News & Insights

Home » News & Insights » New developments regarding the changes to the EB-5 Visa program

New developments regarding the changes to the EB-5 Visa program

Other

by Rocio Ramirez, from Unsplash

The first major overhaul of the EB-5 investor visa program since its creation almost thirty years ago has seen a number of notable developments since we wrote about it at the end of October. Most notably, Congress passed a month-long extension to the current program to ensure continuity and allow individuals to better prepare for the change. Currently, the changes to the program are set to take effect on December 20.

In addition to this, a bipartisan bill in the senate seeks to make additional changes to the EB-5 program to “further combat fraud and address national security weaknesses”. Senators Chuck Grassley (R-IA) and Patrick Leahy (D-VT) are sponsoring the legislation as part of a broader effort to shake up US foreign relations. Efforts to make the EB-5 program conform with national security concerns can thus be seen as part of the changes to international trade and investment resulting from the current administrations commercial conflict with China (and more recently, the European Union). The most important provision of the proposed legislation is a clause that increases the scope for the Department of Homeland Security to deny or terminate program applications where there is “fraud, criminal misuse or a threat to public safety or national security”. Journalists have noted that abuses of the EB-5 program have by no means been limited to foreign investors—state officials in South Dakota have been prosecuted for misusing EB-5 funds after luring in foreign investors with false promises of business opportunities. [1]

Even more recently, a regional center in Florida has filed a motion in federal court to halt the changes set to take effect on the grounds that they are unconstitutional. Regional centers serve as nodes that connect EB-5 projects and foreign investors, and stand to be directly hit by the big hike in EB-5 minimum investments. The suit argues this increase will deter investment and also increase the risk that investors will pull out of existing projects. The complaint also argues the changes violate 10th amendment rights by individual states to manage their internal affairs, although this seems like a stretch given EB-5 is a federal program dealing with external relations. With Miami as one of the most important sites of EB-5 investment, Florida has much at stake with any changes to the investment program, as of course, does New York. [2]

[1] Riley, K. (November 2019) With new EB-5 program regs going into effect, Grassley goes after bad actors from Homeland Preparedness News https://homelandprepnews.com/featured/39888-with-new-eb-5-program-regs-going-into-effect-grassley-goes-after-bad-actors/ Accessed December 6 2019

[2] Larsen, K. (December 2019) Lawsuit seeks to halt new EB-5 regulations from The Real Deal https://therealdeal.com/2019/12/04/lawsuit-seeks-to-halt-new-eb-5-regulations/?utm_source=Sailthru&utm_medium=email&utm_campaign=NY%20Daily%20%7C%2012.5.19&utm_term=New%20York%20Daily Accessed December 6 2019

Recent Posts

Impact of Shorter COVID-19 Quarantine on Workplaces

On Monday, the CDC announced changes to its recommended isolation and quarantine time from 10 days to 5 days for asymptomatic people with COVID-19. They recommend that people leaving isolation after 5 days continue to wear a mask for the following 5 days. The CDC also...

Restaurants Sue Over Vaccine Mandate

Restaurant operators sued Mayor Bill de Blasio and New York City over Key to NYC, the new indoor vaccine mandate program, on August 17-the same day the mandate went into effect. A group of restaurants in Staten Island, through the Independent Restaurant Owners...

Financial Regulators’ New Target: Social Media Influencers and SPACs

The Financial Industry Regulatory Authority (“FINRA”) will conduct three new regulatory sweeps in an effort to combat various activities causing extreme fluctuations in the financial markets. FINRA has chosen to target special purpose acquisition companies (“SPACs”),...

Does WARN Apply to Virus Closures?

Enterprise, in Benson et al. v. Enterprise Leasing Co. of Florida LLC et al., has tried to argue that the Worker Adjustment and Retraining Notification Act (“WARN”), through its natural disaster exception, does not apply to closures caused by COVID-19. Two Florida...