As we reported previously, the EB-5 visa program has drawn the interest of hospitality developers looking for alternative financing mechanisms. While there doesn't appear to have been much activity on SB 642, which would make the EB-5 Regional Center Program permanent, there have been a couple interesting developments in this area over the past few weeks.
USCIS Introduces Consolidated Policy Memorandum
On November 9, USCIS Director Alejandro Mayorkas presented a Draft Policy Memorandum Guiding EB-5 Adjudications. The stated goal of the memorandum is to combine various EB-5 policy memoranda into a single overarching agency policy memorandum that will “incorporate constructive stakeholder input and reflect the lessons learned since the various memoranda were initially promulgated.”
While the memorandum is still being developed and is not yet operative, it does provide a fairly good overview of some of the EB-5 Program's core concepts. It also signals the endorsement of a couple key recent policy positions. Most commentators are focusing on the deference given to states in designating targeted employment areas. However, in practice, the following statement may prove much more relevant:
Historically, USCIS has required a direct connection between the business plan the investor has provided and the subsequent removal of conditions. USCIS would not approve a Form I-829 petition if the investor had made an investment and created jobs in the United States if the jobs were not created according to the plan presented in the Form I-526. While that position is a permissible construction of the governing statute, USCIS also notes that the statute does not require that direct connection. In order to provide flexibility to meet the realities of the business world, USCIS will permit an alien who has been admitted to the United States on a conditional basis to remove those conditions when circumstances have changed.
Senators Schumer and Lee Introduce VISIT-USA Act
Senate Bill 1746, formally titled the Visa Improvements to Stimulate International Tourism to the United States of America, has won endorsement from the U.S. Travel Association and the American Hotel & Lodging Association as it seeks to increase inbound tourism, especially from China and Canada.
However, the portion of the bill attracting most attention would provide a 3 year visa for foreigners who invest at least $500,000 in residential real estate, including half for a home in which they live for at least 6 months a year. Some EB-5 advocates are concerned that this new program would, in effect, result in competition for wealthy foreign investors, and that the EB-5 Program would be at a disadvantage because of its greater qualification hurdles. Supporters of the "residential visa" counter that the programs are fundamentally different - for example, the residential visa would be temporary and not permit the foreign investor to work in the U.S. But these arguments haven't stopped the EB-5 advocates from questioning the impact on the residential real estate market and labeling the residential visa a "job-killer."