EB-5 Legislation Could Spell Change for Foreign Investors
By Mark Feldstein
The Immigrant Investor Program, more commonly known as EB-5, found itself in the news recently due to the introduction of a Congressional bill in July 2017 that could change qualifying terms. But first, let’s review the EB-5 program and how it currently affects foreign investors and entrepreneurs.
The federal EB-5 Program has been in effect since 1992. Its purpose is to provide U.S. visas and a path to citizenship for immigrants who invest at least $1 million in a commercial enterprise here and employ a minimum of ten qualifying U.S. workers. Applicants might also qualify by investing at least $500,000 in certain targeted employment areas — designated U.S. locations that are predominately rural or have a high unemployment rate.
The RAISE ACT and EB-5
The Reforming American Immigration for a Strong Economy (RAISE) Act is proposed legislation that would toughen legal immigration standards through a point-based system. The RAISE Act would retool the EB-5 Program in a few ways, including the following:
- Rather than automatically qualifying for green card or citizenship status through targeted business investments, applicants would be given six or 12 points depending on the minimum amount they can invest. A total of 30 points would be needed for citizenship.
- The investment totals would rise to $1.35 million and $1.8 million from the current $500,000 and one million dollar levels.
- Applicants would have to be actively engaged in the management of their U.S. businesses, not just passive investors.
The good news for foreign investors and entrepreneurs is that The RAISE Act has not found universal acceptance even among Congressional members of the political party in power. As a result, the odds of passage of the bill as it’s presently written are relatively low. Nonetheless, Wiss will keep an eye on the legislation and alert readers to significant changes to the EB-5 Program if and when they occur.
In the meantime, be sure to ask your immigration attorney for more information about the EB-5 Program and qualification details. Before taking advantage, be sure to meet with a Certified Public Accountant to determine how this program can affect you and your compliance with Internal Revenue Service filing requirements.
Mark Feldstein, CPA is a partner at Wiss & Company LLP. You can reach him by calling 212.594.8155 or firstname.lastname@example.org.