Thursday, December 10, 2015

The latest draft of EB-5 legislation: can you handle the truth?

As one of the leading EB-5 business advisory service providers in the country, Artisan Business Group have again carefully reviewed the latest amended draft of the bill (version MDM15J20 of American Job Creation and Investment Promotion Reform Act of 2015), we continue to believe it is extremely important for the Congress and EB-5 stakeholders to work towards a temporary re-authorization of the program so that more time will be allowed to carefully review every specific language and sections of the proposed reform bill.  Here are some of the main concerns we have about the latest draft:

1) TEA determination methods are flawed and unclear, It will terminate many existing and pending projects;

2) Decision making for TEA moves to federal government, away from the states which will cause up to 14 months delay to know if a project is in a TEA;

3) Job methodology methods are unclear and may result in adverse job consequences;
4) Effective dates of various pieces of the proposed legislation will leave many project developers uncertain of how to proceed with pending and existing projects; 

5) Migration agents and promoters cannot practically market a project as being located in a TEA until project approval is received. This will cost agents and promoters a long delay and postpone their income;

6) All current projects being marketed by migration agents and promoters are possibly subject to new TEA and investment level requirements due to unclear and unknown consequences of the proposed language. Practical effect is migration agents will most likely have to stop marketing immediately or risk giving their clients bad information;

7) Many practical and procedural uncertainties of the proposed bill and how implementation will occur;

8) China is the largest EB-5 investor source country. The majority of Chinese investors will not be able to produce 7-year tax records since a new version of personal income tax law in China became effective only starting on January 1, 2014.

Artisan Business Group strongly supports for the inclusion of integrity measures. We urge everyone in the EB-5 community to immediately call your US senators and representatives to express your concerns on the draft bill!  We need a fair and balanced legislation or simply request a temporary re-authorization at this moment!

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