Investors have had a positive start to 2016 after it was announced that the EB-5 investment visa programme for the United States has been renewed without change until 30 September 2016, writes Heather Landau.
The programme provides foreign nationals with an American green card for themselves and their families if they invest at least $500,000 in a Target Employment Area, while creating or preserving at least ten jobs for US citizens.
The last few months have seen a great deal of uncertainty surrounding the existence of the EB-5 visa. Designed to stimulate the US economy through foreign investment and the creation of jobs in low -income communities, many expected Congress to pass new legislation that would address a legal loophole that enabled some developers to expand the boundaries of building projects into more affluent areas.
In the months leading up to the scheduled Congressional action, many EB-5 applicants were concerned that the new provisions would result in multiple changes that would either make the EB-5 application more expensive, or discontinue the programme altogether.
Proposed amendments included increasing the minimum investment required from $500,000 to $800,000, imposing a $10,000 filing fee per investor and new monitoring responsibilities on the immigration service.
At the final hour on Wednesday 16 December, the proposal was rejected in favour of a simple extension until 30 September 2016. No other changes have been made to the programme.
The news has brought a rush of activity with both developers and investors attempting to get their projects and applications off the ground before the extension expires. With the 10,000 application limit reached by September of 2015, many experts believe that this year’s programme will reach capacity before May 2016.
With an investor’s family (typically spouse and children) being included in the 10,000 limit under the current rules, places are limited; and with China historically accounting for 70% of all visa applications, the EB-5 programme is likely to experience significant demand throughout January as applications are pushed through before the month-long celebrations of Chinese New Year on 8 February.
While many hope that the compromise that was ultimately rejected will be the adopted model after the EB-5 extension period expires, there are no assurances that this will be the case. The sooner investors start and close EB-5 financing deals, the fewer challenges they are likely to face.