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Launched in 1990 by the U.S. Citizenship and Immigration Service (USCIC) the EB-5 visa program helps the U.S. complete for international capital against other countries that offer similar programs. It is designed to attract foreign investment in projects that create jobs for U.S.citizens.
Applicants must commit $500,000 to $1,000,000 to a new business or project that will create at least ten jobs over a specified time period and submit a detailed business plan to be approved by the U.S. residency. Permanent residency can be granted after a 2-year conditional period if the employment objectives are fulfilled.
The EB-5 visa program benefits both applicants and the marketplace: investors receive conditional green cards for themselves , their spouse, and any children under of 21.
U.S. developers gain access to low-cost international capital.
Economically depressed Targeted Employment Areas (TEAs) get jobs.
Real estate agents may also benefit because EB-5 visa holders must establish a U.S. residence, and therefore may become prospective home purchasers.
There are two main types of EB-5 visas. The individual EB-5 requires direct investment in any for-profit of business that creates at least 10 full–time jobs for U.S. workers. The Regional Center EB-5 visa requires investment in USCIS-approved regional centers creating at least 10 direct, indirect jobs per investor. The investor is usually a limited partner or member of an LLC and is free to live anywhere in the United States, and can work or not work as the investor wishes.

Recent Adjustments
Several steps have helped the EB-5 program manage its growth pains. In September 2012, President Obama renewed the program for a three-year period, eliminating some degree of hesitancy among potential investors with what had previously been termed a "pilot program".
The USCIS has also reorganized its EB-5 processing unit to help it deal with a surge in applications during the recession. To tackle its processing backlog, an additional EB-5 unit was hired in Washington, D.C. and more personnel were added, which hopefully will improve wait times for approval or denial of 1-526, the initial EB-5 petition. Some of the most significant changes in the EB-5 arena resulted from a memorandum issued by the USCIS in May 2013. It clarified the USCIS' position on key issues that were causing delays and inconsistencies, and which were most likely to result in denials.
Clarifications and policy changes included the following:
EB-5 funding may be used to replaced initial bridge funding in Regional Center projects. This means that an investor can join a project after it has moved beyond its speculative preconstruction stage, reducing financial risk and the risk of the project to meet USCIS requirements.
The USCIS recognized the "fund model" so that an investment in single Regional Center enterprise can fund a portfolio of approved projects, reducing investor risk. The USCIS no longer requires an investor to restart the entire application process if the business plan materially changes after conditional residency has been approved, but before permanent residency is granted.

EB-5 Market Matures
In recent years the number of EB-5 visas issued has more than doubled, from 3,463 in FY2011 to 7,641 in FY2012. The increase has been driven by investors from mainland China, who make up more than 80 percent of EB-5 investors. Earlier this year EB-5professionals feared the program would reach its limit of 10,000 visas per year for the first time in 2013. That did not happen, but the risk that it could raised new questions and concerns.
The market has also evolved in terms in terms of the types of projects that utilize EB-5 funding. In the mid-2000s many EB-5 projects were run by small developers who were crowded out of the credit market. The EB-5 program gave them access to low-cost capital they couldn't find elsewhere. For example, Jay Peak, a ski resort in northern Vermont, used foreign funding in 2008 to expand its ski facilities.
Since then very large developers have begun utilizing the EB-5 program. Major hotel developers like Marriott, Hilton, Hayatt and Starwood have tapped it for large projects throughout the country. Hotels are a particularly good fit to the programs because they generate so many jobs. Now smaller EB-5 projects find it hard to compete for EB-5 investors against large ones which have a lower risk of non-completion.

Fraud and the SEC
In October 2012, the USCIS announced plans to work with the Securities Exchange Commission (SEC) in identifying and prosecuting fraud in EB-5 Regional Center projects must now issue Private Placement Memos (PPMs) that follow strict SEC securities guidelines.

Implications for Global Real Estate Agents
The EB-5 visa may be a good fit for those who seek entry to the U.S. and the opportunity to buy residential property, including individuals, couples and families who prefer to live and school their children in the U.S.; foreign nationals on long waiting lists for other visas; entrepreneurs who want to start a U.S. business; and affluent buyers who want a second home in the U.S. and more flexibility to use it.
If you have prospects who fit these descriptions, consider learning more about EB-5 visas and expending your professional contacts so that you are able to discuss the program with knowledge and refer your clients to experts who can advise them on next steps.

Identifying EB-5 Professionals
Applying for the EB-5 visa is a complicated process requiring an extraordinary amount of paperwork as well as due diligence on the project. The applicant needs experienced advisors with strong background in EB-5 projects to navigate the process, including immigration attorneys specializing in EB-5 law. They can explain more about the process and current waiting times (timing may be critical to your buyer's plans). Immigration attorneys with EB-5 experience do not have to be local. In fact, they probably won't be.

Beyond the Investment
In some cases persons pursuing an EB-5 visa may be willing to make such an investment as a vehicle to achieve residency. Returns on EB-5 funding are very low compared to other investment products. The main goal is residency, which is only granted unconditionally if the EB-5project fulfills its job creation requirements. Successful project execution is of the utmost importance.
Is overseas investors are looking for higher returns, they may also be able to invest in the non-EB-5funded part of the project. "I had client who wanted to invest more than $500.000 which was earning one percent as EB-5 money," recalls Elmankabady. "The developer let her invest an additional $2.000.000 in the general fund which returned 12 percent."
The EB-5 visa program is a great way to help affluent overseas buyers obtain residency and spend more time in their U.S. properties.

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