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In June 2021, the Regional Center Program expired. The amount of time that has elapsed since is unprecedented, as the program has never been defunct for this long. Presently, those eager to see the program reinstated are waiting for Congress to approve an appropriations bill that may include EB-5 reform.
On the other hand, a leaked document that was exposed on February 3, 2022, has given many within the industry hope that Congress will in fact pass approval on EB-5 reform. The document was a drafted EB-5 proposal that stipulates the reauthorization of the regional center program, with no reauthorization needed again until 2027. It also alters certain policies and adds integrity measures.
That being said, the same bill would see the current $500,000 EB-5 investment minimum raised to $700,000. This consequential hefty increase has the potential to dissuade foreign nationals from participating in the EB-5 process; in the meantime, those who are currently planning on making an EB-5 investment should hurry; it may not be very long before the leaked bill is made official and all participating foreign nationals will have to adhere to the $700,000 minimum.
We now explain how foreign nationals can invest at $500,000.
Accumulating Capital for the EB-5 Program
First and foremost, prospective investors should have access to an immigration lawyer with a wealth of knowledge when it comes to the EB-5 process. An experienced lawyer who has worked with EB-5 investors in the past could provide valuable legal aid to prospective investors.
Foreign nationals should be aware that any EB-5 capital acquired for the purposes of their investment will be held to a stringent series of examinations by United States Citizenship and Immigration Services (USCIS) in order to determine its legitimacy. Within its Policy Manual, USCIS specifies that investors are allowed to access various sources of income; however, adjudicators need to determine the origins of the capital and whether they are lawful. Because different types of funds necessitate different types of documentation, investors are encouraged to prepare the necessary verifications ahead of time. For example, investment funds obtained from third parties as gifts or loans are usually logistically complex and may require more thorough documentation.
Another requirement foreign nationals should keep in mind is that EB-5 investment capital must remain at risk during the entirety of the active investment. Under contract, foreign nationals are not entitled to the reimbursement of any lost capital. Additionally, the lowered threshold amount of $500,000 is only applicable to EB-5 ventures in targeted employment areas (TEAS) – the $1,000,000 minimum amount is in place for all other business ventures.
Deciding on the Best EB-5 Project
When it comes to picking the optimum EB-5 offering, investors should know that it is imperative for their project to satisfy all USCIS criteria. This due diligence will increase an investor’s chances of obtaining permanent residency. When looking at different ventures and enterprises, investors should pick one that can generate at least 10 jobs. Within the guidelines of the direct EB-5 investment model, these direct jobs must last a minimum of two years, be full time, and be offered to workers who are legally certified to work in the United States.
Apart from the job criteria, prospective investors should also assess the business venture’s economic potential. The initial funds used to ignite the project should be just a fraction of the project’s overall capital structure. Moreover, the project’s managers should also be accordingly qualified and proficient.
The Current $500,000 Minimum May Only Be Temporary
Speculations vary—it could be mere days, or it could be weeks before EB-5 reform actually takes place. Reform is not guaranteed—Congress may or may not include EB-5 content in forthcoming legislative bills. With that said, many are anticipating increases in the EB5 investment minimum in the near future, and foreign nationals should seize the opportunity of the $500,000 minimum and begin investing now.
