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The EB-5 Regional Center program allows foreign investors to invest in a business enterprise approved by the United States, thus providing the investor and their immediate family members with the opportunity to obtain green cards and residency. in the USA. The program allows some American companies to access funds that would have a much lower interest rate than they would receive from a loan obtained from a bank and thus presents a more compelling option for developers. Since the inception of the program, particularly the Regional Center route, the investments have served as a catalyst for the growth of the US economy and the US labor market due to the demands of the job creation per investor program.
Overall, the program has been a positive factor for the US market and has attracted increasing interest from foreign investors; interest that directly affects the growth of the US economy. Therefore, the current suspension of the program has many ramifications for the US economy, investors and the US job market. While the road to the regional center has been suspended, potential investors have not been able to inject their $ 500,000 of capital into the US economy, which is currently a critical tool in helping its recovery as a result. crippling effects of the pandemic on the global economy.
Based on the calculations of a report published by the IIUSA, the suspension of the program may result in the loss of more than 486,900 jobs in the United States due to the possibility for current investors to withdraw from the program. While the program has expired, the immigration part has also been put on hold, meaning applicants who are currently in the program cannot proceed with their application until a new authorization is received. The worst-case scenario of not re-authorizing the program would mean a huge economic loss for the United States as all current investors would have to withdraw their investments. The ripple effects of withdrawing investors from the program will also lead to job losses in the United States. For example, targeted areas with high unemployment where building construction would have taken place will suffer, as the regional center would eventually have to stop construction until they replace all investors who had withdrawn from the program.
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Will the program be re-authorized?
It is imperative that the program be re-authorized, as it is a vital tool for the US economy. Since its inception, the program has continuously proven to be a positive contributor to the country’s growth, and when re-authorized it will continue to demonstrate its importance. Based on an analysis of the history and trends of the program, there have been instances where the program has reached its expiration date and Congress has failed to re-authorize it in time but re-authorize the program. program at a later stage. Therefore, there is very little worry for current and potential investors. In December 2018, the federal government failed to pass the Omnibus spending bill, to which the EB-5 program was attached, resulting in a de facto lapse of the program. The program was reinstated as soon as the federal government passed the Omnibus bill. It is expected that the program will be reintroduced as part of the Omnibus spending bill by September 30, 2021. Once the program is re-authorized, potential investors will have a short window to deposit under the rules of $ 500,000.
Related: The Case That Could Change the EB-5 Immigrant Investor Program
How long will the program remain at $ 500,000?
It would be economically advantageous for the US economy to increase the capital required to keep up with the current rate of inflation. Based on a previous analysis of the program’s performance under the $ 900,000 requirement, it might make sense for the federal agency to introduce a phased increase plan so that the actual target market can still afford. to participate in the program. It is not known how long the program will stay under the current $ 500,000 rules. Behring’s previous court case, along with Homeland Security Secretary Alejandro Mayorkas’ attempt to ratify the $ 900,000 rules, demonstrate that it is clear that USCIS intends to increase the requirement for EB-5 capital investment at some point in the near future.
Related: Federal Court judge considers $ 900,000 rule change EB-5