On September 30 the U.S. Congress passed a government funding bill containing a short-term extension of the EB-5 Regional Center Program through December 11, 2015. In addition, the bill contains extensions for E-Verify, the Conrad-30 Waiver Program, and the Non-Minister Religious Worker Visa Program.
According to National Law Review, the EB-5 community had wondered what would happen after the EB-5 Regional Center program’s previously expected expiration on September 30. Meanwhile, Congress has been working toward an EB-5 reform package.
EB-5 is an important, albeit somewhat controversial and often misunderstood, source of real estate and economic development financing. Congress created the program in 1990 to attract investments from qualified foreign investors. They must demonstrate that at least 10 new jobs were created or saved as a result of the EB-5 investment, which must be a minimum of $1 million, or $500,000 if the funds are invested in certain high-unemployment or rural areas. In 1992, Congress designated EB-5 Regional Centers to pool EB-5 capital from multiple foreign investors for investment in USCIS-approved economic development projects within a defined geographic region. Today, 95 percent of all EB-5 capital is raised and invested by Regional Centers.
Regional Centers, which can be publicly owned, privately owned, or a public-private partnership, maximize job creation benefits by helping with the investment of capital in large-scale projects. They work with regional economic development agencies that use the funds to leverage additional capital.
Now that the program has been extended until December, industry stakeholders need to present their ideas about implementing workable reforms and supporting job creation. The objective is to meet the expectations of investors, regional centers and job creating projects to enable participants to proceed in a stable, predictable manner.
Written by Jim Simon, a Principal at RSG