A 10-year backlog in EB-5 applications has a silver lining: $16.6 billion that investors can reinvest in real estate or other businesses if they still want a green card. The origin of the money is a unique problem with the EB-5 program, in which investors can invest $500,000 in a U.S. business in exchange for a green card. But the program requires investors’ money to be “at risk” pending the outcome of the application. Since the U.S. only hands out 10,000 EB-5 visas a year, a years-long backlog means some developers want to return investors’ money before they obtain the green card.
The solution? In June, the U.S. Citizenship and Immigration Services said by redeploying EB-5 capital, EB-5 investors can keep their money “at risk” in order for their applications to remain in good standing. “People can find uses for billions of dollars,” H. Ronald Klasko, an immigration lawyer based in Philadelphia, told the Wall Street Journal.
More than $16.6 billion will be re-invested through 2020, according to NES Financial, a California-based EB-5 servicer. In July, Greystone & Co., NES and Capital United LLC launched a fund that will provide real estate bridge loans with EB-5 money. Greystone expects the fund to have raised $100 million by next year.
The redeployment issue has raised concerns about EB-5‘s future at a time when the program faces reauthorization by Congress. USCIS’ June memo, for example, has less rigorous standards for vetting projects that receive redeployed EB-5 money. There is also no job-creation requirement associated with the redeployed funds. [WSJ] — E.B. Solomont
Latest from Admin TOA
- Fox Renews ‘MasterChef Junior,’ Adds Daphne Oz as Judge
- Ozmens’ SNC Marks 50th Moon Landing Anniversary in U.S. & Europe
- Manhattan Printing Helps Brands & Retailers, Large or Small to Build Effective Presences that Improve Their Bottom Line
- Daron Acemoglu is Named Institute Professor at MIT
- Turkish Citizen Elected as the Next Greek Orthodox Archbishop of America