Discussions continue about potential changes to the EB-5 program and the possible introduction of Trump’s $5,000,000 Gold Card.
At our recent EB-5 and Global Immigration Expo in Vietnam, panelists shared their insight about the U.S. immigration developments and what we might expect.
Unlike the EB-5 program, Trump’s gold card investors would most likely have to be exempt from global taxation, otherwise it wouldn’t attract the right people, many industry professionals say.
“The problem is that the people with $5,000,000 do not want to be subject to U.S. taxation,” said attorney Robert Cornish Jr. “The other thing they don’t want is to be subject to the jurisdiction of a U.S. court. One thing about being a US citizen is that you are part of the system, and that means you agree to be part of all of the things that go on. And that includes our legal system. There are so many constitutional issues about creating this class of people who are just treated differently in the law. Even if the program was passed, I’m not even sure it would meet constitutional muster.”
Why Gold Card and EB-5 investors are different?
TJ Kang from Bether Capital clarified that both immigration initiatives would have different purposes if they were to coexist.
“In EB-5, the $800,000 goes into a fund that funds some kind of development in the U.S., which creates jobs. And that’s its primary purpose. You have this type of program that’s been very successful and raises billions of dollars in foreign capital going into the U.S., which I would assume is a good thing for the U.S. economy.”
The gold card, on the other hand, would involve a higher amount without a return on their investment, he said.
“It goes to the Treasury. They’re going to use it for whatever purpose. And so, the markets for these two types of investment or immigration products are completely different,” Kang added.
Jonathan Bloch from Even, Cohen & Jessup explained that there are not “10,000 wealthy investors” interested in the gold card, a number President Trump stated when announcing it in February.
“There might be ten people out there that want to do this. There are not 100. There are not 1,000. Interestingly enough,” Bloch said.
Can Trump replace the EB-5 program with the U.S. gold card?
The EB-5 professionals said the Trump Administration could not eliminate the current EB-5 program without Congressional approval.
“The bottom line is to get a new immigration program passed on; it takes Congress. It cannot be done by an executive order,“ Bloch said. “You cannot take away the EB-5 program by a swipe of a pen or an executive order because it was enacted by Congress, and the majority vote in Congress cannot be removed or rescinded by the president through an executive order.”
However, Kang advised investors to prepare for the possibility that the EB-5 program could be modified by Congress.
“While the EB-5 program is in place and is business as usual from that perspective, I don’t think we should discount the possibility that at some future date, there might be some changes coming, such as saying they’re going to increase the amount,” he said. “I know that requires some other legislation change, but that’s not beyond. I don’t think it’s necessarily beyond their power to do that if they wanted to. So, for clients and investors and agents, uncertainty is not good from that perspective. I think acting now versus later is probably what most people should take away.”
He also recommended that investors “get different assurances from their project in case something was to happen, like a commitment from the developer to return the money.”
2027 is a crucial year for the continuity of the EB-5 visa program
The EB-5 program will continue working legally until September 2027, as determined in the reauthorization through the Reform and Integrity Act of 2022 (RIA), they said.
Attorney Nicolai Hinrichsen from Miller Mayer said that no matter what happens with the Gold Card, the RIA contains a ‘grandfather provision’ that protects EB-5 investors until Sept. 30, 2026. He said all applications that meet the program’s requirements submitted by that date will be considered compliant.
“We don’t know what will happen between now and then, but we are certainly filing cases, getting approvals, and getting green cards,” Hinrichsen said. “It’s a lawful, functioning program for the time being,” he said.
However, Congress must vote to reenact the EB-5 program in 2027, the same year as the U.S. mid-term elections.
“2027 is going to be an important year,” Bloch said. “The elections will be critically important and could affect everything.”
Cornish explained: “Historically, mid-term elections mean the party in control generally loses them. That’s always been the conventional thinking. If you believe in conventions, you should expect a change in control in Congress, which could be positive for EB-5.”
Cornish also pointed out that the EB-5 program has brought jobs and capital to the states where many of Trump’s voting base live.
“One of the things that incurred in the RIA was the rural set aside of visas. That has allowed for expedited processing for hundreds of people who want to come to the United States and it has brought jobs to the States and to the places that are really intensely Pro-Donald Trump,” he said. “I would say the EB-5 program will likely be reauthorized.”
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