A pivotal aspect of the EB-5 investment is to prove that the funds invested come from legitimate earnings. For some investors, like Iranians, there is an extra hurdle, for transferring the funds from Iran to the U.S. In fact, most Iranian investments are encumbered and, therefore, necessitate a diligent compliance with U.S. law.
Foreign entrepreneurs are still waiting for the United States Senate Finance Committee to evaluate the proposed Startup Visa Act of 2015 (or EB-6 Visa) that will allow foreign entrepreneurs to obtain permanent residency in the U.S. by investing and raising capital from a qualified U.S. investor. At present, there is no employment-based immigrant visa available for foreign entrepreneurs. Unfortunately, the Act is currently stuck at the committee level, and, thus, the EB-6 Visa has become somewhat of a myth in the immigration law community.
Many Chinese investors are interested in the EB-5 visa program.
Issues that an investor should consider when deciding to invest through direct investment or through a Regional Center
Regional Centers are institutions that allow immigrant-investors to invest through a fund that is used to sponsor an EB-5 project. In contrast, a direct investment requires the immigrant-investor to directly invest in his or her own business In both cases, it is the immigrant-investor’s responsibility to ensure that investment is put towards a sound business or project.
Deciding between those two types of EB-5 investments can be confusing. The following questions and answers provide the immigrant-investor with initial guidance:
The pivotal aspect of the EB5 application process is for the investor to demonstrate the lawful source of funds. The EB5 program requires the investor to prove that the funds invested in the project have been earned lawfully. This requirement is satisfied when sufficiently detailed documents are provided.
Structure and Terms of an EB-5 Loan Agreement
EB-5 stakeholders have been waiting with baited breath for what lies ahead for the EB-5 Regional Center Visa Program after it was set to terminate on December 11, 2015. After actively discussing the EB5 visa program for the last six months, Congress, surprisingly, passed an Omnibus bill on December 15, 2015 to extend the program to September 30, 2016 without making any significant changes to the program.
One of the main requirements of the EB-5 Visa Investor Program is that an investor’s capital should be invested in an enterprise wherein the capital is “at risk.” As per program regulations, an investor has to present evidence that his capital is, or is in the process of being, placed “at risk,” not that he or she is planning to do it at some point in the future. Prospective plans to place capital at risk will not be sufficient. In addition, the evidence of the invested funds has to demonstrate that the whole amount of the capital is at risk.
The EB-5 Regional Center program has helped foreign investors to immigrate to the United States, created work places for local residents, and helped US economy grow. Unfortunately, however, not all project developers are acting in a “good faith.” There have been many documented cases in which EB-5 investors have received false information and unfounded promises from managers of Regional Centers (RCs), and there are virtually no remedies available to investors who are victimized by these fraudulent enterprises.
Ever since Congress passed a temporary extension of the EB5 Investor Visa Program on September 30, 2015 allowing the program to continue to run until December 11, 2015, there has been speculation regarding the possibility of significant reforms to the program. Since its first implementation in early 1990’s, the program has been reauthorized six times, each time without any major changes. What should we expect this time?