Congress Seems To Have More Tinkering To Do Before Passing EB-5 Regional Center Program Reform
I was convinced that Congress was satisfied with the version of the EB-5 Regional Center Program Reform bill it had worked out. I was wrong and I was not alone in that. Upon reflection though, I can understand Congress' hesitancy. I want to remind the EB-5 stakeholder community about the 2002 EB-5 amendments and what a pain in the neck that was. If you have no idea about those amendments, then please back off of EB-5 and do your homework before proceeding any further. In the wake of the stagnation of the EB-5 program following the issuance of the four 1998, EB-5 Precedent Decisions and the lawsuits that followed, Congress tried to give the investors a break. They passed very convoluted, complex, and mainly useless "ameliorative" amendments in 2002. INS was directed to issue regulations in under one-year (I think it was 120 or 180 days), but those amendments took nearly a decade to be published in the Federal Register and helped only a small handful of EB-5 investors. I am wondering if Congress wants to avoid that and build some kind of "safety valve" into the reform bill before finalizing it.
I can see some issues that Congress might want to address upfront. Please consider the current EB-5 landscape. Last time I saw statistics, 99.1% of all EB-5 investments were through Regional Centers. Also, as of this writing, USCIS says that as of Dec. 2, 2015, USCIS approved 781 regional centers, 37 have been terminated. I cannot help but wonder if there were any alien investors among those 37 terminated Regional Centers. I also am wondering which of the 781 will fail and drag EB-5 investors down with them. Maybe Congress has similar concerns? Maybe Congress is looking at potential "safety valve" provisions that might allow aliens to shift to different Regional Center? Maybe salvageable projects can shift to new Regional Centers, or new but better management? Maybe Congress will make it easier for EB-5 investors to shift to a new project within the same Regional Center? Maybe Congress will allow some or all of the aforementioned changes, which would be quite material, without losing their priority date? That last one might not be viable because of the potential for abuse but maybe the unwary victims of poor quality deals or outright fraud could not lose conditional status while submitting new I-526s? These are just some possibilities to explore. Maybe the readers out there have some additional suggestions? Please, write your Congressional Representatives in both houses!
Reprinted with permission.
Joseph P. Whalen is an independent EB-5 consultant, advocate, trainer and advisor.
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DISCLAIMER: Work is performed by a non-attorney independent business consultant. It is the client's responsibility to have any and all non-attorney work products checked by an attorney. I provide highly-individualized training based on consultation with my clients. I serve Regional Center Principals and their counsel, potential EB-5 investors, and project developers. I am not an attorney myself although I have trained numerous attorneys and INS/USCIS adjudicators in complex issues within immigration and nationality law when I was an adjudicator there for many years. I do not prepare forms, write business plans, or create economic analyses. I do review them for clients prior to submission and suggest corrections and/or modifications to run by your attorney and investment advisor.