For foreign citizens who engage in a U.S. firm, the EB-5 visa provides a route to get a green card. Over the last three decades, the EB-5 program, which was launched in 1990, has stimulated significant investment in the US economy. A successful investor may obtain legal permanent resident status in the United States with their spouse and unmarried children under the age of 21 and may eventually become eligible for citizenship. Let’s learn more about it and the Reform and Integrity Act.
Background: Requirements for EB-5 Visas
EB-5 visa applicants must invest a minimum of $900,000 or $1.8 million, according to USCIS criteria. In TEA (targeted employment areas), the investment must be at least $900,000, and $1.8 elsewhere. Furthermore, within two years, the investment must create or maintain at least ten full-time jobs in the United States.
Each year, the USCIS sets aside roughly 10,000 visas for EB-5 applicants. Investments in EB-5 regional centers and public or private U.S. economic entities account for the vast bulk of all EB-5 visa applications. Around 80% of EB-5 investors are from East Asian countries and the United Kingdom. Read further: Types of Visas for the USA
Why Was The EB-5 Program Reformed?
Unfortunately, many unscrupulous people have taken advantage of the EB-5 scheme for personal gain. Misleading or deceptive EB-5 marketing, misuse and theft of investor funds, and unethical investor solicitation are all examples of scams. After investing considerable sums through regional centers, several EB-5 applicants have been victims of a breach of contract and have not received their promised green cards.
To combat EB-5 fraud, the Securities and Exchange Commission (SEC) has developed the Whistleblower Program, which allows individuals to be compensated for uncovering EB-5 scams. The USCIS has been heavily chastised for its lack of regulation and openness.
What is the EB-5 Reform and Integrity Act?
Senators Chuck Grassley and Patrick Leahy introduced the EB-5 Reform and Integrity Act in 2019 and again in 2021, with the goal of reforming the federal government’s EB-5 program. The new Act intends to bring the norms and regulations for green card approval up to date, as well as prevent investor cash from being misappropriated through regional centers.
Senator Grassley claims that the EB-5 program has veered off course. Although the program’s original goal was to encourage investment in economically disadvantaged areas and rural areas, in many cases, funds have gone to areas that are already developed and offer a better return on investment.
2019: Legislation Introduced
Senators Grassley and Leahy introduced the EB-5 Reform and Integrity Act in September 2019 to combat EB-5 program misuse. The primary goal of the bill was to increase foreign investment into underprivileged areas in order to stimulate the economy and reduce unemployment. The Act proposed the following:
- Five-year extension of the EB-5 regional center program
- Give DHS (Department of Homeland Security) more leeway in rejecting applications owing to fraud and other program abuses
- Investors and regional centers should be required to contribute to a DHS-regulated fund that will investigate fraud and conduct audits
- Make background checks for EB-5 program candidates and regional center directors mandatory
- Provide applicants with further information about the risks, ramifications, and any potential conflicts of interest
- Provide clearer and more precise job creation needs
- Reduce the time it takes to process a petition
- All regional centers must be owned by the United States
2021: Reintroduced Legislation
Senators Grassley and Leahy reintroduced the proposed EB-5 Reform and Integrity Act in 2021, with minor technical adjustments. The revisions dealt with bankruptcies at regional centers, direct construction jobs, and securities law compliance.
What Does The EB-5 Reform and Integrity Act Mean for Investors?
Despite some criticism of the new EB-5 legislation’s limits, the new law is largely good news for foreign investors. It would entail reauthorizing regional centers for the next five years, increasing regional centers’ accountability to applicants, and providing more comprehensive protection for investors who unintentionally become involved in a fraudulent operation. In addition, the reform would factor in indirect and induced employment when calculating the number of new full-time jobs produced, making this program criterion simpler to meet.