Proposed Government Reforms to the EB-5 Program
Proposed Government Reforms to the EB-5 Program
EB-5 are terms that are written as Employment-based fifth preference visa in full. The EB-5 is a pilot program also referred to as the EB-5 Regional Center Program started in the year 1992. The EB-5 allows for investors from foreign countries to seek permanent residency in the United States on a work basis. They are allowed to settle into the state as long as their company or invention is guaranteed to provide at least ten permanent jobs to the citizens of the United States. Though it is of benefit to the country and the foreigner, this program is on the verge of being closed because it has become a fraudulent means of gaining permanent residency in the United States.
It has become fraudulent in that investors apply for residency claiming that they are to create job opportunities in the areas with low job employment rates whereas they venture into where the rate of unemployment is not as high. They use this route because the amount payable to set up a business in high unemployment is relatively low compared to that with a small unemployment rate. For this reason, the U.S government has decided to put up measures that would somewhat reduce the rate at which people gain residency in the U.S using form EB-5. Here are the possible reforms likely to be upheld:
Reduce The Number of People an EB-5 Visa Can Accommodate
The visas are to be given to investors together with their spouses and children thus making the number of permits granted to amount to 10,000. They plan on reducing the number of visas granted to a smaller number by not issuing families of investors with visas. The aim of removing family visas from the benefits as a result of EB-5 is because the issued visas have been hitting the 10,000-limit set for them every year. Thus, striking of the family visa would reduce the number of people seeking permanent residence and also the number of people trying to relocate.it will also reduce the tendency of people looking for inventions so that they could move to the United States with the whole family. Though visas are granted for family, only children who are below 21 years of age and also those who are not married can be given visas.
Re-Directing Investors to Areas with High Unemployment Rates
Re-directing of investors into regions where the rate of employment is way below the required percentage. It is because most areas have been categorized as high unemployment areas thus denying the neediest parts of the country an opportunity for development and its locals employment. Investors prefer these areas because the amount to set up a business is cheaper by half the amount needed to establish their business in a developed area.
Increase in The Minimum Investment Amount
As per now, investment in the TEA areas is set at $500,000, and that of non-TEA regions stands at $1.2 million. For TEA areas, the amount is to heighten up to $1.35 million and $1.8 million. TEA areas include distressed urban districts, rural districts, regions with enclosed military bases and also for manufacturing and infrastructure projects. TEA stands for Targeted Employment Areas.
Reforming the TEA designation Process
This move is aimed at ensuring consistency in TEA adjudications and ensuring designations adhere to Congressional intent more closely. As per now, the responsibility of designating an area as TEA is given to state officials who are under pressure from state capitals to encourage business development in their estates. Due to the weight, the state authorities engage in different forms of gerrymandering to ensure that their areas are recognized as TEA areas. As a result of such activities, DHS (Department of Homeland Security) seeks to eliminate the ability of states to designate TEA areas and proposes that it makes the designations itself. If they become successful in changing the process, it will be harder for regional center projects to acquire TEA status for lower minimum investment amounts. Changing the designation process from being overseen by the states to oversight by the federal government will reduce the waiting time for investors before they are issued with green cards. The process is said to take years as the states have been overseeing it. All the same, as the Department of Homeland, seeks to reform the designation process, they still have not yet laid out a formula they tend to use in curbing fraud by the investors.
The initial purpose of creating the EB-5 program was to give investors in developing countries a chance to grow, create employment opportunities to the class of the unemployed in the United States and also contribute to the development of the United States. Despite the intentions, the program may not have worked as expected because there are no means to evaluate whether the inventions meet the criteria required and also it seems like a platform for some investors to seek for cheaper labor thus rendering former employees jobless.
