In late September 2016, the U.S. Congress will conduct hearings on the approval of the amendments made to the US EB-5 Immigration Program. However, according to market experts, taking into account the political situation in the United States (upcoming presidential elections), there is a strong likelihood that amendments would not be adopted and the Congress will extend the program for another six months.
Note: Since the very beginning, the program has been repeatedly extended, leaving the basic rules and requirements without significant changes.
Key changes in the program rules, which, according to experts, will have an impact on market conditions of the EB-5 investors and definitely entail a significant change in demand, is increasing the minimum threshold for investment from $500 thousand to $800 thousand (projects located in high unemployment areas) and from $1 million to $1.2 million (other projects).
It is no secret that the main users of the EB-5 program are Chinese investors. To obtain a residence permit in the United States, to educate their children at American Universities, and to be able upon expiration of five years to obtain a US passport and to return back the amount invested in the project is a true “American dream” of an ordinary Chinese businessman. However, difficulties with the withdrawal of capital for payment of the investment fee for the EB-5 program, total control over the movement of citizens and many other features of the Chinese market make the process of obtaining EB-5 visas by Chinese investors an “equation with many variables”. Such big changes in conditions of the program will certainly lead to the reduction of Chinese investors. In this regard, the opening of the Russian market for the EB-5 program is a major strategic initiative. The Russian market has a number of advantages and attractive sides. It is big, it is absolutely untapped and it has a potential for growth. But there is one more non-obvious advantage – at the moment a large number of Chinese businessmen are located in Russia, successfully operate and make investments. That is, in fact, the entry into the Russian market is a continuation of work with the Chinese market - the so-called “plan B,” Denis Karasyov, founder and president of PANGAEA INVESTMENT COMPANY, says.
Another important change in the conditions of the program is a substantial tightening of the requirements for regional centers and investment projects, approved for the EB-5 program (or being approved). That is good news for investors, including Russian investors. Toughening of requirements will primarily lead to a reduction of program investment risks, as high-risk projects, as well as fraudulent schemes will be blocked at the stage of approval a person as a participant of the EB-5 Immigration Program.
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