Preeya Malik is managing director of Step Global Dubai
The much debated and prized US EB-5 immigrant investor programme, a United States Citizenship and Immigration Services (USCIS) administered programme, is back in news as it is again up for change – in fact it could even come to an end, if the new administration does not step in urgently.
The EB-5 immigrant investor programme was first created in 1990 to fuel the American economy via incoming foreign capital and job creation.
Currently, the EB-5 Programme allows for applicants to invest $900,000 into approved projects spanning across the United States in return for a green card for the investor, the investor’s spouse, and any children under 21 years of age. The investment must also create jobs for at least 10 US people per investment.
In past years, the EB-5 Programme has been the focal point of discussion several times. September 2015 was the first time that potential investors and industry experts talked about a possible expiration or change in the programme.
Because of those discussions and the threat of an impending expiry, 2015 saw record 14,737 petitions submitted as investors rushed to get applications in before the program disappeared completely.
Step Global, an immigration firm based in Dubai states 2015 as being their best year in terms of EB-5 numbers. The firm saw an incredible spike in investor numbers from around the Middle East and GCC when the potential expiry was announced.
That year, the programme was renewed. However, these same discussions resurfaced for four more years, each time threatening programme expiry or price increase.
In November 2019, the long-awaited change finally happened pushing the $500,000 programme up to its current price points of $900,000 and $1.8 million, depending on where in the US the investment is made geographically.
As a result, just as the price was about to increase, Q1 2020 (of the US immigration fiscal year) brought in the second highest number of EB-5 application submissions since 2015. With ample warning of a price increase, investors rushed to submit I-526 petitions at $500,000 before the price nearly doubled.
The EB-5 immigrant investor programme was first created in 1990 to fuel the American economy via incoming foreign capital and job creation
As the only direct investment route to permanent residency in the US, the then President Donald Trump had shown massive support for the EB-5 Programme because it brought billions of dollars of investment into the country annually.
In fact, the programme has introduced many successful economic benefits, such as job creation and both private and public project funding since 2008, when the programme was first introduced at $500,000.
Throughout the many changes in immigration policy during Trump’s presidency, the EB-5 program has managed to go mostly unscathed.
Just over a year since the price increase, the programme is again up for change. The issue this time is that the programme has a sunset provision, which if not renewed, means the programme will expire by June 30, 2021.
In preceding years, the EB-5 programme was attached to an omnibus bill which automatically renewed the programme once a new budget was approved and passed. An omnibus bill is a document outlining several subjects and issues which can be accepted in a single vote by legislature.
The EB-5 Programme allows for applicants to invest $900,000 into approved projects spanning across the United States in return for a green card for the investor, the investor’s spouse, and any children under 21 years of age
This time, the EB-5 programme has been left standing alone. If not approved on its own by the US Congress, the programme will effectively expire and become obsolete, leaving the US with no other direct investment route to a green card.
Meanwhile, Senators Grassley and Leahy have introduced The EB-5 Reform and Integrity Act which aims to reauthorise the program through 2024 along with changes in regulation which would better protect investors, decrease fraud, and improve the use of investor funds.
In the wake of Covid-19 when the US needs economic stimulus the most, the end of the EB-5 Programme would be detrimental at the least. Since 2008, the EB-5 Programme has injected more than $37 billion into American businesses and created hundreds of thousands of jobs for American workers. In exchange for investment funds, investors get a clear and easy route to a green card.
Without these funds and the job creation attached to the programme, the US could lose out on important development projects, investment into much-needed businesses, government infrastructure funding, and employment for thousands of Americans, at a time when the unemployment rates in the country have doubled since pre-pandemic levels.
Numbers of EB-5 petitions have already dropped to a staggering low, with only 114 applications having been submitted in FY2020. This was due to a combination of factors including the price increase in 2019, a global pandemic, and retrogression for Indian nationals.
Indian nationals have faced an extreme backlog since 2019 when it was thought that due to the high number of Indian nationals applying from all over the world, particularly from India and the Middle East, it would be up to ten years before visas could be issued.
The number of EB-5 petitions have already dropped to a staggering low, with only 114 applications having been submitted in FY2020
With this proposed timeline in place, Indian nationals became more hesitant in applying for the programme as they could not see the benefits of such a long wait for the green card. However, the visa issuance time for Indian nationals is now current, meaning as soon as the I-526 petition is approved they can move forward with filing for a US visa.
While the industry is hopeful that the stand alone EB-5 legislation will pass by the end of June, the fact remains that with the recent change in administration, an impeachment hearing, and many other pressing matters currently sitting in Congress, the chances of timely renewal are slim.
Many experts believe that if the programme is not renewed, it will simply cease to exist. Others believe that when and if the programme is brought back to life, it is likely that the price will again increase from $900,000 to $1.2 million or more, as Congress has been trying to implement a $1 million plus price tag for several years.
As a result, it is expected that we will see another rush of investors in coming months as applicants aim to get petitions in prior to another price increase or the expiry of the program altogether.
