The Impact on EB-5 Visas from Biden’s Proposed Immigration Revamp
President Biden recently sent his sweeping immigration reform bill to Congress for approval. Dubbed the US Citizenship Act of 2021, the bill proposes several major changes to the immigration system in an effort to streamline and better manage the process. If the bill becomes law, it will be beneficial to the EB-5 investor program in a number of ways.
Over the past few decades, the EB-5 visa program has become an increasingly popular way for foreign nationals to obtain legal permanent resident (LPR) status (for themselves and their spouses and children) by investing a substantial amount of money in a US-based business or development project. The required investment amount ranges from $900,000 to $1.8 million depending on the location of the business, and the investment must create a minimum of 10 jobs for American workers.
The EB-5 investor visa program provides a great way for entrepreneurs from other countries to immigrate to the United States without any prior family or work connections. And for families who are looking to educate their children in the US, there are admission advantages and reduced tuition opportunities available through the program as well.
The EB-5 program was created in 1990. And it is worth noting that President Biden (then Senator Biden) was one of more than 80 senators to vote in favor of the original legislation.
How Will the EB-5 Investor Program Change Under President Biden?
Although there are many advantages to the EB-5 visa program, it is not without its drawbacks. One major challenge for those who want to utilize the program is the long processing times, in many cases several years because of the annual limits on the number of applications that are processed.
Although the US Citizenship Act of 2021 does not address the EB-5 program specifically, it implements several changes that would be favorable to the program and help significantly shorten the time it takes for EB-5 visas to be processed. Changes in the bill that may impact EB-5 investor visas include:
- Clearing employment-based visa backlogs.
- Recapturing unused visa times.
- Getting rid of country-based visa caps.
- Eliminating the inclusion of spouses and children in visa quotas.
The two changes that will help the EB-5 program the most are the clearing of visa backlogs and doing away with including spouses and children in annual visa quotas.
Under the present immigration system, investors from some countries have to wait an estimated 10 to 15 years for their priority date to become current. This has forced them to explore alternate ways to invest in a US business endeavor while they wait for their EB-5 visa to process, such as obtaining a tourist visa or an E2 visa for the meantime. Clearing these backlogs will make the process much smoother and easier for these applicants.
Currently, spouses and children are included in the annual number of EB-5 visas that are allowed to be processed. This means that instead of issuing 10,000 visas each year to investors, only about 3,000 to 3,500 investors are able to take advantage of the program because their family members have to be counted as well.
Eliminating the inclusion of spouses and children could potentially triple the annual number of businesses being invested in under the program. This would not only be great for applicants, it will also provide a much-needed boost to the US economy.
Some Troubled Waters Ahead for the EB-5 Program?
While President Biden’s US Citizenship Act of 2021 will make several positive changes to the EB-5 investor program, the bill is a long way from becoming law, and the program itself faces a more immediate danger. The EB-5 program is set to expire on June 30, 2021 if the program is not reauthorized. If this were to happen, it would thrust the fate of thousands of foreign investors and their investment projects into limbo.
Although nothing is guaranteed, there is a pretty good chance that the EB-5 program will be reauthorized, but not without some significant changes. A piece of legislation called the EB-5 Reform and Integrity Act of 2021 has been introduced by Senators Chuck Grassley (R-IA) and Patrick Leahy (D-VT) that aims to increase the efficiency of the program and implement strict measures to combat fraud. This legislation is sure to be the subject of intense debate over the next few months, and numerous changes are likely to be made before a final bill is passed into law.
E-2 vs. EB-5 Investor Visas
One of the biggest differences separating the E-2 and EB-5 is how they help you get to the United States. The E-2 is a visa, while the EB-5 leads to a green card after two years. However, even with this key difference, they are still fairly similar. Although the E-2 is a visa, it lasts for five years and can be renewed for five years at a time as long as you meet the qualifications. If you want to pursue citizenship eventually, the EB-5 may be a better option. If you are approved for an E-2, you may be able to switch to an EB-5 down the road.
Processing Time Differences
This is perhaps one of the most important and obvious differences separating the E-2 and EB-5. If you want an E-2, you could be on your way to the United States fairly quickly. The processing time is often only a few months.
On the other hand, the EB-5 could take years. The E-2 does not have a quota, which allows for a faster processing time. The EB-5 program does have a quota of 10,000 EB-5 visas per year, and no country can make up more than 7% of the total awarded visas in a year. In some countries, the wait for an EB-5 visa is up to ten years.
The Nationality of the Investor
The EB-5 visa is currently available to investors of all nationalities. However, those who receive an E-2 visa must be from a country with whom the United States has an investment treaty. This excludes those from certain countries, such as China, unless they first obtain citizenship in a treaty country.
Job Creation Requirements
Those who go the E-2 route will need to create U.S. employment opportunities, but only in line with the needs of their business. This means that you don’t have to create a certain number of jobs or do so within a certain timeframe, so there is a bit more freedom in your hiring plans.
The EB-5 program has a much more rigid approach to job creation goals. An EB-5 investor is required to create at least 10 permanent full-time jobs beyond the role of the investor. If you invest directly, you must create jobs at the business where your capital is invested. Regional investors can directly or indirectly create jobs. Jobs must be created no later than one year after filing Form I-829.
This is an important factor if you have a spouse and children that you’d like to bring to the United States with you. If you get an EB-5 visa, your spouse and children younger than 21 can come to the USA with you. For those who have an E-2 visa, their spouse and children can also get an E-2 visa. Upon reaching the age of 21, they have to either leave the country or get a different type of visa.
Your Role in the Business
If you have strong feelings about either having a hands-off or more involved role in your investment, this is a crucial difference between the E-2 and EB-5. With an E-2 visa, you must work at the business where you get your visa. You can work as a manager, executive, or essential employee. On the other hand, those with an EB-5 visa can work, go to school, retire, or otherwise spend their time as they choose. They simply have to be a director or limited partner.
Contact the Garmo Group for Assistance with EB-5 and Other Business and Employment Visas
With the EB-5 visa program in a state of flux, foreign investors need to work with experienced immigration attorneys who are on top of all of the changes and have the proven ability to develop creative solutions to overcome even the most complex challenges. The Garmo Group is ready to go to work for you to help accomplish your immigration goals.
To get started, call our office today at 619-441-2500 or message us online for a free initial consultation. And be sure to check back with us for frequent updates on the upcoming changes to immigration law.