By Mona Shah, ESQ. & Hermione Krumm, ESQ.
Just revealed… the “last, best and final offer” for the EB-5 program from the judiciary leadership of the House and Senate. During the past few weeks, the EB-5 industry stakeholders representing urban and rural interests have been busy meeting with Chairman Grassley and Chairman Goodlatte, behind closed doors whereupon the “last, best and final offer” was formed. Senator Leahy and Senator Cornyn also reportedly contributed to the “final” deal.
The latest proposal cites the minimum investment amount for rural (R)/urban distressed (UD) areas as $925,000, whereas it would be $1.025 million for non-set-asides. There would be an additional fee of $25,000 to be split evenly between the investor and regional center or $50,000 to be paid by the regional center entirely. Thankfully the increase of the investment amount is not retroactive.
As expected, the proposed offer differentiates set-aside visas allocated to rural (R)/urban distressed (UD) areas from non- set-aside visas. There would be 3,000 set-aside visas, to be equally divided between rural and urban distressed areas. There would be no set-asides for luxury rural areas (although what constitutes as “luxury rural” is yet to be defined), and unused visas would only be available in set-aside category. Non- set-aside visas would have an annual cap of 7,000.
One notable modification from the current program is the lowered job creation requirement. The proposed deal reduces the number of jobs required to be created for R/UD areas to 5 indirect jobs, while keeping the 10 jobs for non-set-asides by requiring 1 to be direct and 9 to be indirect.
The proposed bill would not immediately go into effect, as 4 months of moratorium would be given to the USCIS for adjustment. After the end of the moratorium, all areas would raise the minimum investment amount to $925,000, 8 months after which, non-set-asides would be raised to $1.025 million.
Backlog relief: The proposal does not appear to give very much relief to the ever-growing backlogs as the only portion dedicated to backlog relief is that for 1 year starting from the date of enactment, any unused visas in the set-aside category may be used by old petitions that meet the new definitions of R/UD. The original intention of Congress was that the 10,000 EB-5 Immigrant Investor visas was for 10,000 investors. The inclusion of dependents in this number has capped the amount of capital that can be infused into the US.
A regional center’s internal email indicates that Grassley has issued an ultimatum that if the industry rejects this proposal, there will be no reform bill and the regulations will be allowed to take effect. If the industry, acting through Senator Cornyn, accepts this offer, Grassley will move forward to draft an actual bill. It is hoped that if the Industry give their consent to this proposal, the judiciary leadership will assent to correcting the visa issue, which will allow for billions of dollars to permeate into US businesses, creating thousands of jobs.
While it might be hard to predict how the industry may react to this proposal, it is undeniable that the industry is tired of extensions. The lack of visas and uncertainty have caused a stagnation. The upcoming months are going to be extremely busy for Congress and the industry. MSA Global will continue to update our audience on regulation changes within the EB-5 industry. Stay-in tune to our website and podcasts for more information once it becomes available.
About the Author:
Mona Shah, ESQ.
UK born, Mona, a dual licensed attorney, was formerly a Government Prosecutor with the British Crown Prosecution Service. Mona has extensive knowledge of all facets of U.S. immigration law; her expertise ranges from specialist business law to complicated, multi-issue federal deportation litigation before the US Courts of Appeal. Recognized as an industry leader in EB-5, Mona has received many accolades for her work, including voted top 25 EB-5 attorneys in the US 3 years in a row; Top Lawyer by Who’s Who International, ‘Top Attorney of North America’
Mona, an adjunct professor at Baruch College, CUNY University, has authored numerous articles, a published book for investors, co-edited EB-5 Gateway (BLS) and is a recommended author with Lexis Practice Advisor. Mona is regularly invited to speak worldwide, has been interviewed by mainstream news channels, including Fox Business News, Al Jazeera and quoted in major newspapers, including the New York Times.
Hermione Krumm, Esq.
Hermione Krumm, Esq. is an associate attorney with Mona Shah & Associates. Hermione works with EB-5, corporate, merger and acquisition (M&A), intellectual property and foreign direct investment (FDI) matters involving China, the UK and the US. Hermione received her LL.B. (Hons) from the University of Manchester School of Law (UK), and obtained her LL.M. from Cornell Law School. Hermione speaks fluent English, Mandarin and Cantonese.