Since its inception nearly three decades ago, the EB-5 visa program has allowed foreign nationals to obtain green cards by investing money in the United States. However, with the program set to expire at the end of April 2017 – and increased scrutiny from the Trump administration – the future of the EB-5 is uncertain.
“Within the past five years, the [EB-5] program has reached a height of popularity. It continues to create hundreds of thousands of jobs for U.S. citizens and is a source of billions of dollars of capital,” Partner Todd Soloway told Hotel Business Magazine in a recent article.
Soloway, who leads Pryor Cashman’s Real Estate Litigation and Hotel + Hospitality Groups, predicts that the Trump administration’s focus on job creation will allow the program to continue, though certain aspects will likely undergo modifications.
“As the program becomes more popular, we should anticipate more restrictions being imposed,” he explained. “With regard to the proposed rules, we are keeping an eye on the proposed increases to the minimum investment amounts to $1.3 million in targeted employment areas (“TEAs”) and $1.8 million in other areas; the methodologies by which TEAs are calculated; and if there are any measures taken to diminish the backlog of visas for Chinese nationals.”
Historically, the program has yielded significant benefits for the U.S.: “The pros of the program are evidenced by the numbers. In fiscal year 2016, there were 20,804 EB-5 cases pending at USCIS, with an average approval rate of 90%, which translated into $3.8 billion approved for investment in the U.S.,” Soloway said.
Notwithstanding these figures, Soloway offered a note of caution for developers: “While we expect the EB-5 program to be extended, securing access to capital might prove to be more difficult in the coming months. It is certainly in the best interest of hotel developers to seek alternative sources of funding so that their projects are not stalled.”