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Buying the American Dream—The EB-5 visa

EB-5 Job creation and money in US

 

I know Trump makes for a great opening line in any blog, so I will start with Trump.  Trump criticized Mr. Khan, the Gold Star parent by saying that Khan, a lawyer took money from Muslims so that they could buy their citizenship.  What he was referring to is the EB-5 investor visa program which is controversial.  But before I go into any details, let me say that Trump used EB-5 foreign money to build his luxury rental apartments in New Jersey called Trump Bay Towers.

 

The EB-5 is a program where investors can invest 1 million USD (or $500,000 in underdeveloped areas) and create at least 10 jobs.

The funds have to be obtained “lawfully” and USCIS traces the source of the funds meticulously.  If for instance, one inherits a property and sells it to obtain funds, the Citizenship and Immigration Service will demand that one traces the source of funds used by the buyer to buy the property.  This requirement is very strict

The investors have to put the funds “at risk”.  That means that the investor has to invest the money into a for profit, new venture. Very often, people invest in “regional Centers”—- businesses which pool a lot of these investment and build a new project.  However they create very little interest, and the money is tied up for about 10 years.  The interest is not enough to be able to live in the US

 

Over the years investors in this program have invested billions of dollars and have created thousands of jobs.  So why is this program criticized?  .  The problem with this program is not what Mr. Trump thinks, Muslims bringing in illegal money.

 

The problem is China.  90% of the individuals and capital come from China.  At first it would seem that China sells so much goods to us, that it is wonderful for them to invest capital in the US.  But PRC is not a free country, and that’s the problem.  Ordinarily PRC does not allow money to be brought outside the country. However, it turns a blind eye to the EB-5 program.  The investors do not directly find investment opportunities in the USA. China has state run brokers who liaise with owners of Regional Centers in the US. So these state run brokerage have access to how real estate is done in the US. They also have access to computer files.  They also can invest and control flow of capital in strategic areas.  Some have criticized that China is using economic, information and technological “warfare” with us through this EB-5 program.

The program expires on September 30th, 2016. But my guess is that this Congress will simply extend the program for one year, and let this be the problem of the new administration.

 

For more information, contact Houston Immigration Lawyer, Annie Banerjee

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