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Investors worry US ‘visas to millionaires’ program may soon be overhauled

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  • The EB-5 Immigrant Investor Program — under which foreigners have invested billions of dollars in the U.S. to obtain American green cards — is set to expire in September.
  • Some critics want the immigration program to be scrapped on concerns about fraud, abuse and national security risks.
  • Another contentious issue is how expensive the program should be, amid calls to raise the minimum investment amount to $1.35 million from $500,000.

A popular, yet controversial U.S. immigration program that grants “visas to millionaires” is feeling the heat, weeks before it is up for renewal.

On Sept. 30, the EB-5 Immigrant Investor Program — under which foreigners have invested billions of dollars in the U.S. to obtain permanent resident status in the country — is set to expire. It has helped tens of thousands realize their American dream, but it is facing sharp criticism over misuse as politicians and government officials call for radical reforms and have even suggested scrapping the 28-year-old program.

U.S. Sen. Chuck Grassley wrote a letter to President Donald Trump in June saying that the EB-5 program has become riddled with fraud, while Lee Francis Cissna, director of U.S. Citizenship and Immigration Services has asked Congress to allow the program to lapse, as there have been concerns about fraud, abuse and national security risks.

Selling visas to build hotels

One of the key criticisms about the program is that it was created to direct investment into rural and high-unemployment areas that struggle to get capital and create jobs. Instead, according to Grassley, “big moneyed Manhattan interests” have abused the program.

“The original intent of the EB-5 program was not to develop five-star hotels in Manhattan,” said Brandon Meyer, a partner at Fakhoury Global Immigration. “It was intended for the manufacturing sector, but has instead become the source of funds for real estate developers.”

The EB-5 program works through regional centers that are authorized by the government to raise money from foreigners and direct it to projects that fulfill the criteria of employing at least 10 people. If investments go to “targeted employment areas” — those American neighborhoods that are rural or have high levels of unemployment — then they need only amount to $500,000. If they are in other parts of the country and still fulfill the employment criteria, then investments need to total at least $1 million to be eligible for a green card.

The price may skyrocket

Another contentious issue is how expensive the program should be. There is a call to raise the minimum investment amount of $500,000 to $1.35 million and the $1 million to $1.8 million as there has been no change in the price since the program began in 1990. Those increases account for inflation over the past 28 years, experts said.

The fear that the minimum amount will more than double has led to a mad rush to get people — especially those in places like India and Vietnam — to sign up before the Sept. 30 deadline. “I have spent five of the last six months in India. The run is going to be there for now. India will cross 500 applications easily until Sept. 30,” said Tandon.

Each country is allowed up to 7 percent of the 10,000 visas, issued under this scheme every year, but when other countries do not use their allotted amount, they are given to applicants in other nations who are waiting in line. That is usually China.

India has never used the 700 visas reserved each year for Indian immigrants. Today, the waiting list for a Chinese applicant to get his or her conditional green card is 10 years — up from just two years in 2015 — while for Indian applicants there is a processing time of 18 to 24 months, experts told CNBC.

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