Why EB-5 Will Likely Be Extended This Summer

While there are many questions about the future of the EB-5 visa investor program, Roy Carrasquillo of Carrasquillo Law Group thinks the program makes too much sense not to continue and will be extended before it is set to expire this summer.

“Given the large amount of job creation and economic development that it brings, I believe that it will be extended this summer,” Carrasquillo says.

One of the reasons Carrasquillo feels very optimistic about the future of EB-5 under the Biden Administration is the background of Alejandro Mayorkas, who heads the Department of Homeland Security. He played a vital role in revitalizing the program during the Obama Administration and has experience with US Citizenship and Immigration Services, which oversees the EB-5 program, according to Carrasquillo.

“I think it [Mayorkas’s experience] is beneficial to the program itself, not only because we hopefully will see changes that will make the program more effective, but also because of his understanding of the program and the issues that we’re facing,” Carrasquillo says. “It will also help improve the transparency and the compliance within the different rules and regulations of the program.”

However, Carrasquillo thinks there could be additional changes to motivate more capital to come through the United States and to improve the compliance and transparency of the program. EB-5 offers a path to US Citizenship to people who lend a minimum of $900,000 to a U.S.-based project that creates or retains at least 10 US jobs.

Ultimately Congress needs to come up with a solution for the program. “I believe there is bipartisan support,” he says. “The clash is more big versus small.”

While there are concerns about transparency, many of the concerns about the program boil down to the fact that EB-5 capital generally migrates to large cities in New York, California and Florida.

“There has been a lot of talk of incentives to be able to attract more capital to the states, keeping in mind that the program needs to remain viable in the whole process,” Carrasquillo says.

While fraud is cited as a potential concern with the program, Carrasquillo emphasizes that people are making a securities investment

“Some of the detractors will talk about fraud,” he says. “But by virtue of being a securities offering, the percentage of bad deals is not that different, if not less, than what you will find on a traditional deals that we see every day under the different securities rules in the United States, provided that UCIS makes investors have their capital going through a sourcing of funds and other things that provides a higher level of comfort.”

Carrasquillo says people need to remember that investors are coming to the US to invest capital, develop communities and generate jobs.

“Even though it’s an immigration program, it’s really a true investment that comes at no cost taxpayers,” he says.