Investors at various stages in the EB-5 process face risks during this economic crisis. The greatest immigration risk is for projects in the beginning phase of construction. Investors whose projects have been built and who have met job creation requirements, could lose much of their capital.
Though saved from Trump’s Green Card ban, EB-5 investors still face the threat of COVID-19 to their dreams and investment capital. Several prominent EB-5 immigration lawyers have weighed in on what is at stake for investors at different places in the EB-5 timeline.
Lawyer Ronald Fieldstone says that projects just starting construction are the most susceptible: “If they stop for too long you could have a problem, because you have to have, under the law, continuous construction.”
EB-5 investors with pending petitions may have to tell US. Citizenship and Immigration Services (USCIS) of any major changes to their project. If U.S.C.I.S. determines the changes are too much, an investor may have to give up their place in line and file a new petition.
Fieldstone hopes that the major changes that impact construction brought on by the pandemic may be accepted by USCIS as a force majeure, an unforeseeable and uncontrollable event. But this does not absolve EB-5 projects that completely default. “It becomes an immigration risk if you never complete the project,” he declares.
Another immigration lawyer, Chad Ellsworth, expounds on this issue: if a petition is already approved, project failure by itself won’t ruin an investor’s petition, but it could do so if the petition is still being processed.
Those EB-5 investors who have already met job creation requirements in a completed project are still susceptible to the financial impact of the pandemic. If an investor invested in a retail or hospitality sector, the risk is real. Operations are severely challenged when a business can’t allow customers to enter. “Anyone who owns a hotel is having a hard time right now operationally,” says immigration lawyer Robert Divine.
So even meeting their Green Card requirements isn’t enough for would-be U.S. residents who placed their life savings in an investment project that’s gone under. They may only see “pennies on the dollar” returned to them, warns lawyer Rohit Kapuria. “That’s the panic that we’re beginning to see from investors.”
While the lawyers have different perspectives on the amount of activity the program is seeing right now in the midst of a global health and economic crisis, and just months after a significant investment-amount increase, they agree on what EB-5 means to America right now. “EB-5’s the reverse of a drain,” states Fieldstone. “It’s money coming in, jobs being created.”
Read source story (subscription needed) “Shielded From Green Card Ban, EB-5 Investors Still At Risk”
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