Investor Visa Application

EB-5 Visa: Lawsuit Seeks to Overturn Investment-Level Increase

A lawsuit filed by an EB-5 Regional Center is taking aim at the November 2019 price hike for the EB-5 Investor Visa. If successful, the minimum investment amount for EB-5 would return to USD 500,000 in a Targeted Employment Area. A federal judge in California has indicated she may be willing to reverse the Trump-Era changes to the EB-5 program rules after a lawsuit filed by Behring Regional Center. 

If successful, any changes would likely be short-lived. The EB-5 Regional Center Program is set to expire at the end of June and a reform and reauthorization proposal has started working its way through Congress could set the USD 900,000 minimum investment level in stone.  It is our opinion that the new EB-5 law in June would be revised to increase the price back to itS current level.

This means that there may be an extremely short window of time, possibly as little as days, in which to file an EB-5 I-526 Petition at USD 500,000.   Properly preparing a case to be filed can take weeks or longer depending on where the funds are coming from and will require investors to fund an EB-5 project which is configured to accept investment at that investment level.  Any investor potentially interested in availing themselves of the USD 500,000 investment level should therefore have their case ready so it can be filed at a moment’s notice.  

The minimum investment requirement for the EB-5 Investor Visa to USD 900,000 in November 2019 to take account of inflation since the program’s inception in the 1990s. The $900,000 amount relates to investments in a Targeted Employment Area (TEA) – areas with relatively high unemployment. Outside of TEAs the minimum investment requirement rose from USD 1 million to UDS 1.8 million. The November-2019 rule change also centralised decision making around what constitutes a TEA, transferring authority for this to the Department for Homeland Security.

The rule changes had a significant impact on EB-5 uptake with a sharp drop-off after November 2019. This was partly due to so many people rushing to apply, exhausting pent up demand. Covid slowed the recovery, but green shoots have been emerging as the pandemic recedes. Long term reform and reauthorization in June will provide much-needed certainty and confidence to future investors. 

This federal court case could change calculations for some investors. If the price temporarily drops to USD 500,000 it could cause a massive rush to file EB-5 applications. The application process requires careful documentation of the source of funds used for the EB-5 investment. This can take time to prepare, so anyone considering an application or monitoring this court case for a drop in the investment level should contact us immediately. 

The court case comes at a time of brief uncertainty for the EB-5 Investor Visa Program. With reauthorization of the Regional Center Program required before the it expires in June, would-be investors need to weigh their options carefully. 

On the one hand, you could tie up your capital under uncertain conditions to pursue the EB-5 Regional Center in case it ends forever in June. Or on the other hand, you could wait until there is certainty in the second half of 2021, but know that the price of that certainty could mean the EB-5 route is closed to you forever. The risk is up to the client, but it is worth talking through your options with an immigration attorney. 

The likelihood is that the program will be renewed. The EB-5 Investor Visa brings in millions of dollars in investment and creates hundreds of thousands of jobs all across America at no cost to the taxpayer. It played a valuable role in America’s recovery from the 2008 financial crisis and could do something similar as the US economy recovers from Covid.

Anyone who has already applied for an EB-5 Visa but is waiting an adjudication may wish to file a writ of mandamus in federal court ahead of the June 2021 expiry date. Usually applicants should wait at least two years before resorting to legal action against the United States Citizenship & Immigration Services (USCIS), but the June expiration may change this. Contact us to discuss your specific circumstances.


EB-5 Source of Funds for Italians Webinar

EB-5 Source of Funds for Italians. Webinar.

Join Mark I. Davies, our chairman, and Matteo Tisato, Senior Immigration analyst in our Italy Practice for a webinar with EB5AN today at 2pm EST / 8pm Italy. Click the link below to register & the same link to view a recording after the event.

Source of Funds for EB-5

In order to ensure the integrity of the EB-5 Investor Visa Program, applicants must be able to document where the funds used to pay for their Green Cards come from. An applicant must demonstrate that they are the owner of the funds being invested and that they came by these funds through legal means.

Since the total investment requirement for EB-5 is a minimum of $900,000, many of our clients need to pull together funds from multiple different sources. This can include wages, the sale of property, capital gains on investments, gifts from friends and family, as well as loans.

In reality this can be quite complicated, and your EB-5 immigration attorney will play a vital role in helping you to make strategic decisions about which funds to use for your EB-5 investment.

For example, you will need to prove that all taxes have been paid on the sources of income and that there is appropriate collateral against any loans.

Crucially, it is important that the relevant documents are translated into English. Therefore, it is very helpful to work with law firms with in-house Italian language capabilities. Matteo Tisato, our Senior Immigration Analyst, works with our Italian clients in this respect.

Davies & Associates Source of Funds team across the United States is highly experienced. They have dealt with hundreds of cases and have a 100% success rate in this aspect of the application.

What is EB-5?

The EB-5 visa grants a person US permanent residency (Green Card) in exchange for a minimum $900,000 investment. A single application and investment can include the primary applicant, their spouse, and any children under the age of 21.

In addition to documenting the Source of Funds, the other key requirements of EB5 are are

  • invest in a New Commercial Enterprise
  • create at least ten jobs
  • invest at least $900,000 in a Targeted Employment Area or $1.8 million outside of these areas.

To help ensure compliance with the rules and to minimize risks to the Green Card, the vast majority of EB-5 investors elect to work with a Regional Center, but it is possible to make and manage the investment yourself in so-called “Direct EB-5”.

Webinar

On today’s webinar, Mark and Matteo will be joined by Sam Silverman and Michael Schoenfeld, cofounders and managing partners of EB5 Affiliate Network (EB5AN). a leading EB-5 consultancy and Regional Center network.

Our appearance alongside EB5AN is in no way an endorsement of their work or projects. As a law firm we offer our clients impartial due diligence on their chosen Regional Center projects. Our attorneys assist clients with identifying the risks to both their Green Card and the return of their capital – whichever Regional Centers they shortlist.

The webinar is scheduled for Thursday, February 18, 2021 and will share valuable information on the challenges EB-5 investors face with respect to of source-of-funds documentation. The webinar will break down this complicated issue for an Italian audience, with Matteo from our Italy team on hand to provide translation into Italian where necessary.

The EB-5 program faces reauthorization at the end of June 2021. The likelihood is that the program will continue, given the large number of jobs it creates and the billions of dollars in investment it brings to the United States. Yet, nothing can be taken for granted. Anyone considering the program should consider acting before the end of June. Given the time it takes to document Source of Funds to prepare an application, the time to start is now.

Please click here to register for the webinar, or to view a recording of the webinar.


This article is published for clients, friends and other interested visitors for information purposes only. The contents of the article do not constitute legal advice and do not necessarily reflect the opinions of Davies & Associates or any of its attorneys, staff or clients. External links are not an endorsement of the content.