Potentially Shorter EB5 Investments Terms
Under the Grassley Leahy bill, investors will have the ability to potentially skip over the conditional residency part of the their application process. Do you think that is going to have an effect on the typical five plus year investment timeline, because the I829s might start getting adjudicated in a more consistent and timely manner?
Angelo Paparelli: I-829s are to be adjudicated more quickly based on (the bill's) proposed fund to be created and additional filing fees that are authorized for speedier processing.
Ron Klasko: A important provision in the bill that we were not at all expecting is likely to address an issue that we've all been dealing with; the need to prepare the offering documents for the possibility and likelihood that the EB5 loans might have to go out six, seven or even eight years, which also brings up the issue of redeployment of EB5 funds.
The industry reacted to retrogression by realizing that the money has to be outstanding for a longer period of time (more than five years). All of a sudden, if this bill were to pass and if people were able to come to the US as permanent residents rather than on a conditional residence basis, then the time period when the investors would be able to get their money back would be much shorter.
It will require some revisions in thinking and in drafting of offering documents today to accommodate that possibility.
Angelo Paparelli: Ron, if people were to come in as unconditional permanent residents, would there not have to be a visa number immediately available for them?
Ron Klasko: My reading of what the bill is saying is that once you have sustained your investment for two years, and there was no visa number available for you, and as a result you can't immigrate to the U.S., but by the time there is an immigrant visa number available for you, maybe after two and a half years, if you've already sustained your investment for two years, then you can come in as a permanent resident and not as a conditional resident. Unlike now where you may get here say one and a half or two years after you make your EB5 investment, but then you have to wait two more years to file for your conditional residence, and then wait a year for it to be approved, which comes to about five years without the quota problem.
If you can come directly as a permanent resident because your number isn't available until more than two years, then you will come in two and a half years. That will be much shorter and you're now a permanent resident and you're eligible to get your money back.