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Recent activity in the Securities & Exchange Commission( SEC) enforcement
The SEC enforcement action against the Intercontinental Regional Center Trust of Chicago and its affiliated companies may have broad implications for the EB-5 program. The judge denied the motion of the defendants Chicago Convention Center to dismiss for lack of jurisdiction and / or for failing to state a claim. The defendants said that the securities were sold overseas( almost exclusively in China) and therefore SEC has no jurisdiction.
The judge used three tests to come to her decision:
• The“ conduct test”;
• The“ effect test”; and
• The“ transactional test” The results of these tests were as follows:
• Using the prospect of gaining U. S. residency through the EB-5 program satisfied the“ conduct test”
• A minimum investment of $ 500,000 which creates or preserves 10 jobs for U. S. workers satisfied the“ effects test”
• The signing or accepting the subscription agreement in the United States satisfied the“ transactional test”
It will be important to all regional centers to be aware of this important development and govern themselves accordingly.
EB-5 Impacts on Job Creation
& Economic Stimulus Study Results for 2010-2011 *: 33,000 jobs supported $ 2.7 billion contribution to GDP
If 10,000 EB-5 Visas are used: 83,000 jobs supported $ 6.6 billion contribution to GDP
With a change in the law and 20,000 EB-5 Visas are used: 166,000 jobs supported $ 13.2 billion contribution to GDP
Tax Revenue Spending by EB-5 investors contributed $ 347 million to federal tax revenues and $ 218 million to state and local tax revenues.
* Information from report by IIUSA in collaboration with IMPLAN Group LLC.: Economic Impacts of the EB-5 Immigration Program 2010-2011 Report.
EB-5 Processing Statistics Q1 and Q2 2013
• I-526s: 3,285 received, 1,526 approved, 483 denied
• I-829s: 427 received, 467 approved, 24 denied
• I-924s( includes amendments and initial designation): 325 received, 65 approved, 13 denied
EB-5 Visa Usage and Projection
The September 2013 Visa Bulletin issued by the visa office of the State Department shows that the EB-5 category is current for all countries. The maxing out of EB-5 visas for Chinese nationals in the fiscal year ending September 30, 2013 is unlikely. There is a high probability that China will reach the maximum number of EB-5 visas in FY 2014, unless the U. S. Congress changes the allocation of immigrant visa numbers.
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David Hirson is a Partner at the global immigration law firm of Fragomen, Del Rey, Bernsen & Loewy LLP, which is recognized as the leading global immigration service provider. Immigration law is not just a practice area within the Firm – it’ s the Firm’ s only practice. In 2012, David’ s office was selected as the EB-5 Immigration Law Firm of the year.
David Hirson
Contact information for David Hirson: dhirson @ fragomen. com + 1 949 660-3504
36 EB5 Investors Magazine