GlobeSt.com featured Haynes and Boone, LLP Partner Emilie Cooper in an article about the future of the EB-5 program, which is set to expire in December.
Here is an excerpt:
Emilie Cooper joined Haynes and Boone as a real estate and litigation partner in July. She says there are uncertainties as to the future of the EB-5 visa program, which since 1990 offered a route to permanent residency in exchange for investing money in the U.S. Cooper points to questions that surround not only congressional reauthorization but also the backlog of investors waiting for green cards.
In May 2017, NPR [National Public Radio] reported that 80 percent of EB-5 investors are Chinese.
“With the backlog in visas, a traditional construction project may take five years. The backlog for visas is now longer than that. Because of the way the EB-5 program is structured, money needs to stay at risk until the green card is granted,” explains Cooper. “Because the construction projects don’t last as long as it takes to get the green card, issues have started cropping up as the backlog for visas has grown.”
There is a backlog particularly with the Chinese EB-5 visas, says Cooper.
Cooper notes the program has very little regulation. But high-profile failed developments and scandals could affect reauthorization and accompanying requirements.
“We are starting to see more now lawsuits arising from EB-5,” says Cooper. With the backlogs and with the need for the loans to remain outstanding before green cards are issued, she’s seeing more cases concerning the redeployment of money.
“Even if the program is not reauthorized, litigation will continue for several years to come. There are still all those loans outstanding,” she says. “There are a lot of them. For a long time it was very, very cheap money.”
To read the full article, click here.