What Happens If An Investor Waits And The Laws Change?


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People were talking about the end of the program, not because they believed investors would not be willing to pay $800,000 as opposed to $500,000, but because of all the other requirements that would have made it much more difficult to prove source of funds if they could no longer get family loans.

A typical way for a parent to gift the child would be if they wanted to take a second out on a piece of property and gift that. With the new legislation we would not have been able to do that way, although they would still be able to do that if they sold a piece of property.

It would limit the options we have on source of funds if the law would have passed or if a new law passed with a lot of regulations on source of funds. One issue would be the limit on TEAs, the Targeted Employment Areas and the other thing that was added was that Immigration would decide on the TEA.

Currently, each of the States decides what is a TEA within their own State and they were taking that away. There would be no way to know how long it would take immigration to decide on whether a project was in the TEA. Right now, this can be determined within a few weeks because there is a certain mechanism in each State and some have certain areas already designated as TEAs, so that would be all out the window.

It could take a year or who knows how long to even know whether an investor could invest in an $800,000 area assuming the amount went up. There are a lot of things that would make it much more difficult if and when the law does change.

Is Now The Time To Pursue An EB-5 Visa Before The Laws Potentially Change?

Yes, this would certainly be the time to move forward with this because the investor would have nothing to lose.

The adjudicators are familiar with the current law and although they may be more strict in the application just because they were hoping it would be more restrictive; the reality is that if an investor was ready to start, they should start right away because even proving the source of funds would take a month or so, choosing a deal would take a month or so and transferring the money here would also take a month or so.

Even if an investor decided to go ahead on February 1st, their case would probably still not be filed before 2 to 3 months thereafter. The earliest it could probably be filed would be in May. It is not like an investor could just say they were ready to do it and then think they could file in a week. There would be a lot to do, like tracing the money and at least we have the current regulation, not anything more draconian.

How Can An Attorney Assist Someone Regarding The Changes In The EB-5 Visa Program?

Before we even took a case, we would go over the source of funds with an investor to make sure my client had documents to prove from where they got the money.

We do this primarily in countries where there is a requirement of filing taxes, like in China.

Over 85 percent of investors have been from China and it will probably stay like that at least while it is still $500,000 and none of the other changes happened. A lot of people do not pay taxes on their full income, whether it is in China or some other countries.

Immigration requires the person to provide at least 5 years of tax history if they come from some places where they pay taxes.

If somebody has $10 million in the bank, but their tax returns showed they made $50,000 a year for the last 5 years and they also had living expenses, then it would be difficult to show how the person had saved up $550,000 including administrative expenses based on a $50,000 yearly income.

In this case we would have to go over options and see how else we could document that the person had legally obtained $550,000. It may be that a friend loaned the money, or the person had a piece of property that they did not think they had to sell because of course they had $10 million in the bank but they could not show from where that came legally. It is most likely that money was legal but immigration would never accept that.

We would go over the options with them and see if we could find other ways of proving source of funds, and then we would apply once we felt comfortable.

Someone who had gone through the whole process of investing the money and getting approved and going to the interview might get denied because they had something like a marijuana or other drug conviction, a gun law conviction, they had entry by fraud, or they did not maintain the visa or any number of different violations that are non-waiveable.

We would go over those charges first. We would have the client fill out a long questionnaire and we would do whatever we could to determine they would be able to be approved at the end.

Years and years ago, after somebody filled out the form, one of the questions was whether the person had ever been a member of the communist party. The person said, “No” on their questionnaire and on the form.

They went to the interview and it came out that they were, but we were able to finally turn it around because it was not a meaningful membership. We have had cases where spouses did not want to tell their husbands they had a conviction, and then at the interview the husband got approved, but the wife did not. They both didn’t come to the US.

A lot of things could happen that are bad news which is why we try to resolve any negativity from the beginning.

For more information on When To File Immigration For EB-5 Visa, a free initial consultation is your next best step. Get the information and legal answers you’re seeking by calling (310) 477-3000 today.

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