“Fixed or Nixed?” Congressional Debates to Reform the EB-5 Program Continue

EB-5 Visa Reform

“Fixed or Nixed?” Congressional Debates to Reform the EB-5 Program Continue

By Mona Shah, Esq. & Omar Hakim, Esq.

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The Battle to Reform EB-5 Continues:

“The program is in need of a major overhaul if it is going to be reauthorized at the end of this fiscal year.”

“…so, we will have to make a decision – should the program be fixed or should it be nixed?” Senator Grassley (R)

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2015 was dominated by the huge legislative effort to reform the EB-5 Immigrant Investor Program, with a few even advocating to completely eliminate the regional center program. The EB-5 Program, however, was extended without any changes until September 30, 2016 (For more information about the debates and discussions about reforming EB-5 in 2015, read An Insider’s View of the EB-5 Program Extension to September 30, 2016. The calls to reform the EB-5 Program have not dissipated in the new year. On February 2, 2016, the Senate Committee on the Judiciary held a hearing on the EB-5 program, and on February 11, 2016 the United States House Judiciary Committee held a similar hearing, titled “Is The Investor Visa Program an Underperforming Asset?”. The title of the hearing itself was encouraging. The House hearing focused on reforms and improvements to the program. It was reassuring indeed that Congress identified that the program is indeed an asset that benefits our national economy.

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Concerns Raised to Reform EB-5 Program

Statements and testimonies for both hearings paraded some overarching themes, these included: the ability of projects to “gerrymander” targeted employment areas (“TEAs”) and the need to increase the minimum investment amount. Doubts were also expressed as to whether a meaningful number of jobs are truly being created by EB-5 projects. The speakers also expressed their belief that the lack of sufficient oversight over the EB-5 program raises concerns about the ability of USCIS to detect fraud and deception.

There is no question, as with any investor-related activity, that there should be strong oversight to ensure that investors are protected from fraudulent and deceptive activities. But the main issue keyed on by the speakers in both hearings is the belief that EB-5 funding should flow to areas that are truly economically depressed. Further, another concern expressed by many speakers is that the minimum investment levels — $500,000 for TEAs and $1,000,000 for all other areas – have not been adjusted to take account of inflation since the EB-5 program was established in 1990. The speakers, in agreement with the vast majority of the EB-5 community, suggested that the minimum investment amounts be raised and questioned why USCIS has not raised the amounts on its own, as it has the authority to do.

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In Summary:

In both hearings, speakers recognized the importance of the EB-5 Program and the benefits it brings as it is a catalyst for economic development. But the Congressmen leading the hearings, notably those most disappointed by the results of the 2015 EB-5 legislative efforts, emphasized their belief that the program should move closer to its original intent. In particular, the speakers focused on their desire to reform the TEA definition and the need to raise the minimum investment capital levels. It is still unclear whether the EB-5 Program will be reformed by the end of 2016, especially as this is an election year, but there is clearly a strong movement by key members of Congress to drastically reform the EB-5 program.

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About the Authors:

Mona Shah, Esq. is a dual licensed attorney, in the UK and the US. While in England, Mona worked as a Prosecutor with the British Crown Prosecution Service, before moving to New York. Mona has more than 17 years of experience and extensive knowledge of all facets of U.S. immigration law; her practical expertise ranges from specialist business petitions to complicated, multi-issue deportation and removal litigation in both state & federal courts. Mona is highly proficient and experienced in EB-5 law and practice, with hands-on experience setting up, working with and establishing EB-5 projects, both direct pooled investments and Regional Centers, nationwide. In addition, she has dealt with complex, multifaceted RFE’s for both Regional Centers as well as for the Investor. Mona is the author of a published book for investors on the EB-5 laws and procedures. Mona regularly writes and publishes articles and opinions, as well as addressing investors and developers in EB-5 related seminars in the US and overseas. Mona has been interviewed by mainstream news channels and quoted in major newspapers. Mona was also voted as one of the top 25 EB-5 attorneys by EB-5 Investors.com. Mona is also an adjunct professor at the Zicklin Business School of Baruch College, part of the City Universities of New York. She teaches part time courses on EB-5. Mona Shah & Associates have been instrumental in the success of numerous projects, crafting projects and marketing overseas, bringing in millions of dollars for the US as well as helping to create thousands of jobs.

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Omar Hakim, Esq. is an attorney at Mona Shah & Associates in New York City. The firm is an established source for EB-5, assisting numerous Regional Centers/EB-5 Projects and Investors in navigating this complex, nuanced and constantly changing area of immigration law. Omar offers clients years of experience in corporate finance, the financial regulatory system, securities matters and in general corporate governance matters. Additionally, he is able to draw on his experiences at major federal regulatory agencies and bodies, which includes work at the SEC, the United States House of Representatives Committee on Financial Services, and the CFTC. He earned his J.D. at the University of Virginia; his Master of Laws in Securities and Financial Regulation at the Georgetown University Law Center; and his B.A. in Economics at Georgetown University.

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