The EB-5 Reform and Integrity Act of 2022 brought many changes to the EB-5 program. For the latest information, please click here.
Dear Mr. Trump:
Understanding fully the limitless number of urgent issues on your agenda, I would like to focus your attention on one U.S. immigration program. I do this for two reasons. First, it is a program that is set to expire on April 28, 2017, and will likely be the subject of legislation enacting significant changes before that date. Second, it is an immigration program, that I suggest to you, furthers your Make America Great Again agenda.
That program is the EB-5 job creating investor program. As you know, both from your own experience and the experience of your son-in-law, EB-5 is an important part of the capital stack used by many real estate developers across the country. As a real estate developer yourself, you can understand better than any other U.S. President – or even member of Congress – that EB-5 capital has played an important role in facilitating the construction of many real estate projects that otherwise might have stalled or terminated because of insufficient capital sources. Even on those projects that could have moved forward without EB-5 capital, EB-5 has often significantly reduced the cost of capital, allowing developers to proceed with projects in a more profitable or expansive fashion than they would otherwise have been able to do.
You have repeatedly voiced your ardent concern about flight of jobs and flight of capital from the U.S. It is hard to imagine a government program more closely aligned with those objectives. EB-5 is a program that brings 12% of all foreign direct investment – to the U.S. – over $15 billion in the last 10 years. In addition, EB-5 is, at its very core, a job creation program. Rather than encouraging the flight of jobs from the U.S., its core requirement is creating jobs in the U.S. Estimates are that the EB-5 program is responsible for the creation of hundreds of thousands of jobs just in the last few years.
Part of your Make America Great Again agenda revolves around rebuilding America’s infrastructure. How about incentivizing foreign nationals to invest in America’s infrastructure? With over 80% of the investors in this program being Chinese nationals, who have a waiting list that is likely in excess of 6 years, the best way to incentivize infrastructure investments would be to urge Congress to create a national interest investor category exempt from the quota limitations. Even without Congress, you could order USCIS to deem investors in our country’s infrastructure to be eligible for a national interest waiver.
Speaking of quotas, does it make sense to disincentivize investors from investing in the U.S. and creating jobs in the U.S. by having waiting lists so long (7 years or longer) that many investors have been choosing to invest in other countries (even though they would prefer to be in the U.S.)? If you agree that this is not in America’s best interest, your administration might urge Congress to deal with this problem.
Something more directly in your control is the length of time it takes USCIS to adjudicate both investor petitions and petitions for approval of real estate development projects. No one can understand better than you that developers can’t wait 18 months or 24 months or longer for action from a government bureaucracy. That’s how long it takes USCIS to approve a developer’s project or an investor’s petition. The latter is significant because, in many cases money does not flow through to the project until the investor’s petition is approved.
Finally, you are a staunch proponent of less regulation on businesses. Congress is on the verge of enacting new EB-5 legislation that will create 50 pages of new requirements on corporate and institutional sponsors and developers of EB-5 projects – which will, in turn, engender many hundreds of pages of regulations. Don’t get me wrong – many of these suggestions are necessary to protect investors and keep the program devoid of fraud. However, when you read some of the draft legislative provisions, you might agree that they go beyond beneficial protections and delve into the realm of government micromanagement of business.
As an immigration lawyer, I admit to having significant concerns with the anti-immigration agenda espoused by a number of your appointees. Without in any way diminishing these concerns, I am hopeful that your background in real estate development, as well as your Make America Great Again agenda, will find common cause with the EB-5 job creation program.
Very truly yours,
H. Ronald Klasko