The US program that grants green cards is lining up Indians

India and China are expected to have the largest outflows of wealthy residents this year after only Russia.

A U.S. visa program that has attracted $37 billion in foreign investment since 2008 for projects such as Hudson Yards in New York and Trump Bay Street in Jersey City is making a comeback — and the queue of wealthy candidates from the China to India keeps getting longer.

The revived EB-5 program is poised to fund businesses ranging from a golf resort in the mountains of Utah to condos in rural Florida – while allowing some new foreign investors to cut lines waiting for years. The controversial initiative, which offers a green card in exchange for investing large sums in an American company and creating at least 10 permanent jobs, had a backlog that stretched nearly a decade before it was launched. to be suspended in June 2021 when Congress failed to reauthorize it.

A settlement last month of lawsuits involving so-called regional hubs that allow foreign investors to pool their funds has put the program back on track for new filings. Earlier this year, the Biden administration signed legislation that steps up audits and on-site visits to deter fraud, while creating a pathway for some to avoid the backlog of cases if they’re willing to invest. in rural areas or places with high unemployment rates. About 100,000 EB-5 visa applicants with some $15 billion in committed investments had been in limbo since the program expired, estimates trade group Invest in the USA.

Meanwhile, US law firms are preparing thousands of new claims.

“It’s like people are lining up for tickets to the movies,” said Sam Silverman, founder of EB5AN, an affiliate network that handles more than a dozen projects with a presence in 20 states. “There’s a giant queue with a limited number of tickets with a long wait, but they’ve just opened two new screenings with literally no one in line.”

China, India

The restart of the program comes as wealthier Chinese attempt to leave their home countries or seek a relief plan. About 10,000 wealthy residents are seeking to withdraw $48 billion from China this year, estimates investment migration consultant Henley & Partners, while another 8,000 Indians are seeking to leave. The two Asian nations are expected to have the largest outflows of wealthy residents this year after only Russia.

The high demand for visas means the cases of more Indian and Chinese investors who have already applied may not move forward due to shifting deadlines, according to a State Department bulletin released earlier this month. -this.

To meet this demand, held its first event in three years in Vietnam last week, attracting hundreds of investors, migration agents, lawyers and capital seekers who set up booths announcing investment projects from Montana to Florida, Ali Jahangiri said. , founder and managing director of the group.

“Attendance was probably better than ever before,” Jahangiri said. “This thing was sort of on hold, but the queue got shorter.”

The revival of the program will be a boon to the US economy because, unlike investment visa programs in other countries, it is focused on targeting job creation, especially in less developed areas outside of cities, said Miami attorney Ronald Fieldstone, who handled EB-5. projects worth billions. “A lot of interesting things are happening in rural areas,” he said. “It’s not just about building skyscrapers.”

Still, the program, which began in 1990, has had its share of problems. EB-5 investors unsuccessfully sought arbitration in 2020 after Related Cos. told them that payments for their Hudson Yards project on the west side of Manhattan would be halted due to pandemic-related losses, one of several legal challenges from Chinese investor groups. Others didn’t materialize at all, like Staten Island’s $600 million Ferris wheel. Last month, two New York state residents were charged with a $27 million fraud in which they allegedly promised visas, big returns and access to the then president. , Donald Trump. Earlier this year, three defendants were convicted in connection with a fraudulent scheme that misled immigrants who invested in a biotech project in Vermont.

The program “is a complete and utter disaster”, which has largely failed to create jobs in vulnerable areas, said Doug Litowitz, a lawyer who represented a group of China-based investors who invested millions in the construction of a condominium and hotel project in Chicago that was never built.

Such criticism has added to concerns about the government’s failure to target development in low-income areas, such as an Opportunity Zones Act Trump signed in 2017. Aimed to help poor communities, it instead ended up being largely a boon to wealthy investors, critics say. . In many cases, EB-5 projects are in areas of opportunity, Jahangiri said.

A spokesperson for U.S. Citizenship and Immigration Services, which administers EB-5 visas, said legislation passed by Congress in March “made significant changes to the program, including requiring for the agency to review and directly determine the high unemployment designation”. ‘ areas.

“USCIS will continue to ensure that each EB-5 immigration benefit application complies with the legal and regulatory framework,” the spokesperson said in a statement.

Alternative destinations

Eleanor Hui, founder of Hong Kong-based Global Life Immigration, said she would advise against high-net-worth Chinese clients applying for EB-5 visas given backlogs, requirements for residents to report worldwide income to US tax authorities and restrictions on mobility pending permanent residence. Alternative destinations such as Portugal, Greece and Ireland have no such drawbacks, she said.

The new law requires EB-5 investors to contribute at least $1,050,000 — or $800,000 in economically disadvantaged areas — and create at least 10 jobs to gain permanent residency. The most popular EB-5 route allows investors to pool resources in regional hubs and count indirect job creation, with the caveat that these hubs must be periodically re-approved by Congress.

Even so, the new rules release pent-up demand. Bernie Wolfsdorf, former president of the American Immigration Lawyers Association, said his firm was working overtime and hiring new staff to accommodate demand from countries like India, which has eclipsed the number of petitions filed since then. China. Attracting such investors could help prevent a brain drain, as many children of wealthy emigrants go to top American schools, he said.

A Hong Kong-based Indian-born finance executive, who asked not to be identified so as not to jeopardize his EB-5 petition, said he wanted his daughter to have access to the US university system. He was drawn to new regulations aimed at cleaning up the program, but is weighing the option against other alternatives in Asia. To meet the minimum investment threshold, he will have to withdraw money from his real estate investments in India or some of his stocks, which he said he was willing to do if it helped secure his daughter’s future. .

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