EB-5 Source of Funds
Before the Immigration Act of 1990, there were only four categories of employment-based preferences for immigration visas. The law set priorities for artists with exceptional skills, scientists with advanced degrees, and migrants looking to work in fields with labor shortages and government hires. The newest employment based category, the EB-5, gives a conditional permanent visa to immigrants willing to invest money into the United States.
A foreign investor looking for permanent resident status under the EB-5 program needs to invest at least $1 million in a development project (or $500,000, if the investment is targeted in a rural area or a place with a high unemployment). The issue is that the investor has no guarantee on the return of the investment. With the main objective of living in the States, immigrants care far more about getting a green card than anything else in part because their families get visas too.
The program works by having immigrants first apply for a provisional green card and if approved can come to the United States for two years. Then, to get their permanent visas, they have to submit evidence within the two years that their money has provided 10 jobs. If the project fails to do that, immigrants and their families can be deported.
For the first 18 years of its existence, the EB-5 program was a bust. However, with the 2008 financial crisis hit, banks began to struggle in loaning out money, and that’s when the EB-5 visa applications skyrocketed. Today the program brings about $1.8 billion into the U.S. annually. The government is on pace to grant more EB-5 visas in 2014, than it did in the programs first 17 years combined.
Despite its growing popularity and impact to the economy, the EB-5 industry remains essentially unregulated. EB-5 investments are typically sold through unregistered securities offerings and rarely involve broker-dealers, so deal documents receive no SEC scrutiny and face little due diligence. According to experts, even the attorneys who prepare offering documents rarely check their clients’ claims or backgrounds. This opens the door for potential fraud where unverified and untraceable money can be funneled into the United States by unconfirmed sources.
For these reasons, it is important regulate the money coming in from these foreign countries. More than 80% of the program’s applicants now come from China and regulations need to put in place that will track and verify the source of the investor’s money. It is crucial to have funds wired from foreign countries that are legally confirmed by their banks to avoid any disturbances in the application process.
The experienced immigration specialists here at Buda Law Group have extensive familiarity with EB-5 Source of Funds, Tracking and Tracing reports in the EB-5 applications they have handled in the past. Therefore, it would be most beneficial to potential applicants to have their financial data analyzed and confirmed by our attorneys to make sure everything is in order for their application. If you are interested in seeking an EB-5 visa and/or are looking for a sound investment option, give us a call today for a free consultation.
John B. Buda, Esq.www.budalawgroup.net office: 310-452-1872 [email protected] 3301 Ocean Park Blvd. Suite 205 Santa Monica, CA 90405