A Look at Past Congressional Behavior and the United States EB-5 U.S. Golden Visa Reauthorization Report
On June 30, 2021, the United States residency by investment program, called the EB-5 Immigrant Investor program, lapsed due to a lack of reauthorization from Congress. The American Legal Center, a team of U.S. licensed lawyers and professionals specializing in the EB-5 program out of their offices in Dubai, predicts that the program will once again be renewed by Congress in March. The team at this top immigration consultancy firm has studied past congressional trends on when Congress customarily agrees on a final annual budget and by conducting an analysis of the previously issued Continuing Resolutions (CRs) and approved annual budgets, the team was able to ascertain the likelihood of Congress approving the annual budget at their next congressional session. With reauthorization around the corner, investors will have a short window of opportunity to file their applications for U.S. residency at $500,000.
The EB-5 program was created by Congress in 1990 as part of the Immigration and Nationality Act to stimulate the U.S. economy through job creation and capital investment by foreign investors. The program provides investors the opportunity to obtain U.S. residency by investing $500,000, with which a minimum of 10 jobs must be created for U.S. persons. For nearly 30 years, the EB-5 program has served as a catalyst to the U.S. economy, creating thousands of U.S. jobs per year and injecting billions of dollars of capital investment into the U.S. economy. Since 2015, the EB-5 program has been receiving short-term reauthorizations from Congress.
The EB-5 industry initially expected that the program would be reauthorized with the passage of the federal budget by the end of September 2021. However, Congress passed a CR that prevented a federal government shutdown until December 3, 2021. In December, Congress had the opportunity to pass the annual federal budget; however, a second CR was passed which expires on February 18, 2022. The reason for delays in reauthorization is due to the U.S. Congress's inability to agree on the annual federal budget. Once Congress agrees on the federal budget, the EB-5 Regional Center program will also be reauthorized as it will be glued to the overall budget spending package.
Congressional delays are primarily because of hot topic issues such as President Biden's mandatory vaccination of government workers and other polarizing topics that divide the Democrat and Republican parties. The reauthorization of the EB-5 program is not at the top of the priority list as there are bigger programs that are affected which hinder national security such as new programs in healthcare and military spending. Thus, Congress must act swiftly in passing the federal budget as it falls under their primary duties to govern. With the passage of the federal budget, the EB-5 Regional Center program will soon be reauthorized.
The team at The American Legal Center studied the last 21 years of the congressional record to better understand the behavior of Congress in passing federal budgets. At the start of each fiscal year which occurs on October 1 every year, the U.S. federal government must reach a consensus on the annual budget for federal agencies to implement their programs and service the nation. At the start of the current fiscal year on October 1, 2021, the U.S. government failed to reach a consensus on the annual budget and therefore federal programs, such as the EB-5 Regional Center program, were not reauthorized. In lieu of passing the federal budget, Congress issued a CR, which President Biden signed into law. A Continuing Resolution is a vehicle which provides the government with a short-term funding measure to allow them extra time to continue negotiations on the pending annual budget, while the affected federal agencies operate based on the previous fiscal year budget provisions.
According to the analysis by The American Legal Center, there is a high likelihood that the federal budget will be passed in the month of March or earlier. Over the past two decades, it has become increasingly popular for Congress to issue CRs in place of an approved annual budget at the start of each fiscal year. The last time Congress issued an approved federal budget on time was fiscal year 1998. A study of past congressional behavior shows that Congress often reaches a resolution on the federal budget by the second quarter of the financial year with 83% of the previously issued CRs having a final expiration date of March. Furthermore, 17% of previously issued CRs were full year CRs. A full year CR is issued when Congress cannot agree on the full terms of the annual budget and as such use the previous fiscal year budget to fund that current fiscal year.
While it is possible for Congress to issue a full year CR for 2022, the data does not support the Biden-Harris Administration agreeing to issue a full year CR. Additionally, 2022 is a congressional election year, which makes it more important for the government to reach a clear approval on the final federal spending bill. "We have been in constant communication with our U.S. counterparts, lawyers, and lobbyists active in Washington, D.C. and their unified message is that the EB-5 Regional Center program will be reauthorized in early 2022," says Shai Zamanian, Legal Director of The American Legal Center.
"There is great pent up demand from the Middle East and emerging markets from investors and families looking to start their migration journey to the United States by way of the EB-5 program," says Zamanian, "We expect that there will be a March 2022 rush of applications. We are encouraging all of our clients to be prepared to file their applications as soon as the federal budget is passed so that they can stay ahead of the curve."