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The Golden Visa

Real Estate Legality

 

The United States Citizenship and Immigration Services (USCIS) oversees the controversial and popular EB-5 Visa Program (the employment-based fifth preference visa). The Program was implemented in 1990 by the USCIS to encourage economic and job growth through foreign capital investments. Since the 2008 financial crisis, the program has been very popular amongst Chinese investors in particular. The incentive for any foreign investor? About 10,000 green card applications are fast tracked every year.

The EB-5 Program permits foreign investors and entrepreneurs (in addition to their spouses and dependent children under 21) to apply for a green card if they make a commercial enterprise investment in the U.S., and create a minimum of 10 permanent full-time jobs for U.S. citizens, residents, and other immigrants authorized to work in the U.S. (conditional resident, temporary resident, asylee, refugee etc.). This number of employees must be maintained for at least 2 years. The minimum capital investment requirement depends on where in the country the foreign investor intends to do business. In regions with high unemployment or rural areas (known as Targeted Employment Areas), the minimum investment is $500,000. In all other areas, the minimum investment is $1,000,000.

The Obama administration extended the EB-5 Visa Program until April 28, 2017. However, under the Trump administration, the minimum investment amount is likely to increase to about $1.3 million. On May 7, 2017, Trump signed H.R. 244, Honoring Investments in Recruiting and Employing American Military Veterans Act 2017. Commentators assert that visa issues are buried in the bill, signifying that the regulations directly regarding the EB-5 program are soon to change. The investment increase is predicted to be detrimental to the program and the EB-5 Investment Coalition expects a significant drop in demand.

The fear of this increase is what has led to the Kushner “golden visa” fiasco. Although the EB-5 Visa is widely known amongst Chinese and other foreign national investors, it wasn’t until Kushner Companies reached headlines offering investors green cards for investing in their developments that it has become a popular topic. Nicole Meyer, Jared Kushner’s sister, travelled to China urging investors to take advantage of EB-5 to invest in Kushner real estate developments in New Jersey before the implementation of Trump’s new law. There is a clear conflict of interest as there is no real divide between the Trump administration and their family businesses. According to the New York Times the Kushner’s previously requested a tax abatement for the development of two towers comprising of 1,500 luxury apartments in New Jersey that received funding from EB-5 investors and further annoying New Jersey residents. The Trump administration assured the New York Times it would evaluate the program “to ensure that [it] is used as intended and that investment is being spread to all areas of the country.”

Critics are skeptical of the program as it permits wealthy foreign investors and their families to essentially purchase green cards. However, this is a common practice in many countries where governments provide fast track visas or even citizenship for investments. This practice can be perceived as unfair, especially to individuals who are not financially endowed, as some have waited for U.S. green cards for over 20 years. Critics argue that despite the requirement of needing to be able to trace the money back to the investor to ensure legal compliance, there is still a chance of fraud. There have been cases of fraud, such as the recent raid in Los Angeles where federal agents uncovered a scheme involving foreign investors who not comply with the requirements of the program. However, the EB-5 Program does have the potential to continue boosting the economy and generating jobs for Americans. Since October 2012, the EB-5 Program has brought in $8.7 billion and 35,140 jobs into the U.S. economy. Perhaps instead of eradicating the program completely, the focus should be on enforcement of the rules and regulations that already exist.

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