanged for close to three decades, except for the introduction of the Regional Centre pilot program in 1992.
And now, between 2019 and 2021, the program has seen an 80 percent increase in minimum investments followed by the unanticipated lapse of the popular Regional Centre program followed by a reversal of the investment hike.
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As things stand, EB-5 investors can qualify for the US green card by investing just $500,000 in a Targeted Employment Area, but without the option of pooling their funds into a Regional Centre project.
Golden visa investors across the world are wary of sudden policy changes and even warier of policy flip flops and uncertainties. That investors have not simply abandoned the EB-5 visa is testament to the popularity of the US as an immigration destination.
No Regional Centre and No Investment Hike
Before it was allowed to lapse, just one out of every ten EB-5 investors chose the direct route over the Regional Centre program.
There have been more than 20 extensions since 1992, which is why investors never really considered a scenario where the RC program would simply end.
With no real progress on the reauthorization of the program that expired on June 30, investors have begun to acknowledge the need for strategies that go beyond simply hoping that status quo will be restored.
One important development that has softened the blow is the court-ordered stay on the EB-5 Modernization Rule. Any investor prepared to explore the direct investment route can, at least in theory, qualify for lawful permanent residence by investing just $500,000.
Indian investors may have reason to cheer because the bulk of Indian demand for the EB-5 visa comes from H-1B visa holders seeking a faster route to the green card compared to the decade-long waiting periods under the EB-1, EB-2, and EB-3 programs.
Active participation in management is mandatory under the direct route but that doesn’t mean investors cannot work with professionals.
Whether the EB-5 investor continues to actively manage the business through a CEO or not is a grey area and a shrewd investor may end up transferring the more onerous aspects of managing the EB-5 business without falling foul of the rules.
Investors are likely to insist on the most liberal and relaxed interpretation of the ‘active management’ requirement and authorities may be open to accepting that to avoid the worst-case scenario of withdrawal of foreign capital and loss of thousands of jobs.
There’s no doubt reauthorization of the Regional Centre program would be the best-case scenario that most EB-5 investors would prefer.
With lower investment requirements, states regaining the power to designate TEAs, and no real urgency on the part of the government to reinstate the Modernization Rule, it’s safe to say that the EB-5 option is still a smart choice for investment immigrants.General Information: Contact us to receive more information about this article.
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