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Is EB-5 to be or not to be? That is the question!

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What exactly is the EB-5 Immigrant Investor Program? EB-5 was created by Congress in 1990 to stimulate the U.S. economy through job creation and capital investment by immigrant investors. In layman’s terms; EB-5 is a form of alternative financing for business owners small and large whereby the business owner receives financing for expansion or startup costs from immigrant investors. EB-5 financing is a far cheaper alternative than traditional banking loans where the immigrant investor usually assumes most of the risk involved in the business deal. The immigrant investors in turn receive green cards for themselves and immediate family members, a venture that appears to be well worth the risk.

The current minimum investment for an immigrant investor is $500,000. However, the target investment is $1,000,000 from an investor who will be required to create a minimum of 10 U.S. jobs from their investment. Simply put; immigrant investors invest $1,000,000, create 10 full-time U.S. jobs and they’ll receive green cards for the entire immediate family! EB-5 is an excellent program that’s here to stay right? Well not so fast! We are currently in the 5th year of a five year extension from congress. On September 30, 2015 Congress will vote to extend the program, make revisions to the current program or discontinue EB-5 altogether.

According to the American Job Creation and Investment Reform Act of 2015, cosponsored by both democratic and republican members of the senate, Mr. Leahy (D., VT.) and Mr. Grassley (R., IA.); they have proposed amending the EB-5 program. A few key amendments would require a minimum investment of $800,000, up to 7 years in tax returns in order to prove the legality of the funds invested also called “Source of Funds” and new limitations on who can make a gift to another person in order to do an EB-5 investment. Obvious efforts to prove that EB-5 is a legitimate government program that works.

Let’s face it, the EB-5 Immigrant Investor Program has stood the test of time, it’s an excellent alternative to traditional banking loans and the program rewards immigrant investors who invest in our infrastructure with permanent United States residency. It’s a win, win scenario…Right?

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