EB-5 gets five-month extension

Congress has given a five-month extension to the federal EB-5 visa program that is popular with Chinese investors and gives green cards in exchange for investments in American businesses that create jobs.

The visa program was given a one-week extension until May 5 as part of a spending measure – called a continuing resolution – approved by Congress on April 28 to avoid a shutdown of the federal government. Then on Sunday Congress extended a new funding bill until September 30, which also gave EB-5 a five-month extension without changes.

EB-5 targets foreign investors who put at least $500,000 in a project that creates a minimum of 10 jobs in an economically-depressed region.

In return, investors receive a two-year visa with a good chance of obtaining permanent residency for them and their families. About 10,000 EB-5 visas are awarded each year and previous estimates indicate that Chinese account for about 85 percent of recipients.

"Congress did this to give itself more time to try to resolve some big-ticket items like additional funding for the military and healthcare reform," Stephen Yale-Loehr, a law professor at Cornell University wrote in an email.

Some members of Congress say that weak government oversight has resulted in a program that is rife with fraud and abuse, and that it favors projects in affluent urban areas over ones in rural communities. They want to either end the program that was set up in 1990 or reform it.

The White House issued a statement to The Washington Post last week saying that the Trump administration is weighing changes to the program.

"There are serious concerns held by the administration regarding the EB-5 visa program, in part because it is not being used as it was primarily intended," said Michael Short, a White House spokesman. "The administration is continuing to evaluate reforms to the program, which we believe is in need of substantial repair."

The US Citizenship and Immigration Services, part of the US Department of Homeland Security, administers EB-5. It estimates that since 2012 at least $8.7 billion has been invested in the US economy and 35,150 jobs created through the EB-5 program.

Homeland Security has proposed increasing the minimum investment from $500,00 to $1.35 million in a "targeted employment area," one with high unemployment or a rural area.

The proposal suggests raising the minimum investment to $1.8 million for developments in low- to average-unemployment areas, up from the current $1 million.

paulwelitzkin@chinadailyusa.com