The US EB-5 program has been extended temporarily until December 11th 2015. Unlike the previous instance in September 2012 when the program was reauthorized for three years, the US Congress has preferred a temporary extension to create consensus for introduction of reforms and new rules related to the program.
The EB-5 program was established in 1990 primarily to attract foreign investment into the US economy. Administered by the USCIS, the investment immigration program offers legal fast-track permanent residence in the USA against minimum investment of US$1 million in a commercial enterprise.
Applicants investing capital in rural or targeted high-unemployment areas are entitled to permanent residence against minimum investment of just $500,000. The program further requires the investment to create or preserve at least jobs for US workers.
In 1993, the program was expanded through the establishment of the Regional Center Program. This enactment provided for economic entities called Regional Centers designed to facilitate EB-5 investments in specific geographic areas. While minimum investment and job-creation requirements are the same, Regional Centers free investors from the responsibility of personally managing their investments.
Further, even indirect creation of jobs is permitted under this Program. Inclusion of indirectly-created jobs, proved through economic models, and the low costs involved in investing in Regional Centers have made this option the most preferred option for wealthy investment immigrants.
For US businesses, the Regional Center program is a comparatively simple alternate source of funding for large commercial development projects. As of September 2015, more than 730 Regional Centers have been established in the country with a majority of EB-5 investors preferring to invest in such entities.
Over-emphasis on Regional Centers and instances of applications being cleared with poor or no oversight has raised fears of EB-5 program being abused by fraudulent applicants. This has led to calls for reforms including introduction of measures like hike in the minimum investment limit, restriction on inclusion of indirect jobs for compliance with the job-creation requirement, stricter oversight, harsher penalties for instances of frauds and abuses, and rigorous monitoring of the program.
The EB-5 Regional Center Program temporary extension is designed to enable authorities to arrive at a consensus on new reforms that will make the program safer without compromising investor demand.