Preeya Malik is managing director of Step Global, Dubai, which specialises in US and Canadian Investment and business immigration programmes
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Why the US immigrant investor programme is making headlines again
Preeya Malik discusses the future of the programme first created in 1990 to fuel the American economy via incoming foreign capital and job creation
Preeya Malik is managing director of Step Global Dubai
The much debated and prized US EB-5 immigrant investor programme, a United States Citizenship and Immigration Services (USCIS) administered programme, is back in news as it is again up for change – in fact it could even come to an end, if the new administration does not step in urgently.
The EB-5 immigrant investor programme was first created in 1990 to fuel the American economy via incoming foreign capital and job creation.
Currently, the EB-5 Programme allows for applicants to invest $900,000 into approved projects spanning across the United States in return for a green card for the investor, the investor’s spouse, and any children under 21 years of age. The investment must also create jobs for at least 10 US people per investment.
In past years, the EB-5 Programme has been the focal point of discussion several times. September 2015 was the first time that potential investors and industry experts talked about a possible expiration or change in the programme.
Because of those discussions and the threat of an impending expiry, 2015 saw record 14,737 petitions submitted as investors rushed to get applications in before the program disappeared completely.
Step Global, an immigration firm based in Dubai states 2015 as being their best year in terms of EB-5 numbers. The firm saw an incredible spike in investor numbers from around the Middle East and GCC when the potential expiry was announced.
That year, the programme was renewed. However, these same discussions resurfaced for four more years, each time threatening programme expiry or price increase.
In November 2019, the long-awaited change finally happened pushing the $500,000 programme up to its current price points of $900,000 and $1.8 million, depending on where in the US the investment is made geographically.
As a result, just as the price was about to increase, Q1 2020 (of the US immigration fiscal year) brought in the second highest number of EB-5 application submissions since 2015. With ample warning of a price increase, investors rushed to submit I-526 petitions at $500,000 before the price nearly doubled.
As the only direct investment route to permanent residency in the US, the then President Donald Trump had shown massive support for the EB-5 Programme because it brought billions of dollars of investment into the country annually.
In fact, the programme has introduced many successful economic benefits, such as job creation and both private and public project funding since 2008, when the programme was first introduced at $500,000.
Throughout the many changes in immigration policy during Trump’s presidency, the EB-5 program has managed to go mostly unscathed.
Just over a year since the price increase, the programme is again up for change. The issue this time is that the programme has a sunset provision, which if not renewed, means the programme will expire by June 30, 2021.
In preceding years, the EB-5 programme was attached to an omnibus bill which automatically renewed the programme once a new budget was approved and passed. An omnibus bill is a document outlining several subjects and issues which can be accepted in a single vote by legislature.
This time, the EB-5 programme has been left standing alone. If not approved on its own by the US Congress, the programme will effectively expire and become obsolete, leaving the US with no other direct investment route to a green card.
Meanwhile, Senators Grassley and Leahy have introduced The EB-5 Reform and Integrity Act which aims to reauthorise the program through 2024 along with changes in regulation which would better protect investors, decrease fraud, and improve the use of investor funds.
In the wake of Covid-19 when the US needs economic stimulus the most, the end of the EB-5 Programme would be detrimental at the least. Since 2008, the EB-5 Programme has injected more than $37 billion into American businesses and created hundreds of thousands of jobs for American workers. In exchange for investment funds, investors get a clear and easy route to a green card.
Without these funds and the job creation attached to the programme, the US could lose out on important development projects, investment into much-needed businesses, government infrastructure funding, and employment for thousands of Americans, at a time when the unemployment rates in the country have doubled since pre-pandemic levels.
Numbers of EB-5 petitions have already dropped to a staggering low, with only 114 applications having been submitted in FY2020. This was due to a combination of factors including the price increase in 2019, a global pandemic, and retrogression for Indian nationals.
Indian nationals have faced an extreme backlog since 2019 when it was thought that due to the high number of Indian nationals applying from all over the world, particularly from India and the Middle East, it would be up to ten years before visas could be issued.
With this proposed timeline in place, Indian nationals became more hesitant in applying for the programme as they could not see the benefits of such a long wait for the green card. However, the visa issuance time for Indian nationals is now current, meaning as soon as the I-526 petition is approved they can move forward with filing for a US visa.
While the industry is hopeful that the stand alone EB-5 legislation will pass by the end of June, the fact remains that with the recent change in administration, an impeachment hearing, and many other pressing matters currently sitting in Congress, the chances of timely renewal are slim.
Many experts believe that if the programme is not renewed, it will simply cease to exist. Others believe that when and if the programme is brought back to life, it is likely that the price will again increase from $900,000 to $1.2 million or more, as Congress has been trying to implement a $1 million plus price tag for several years.
As a result, it is expected that we will see another rush of investors in coming months as applicants aim to get petitions in prior to another price increase or the expiry of the program altogether.
Preeya Malik is managing director of Step Global, Dubai, which specialises in US and Canadian Investment and business immigration programmes
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