EB5 Regional Center Program Extended to Sep 201522 Oct 2012
As reported to our readers, President Obama signed a law on September 28, 2012 extending four important immigration programs that were due to expire September 30, 2012. One of the programs extended was the EB5 Regional Center Program, which has been extended through September 30, 2015. Additional details regarding this extended program and explanations of how this program might be beneficial is provided for MurthyDotCom readers.
Background: EB5 Investor Program
The Immigrant Investor Program (commonly referred to as the EB5 program) permits foreign nationals to receive U.S. permanent residence (“green card” status) based upon an investment of capital in a U.S. business that creates employment for U.S. workers. A foreign investor is required to invest $1,000,000 in a business to qualify for the EB5 visa. The required investment amount is reduced to $500,000 if the investment is made in a targeted employment area. Targeted areas in the United States are either rural or have 150 percent higher unemployment rates than the national average. The business must create ten full-time jobs for U.S. workers, a requirement that often presents problems for many EB5 investors.
The EB5 Regional Center Program
The Regional Center program permits an investor to benefit from a more generous definition of job creation. It was the Regional Center program (not the EB5 classification as a whole) that was scheduled to expire September 30, 2012. Unlike the standard EB5 program, in which an investor must prove that the invested business has directly created the required jobs, an investor in a Regional Center may satisfy the requirement through indirect job creation. This includes jobs created with other businesses in the region as either a direct or indirect result of the investment.
A Regional Center is defined as an “economic entity … involved with the promotion of economic growth, improved regional productivity, job creation, and increased domestic capital investment.” Regional Centers must receive USCIS approval. Regional Centers pool investors’ capital and apply the funds toward projects to improve the economy in the approved area. They may directly own and operate businesses utilizing the invested capital, or they may loan money to projects operated by other entities.
Importance of Regional Centers
The Regional Center program has become very popular among EB5 investors. There are more than 240 approved Regional Centers. The Regional Center program is often a viable means for a person with the necessary capital to benefit from the EB5 program in a relatively efficient fashion. Had this program expired, it could have had a negative economic impact for the United States and likely would have sharply reduced usage of the EB5 visa.
Conclusion: Uncertainty Eliminated
The extension of the expiring immigration programs, including the EB5 Regional Center program, allows for continuation of certain benefits for individuals and for the U.S. economy without interruption. It allows persons who are eligible for benefits to continue to file new applications. The extension of the program’s deadline will resolve a great deal of uncertainty that has been surrounding the program in recent months. Although it has long been expected that the program would be extended, the impending deadline may have been a disincentive to investors, who will now be more willing move forward with investments to obtain EB5 benefits. Questions about this program, and other options available under U.S. immigration law, may be discussed in a consultation with a lawyer at the Murthy law Firm.
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