EB5 Visa Program News

August 15th 2008

Immigration issues frustrate owners from overseas
Tampa Bay Business Journal - by Margie Manning Senior Staff Writer

PALM HARBOR — A visa program designed to encourage the American dream of business ownership has turned into a nightmare for a businesswoman from the United Kingdom.

Sue Fern, the owner of the business development firm Event Pro-ssss, said she is trapped in the United States, unable to return to England to see her family under provisions of an E-2 visa she acquired 10 years ago in order to start her business. If she leaves the United States, there’s no guarantee she’ll be allowed to return, she said.
She has to extend her status every two years, costing thousands of dollars in legal fees. When she decides to retire or sell the business, she faces deportation.
Fern cannot apply to become a permanent U.S. resident without transitioning to a different visa program that would require a hefty upfront investment.

“We love living here,” Fern said. She and her husband were recruited to the United States by their then-employers in 1993. “I want to continue working and living here, but I’m trapped. I’m a hostage to the system.”

Walking away
The E-2 investor visa was designed to attract persons who could invest “a substantial amount of capital” in a business in the United States, according to the Congressional Research Service. The investor’s enterprise has to be deemed capable of making a “significant economic impact” within five years.

But there’s been a tightening of restrictions on E-2 visa holders since the terrorist attacks on Sept. 11, said Fern and others familiar with the visa process.

Stephen Parnell, managing member of Ireeco LLC, a Boca Raton firm that specializes in visa issues, attributes the change to a groundswell of political pressure against any kind of immigration, legal or otherwise, and a general distrust of foreigners investing in America.

A spokeswoman for U.S. Citizenship and Immigration Services did not respond to a request for comment on E-2 visa restrictions.

Fern said she is “too ornery” to give up her business and go back to England, but David Crowther and Christine Crowther, a British couple who moved here on E-2 visas in 2003 to buy a custom framing business, made a different decision.

The Crowthers faced the same problems as Fern. They weren’t allowed to work outside the shop to supplement their income. They couldn’t get a homestead exemption because they were not permanent U.S. residents, and they could only get temporary driver’s licenses. On Aug. 1, they walked away from their shop, Gallery 2 at The Shoppes at Boot Ranch in Palm Harbor, where they had employed one part-time worker, to return to Europe.

“We reluctantly came to the conclusion that if America doesn’t want two honest, law-abiding, taxpaying people in the country then we will go and live somewhere else that does,” David Crowther wrote in an e-mail.

Reform proposals
There are thousands of business owners in the United States on E-2 visas with the same dilemma, Parnell said.

“It’s something we hear about over and over again,” said Chandra Mitchell-Hancz, Fern’s attorney and an associate handling employment immigration at Neil F. Lewis PA, a law firm in Tampa.

“There haven’t been new immigration laws in eight years. The lines are getting longer, and people are getting frustrated,” Mitchell-Hancz said. “These are educated people. People we want here. We need immigration reform.”

Several proposals related to investor visas surfaced during the current session of Congress, including legislation that would allow up to 3,000 E-2 visa holders annually to qualify for permanent U.S. residency after five years, provided they invest at least $200,000 in an enterprise and create at least two full-time jobs. The measure was introduced last year but stalled in a House committee.

Rep. Kathy Castor, D-Tampa, is reviewing several legislative proposals for immigration reform, according to a spokeswoman for her office. Calls were not returned from the press offices of Sen. Bill Nelson, D-Fla., or Sen. Mel Martinez, R-Fla.

Parnell, who came to the United States in 1991 on an E-2 visa, now calls the E-2 “a very dangerous way to come to the States.”

His company runs a Web site, everyvisa.com, that instead promotes the EB-5 visa, which he called “the visa of choice” for those with $1 million to invest or $500,000 if the investment is in a “targeted employment area” with high unemployment.

There are no TEAs in the Tampa Bay area.

The program requires the investor to create at least 10 new jobs. It allows EB-5 visa holders to become permanent residents of the United States after five years.

Only 800 EB-5 visas were issued out of a possible 10,000 in 2007, Parnell said. The number of EB-5 visas issued this year is expected to be higher, as investors act before the scheduled Sept. 30 sunset of the legislative authorization for the program. An extension has been approved in the House and is awaiting action in the Senate after it returns from recess on Sept. 5, Parnell said.

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Bill HR 5569 to extend the EB-5 program for five years

This bill was finally considered by the House of Representatives by voice vote with very little debate.

The next stage is consideration in the Senate. The Senate has already approved the extension language in a previous funding bill ( however the extension was stripped out of that bill by the House of Representatives ), it looks as though it could be more favorable for HR5569 the stand alone bill. The President then has the final say.

Legislative Update. All immigration provisions have unfortunately been cut from the Iraq war funding bill, including the EB-5 regional center extension. However, a stand-alone bill (HR 5569) is still proceeding nicely in the House of Representatives. It is hoped that the House will approve HR 5569 in early June and that final enactment of an EB-5 extension for five years will occur before the sunset date of September 30, 2008.

New Immigration-Related Amendments Added to War Supplemental Bill

The Senate Appropriations Committee added a range of amendments to the war supplemental bill. A number of these amendments were related to immigration. These amendments include a smaller-scale version of AgJobs, introduced by Senators Craig (R-ID) and Feinstein (D-CA); a three-year returning worker extension for the H-2B temporary worker, program, introduced by Senator Mikulski (D-MD); an amendment that proposes to recapture employment-based immigrants visas and provide for early adjustment filing, introduced by Senators Gregg (R-NH) and Murray (D-WA); reauthorization of the EB-5 investor visa program, introduced by Senator Leahy (D-VT); and a funding program for border security, introduced by Senator Hutchison (R-TX).

Pundits note that many of these introduced amendments may not make it past a full debate in the Senate. However, the introduction of these various measures shows the Appropriations Committee’s interest in reformulating a range of immigration legislations.

The Los Angeles Film Center, will expressly target investments in the motion picture and television industry in Los Angeles County, California. it is intended to benefit the Los Angeles film industry as well as give EB-5 investors an exciting new investment opportunity to obtain EB-5 visa status

There are a number of recent key issues that may be of interest if you are planning to go through the EB5 regional centre route to relocate, retire or work in The United States.

No firm news yet from the USCIS on extension of the program once it sunsets in September; the information we have been given, after talking to various Attorneys and Regional Centers, seems to focus on the difficulty of anything to do with immigration issues in this U.S. election year.

Given the significant increase in immigrants taking the EB-5 route due to the success and popularity of the program, and the fact that it officially expires in September, there are growing concerns about the implications regarding timing of the effective closing date. The limited resources at the U.S. government service centers seem to be an issue.

Re: News from the Programs

Regional Centre Northwest – The current program has filled up faster than expected and it’s not presently known if there will be another available once this one is filled; this may depend on the likelihood or otherwise of the renewal of the EB5 pilot program.

Regional Centre East Coast Metropolis - This centre has been focusing on providing places for those who are ready to go. Places are very limited and it is important to have all necessary documentation in place if you want to invest in this Regional Centre.

Regional Centre Vermont– Changes in ownership may have necessitated the rewriting of key documents causing some delays.

There are issues with the other regional centers which we can cover with you if it would be of help.