Bob Kraft addresses the $450,000 minimum with derivative relief rumors, explains what is actually happening in Congress at the present, and shares his insight for an EB-5 future post-COVID-19.
Bob Kraft addresses the $450,000 minimum with derivative relief rumors, explains what is actually happening in Congress at the present, and shares his insight for an EB-5 future post-COVID-19.
Hi, everyone, and welcome to our podcast today we have Bob Kraft, visiting us. So great to have Bob on today. He's going to be talking a little bit about some of the rumors that have been going on regarding the EB five program specifically in regards to the Politico article that ran a few weeks ago, also relates to COVID-19.
Unknown Speaker :bots. So nice to have you here today with us.
Unknown Speaker :Oh, thanks. It's great to be here, Jessica. And so you're out in oconomowoc. Office, right, and I'm in our headquarter office in Milwaukee, trying to be responsive to clients that have questions and keep things going. So I appreciate the opportunity to speak to our audience.
Unknown Speaker :Yeah, absolutely. I know we're all doing this remotely and finding new ways to stay connected to each other. So we're so glad that we're able to do this podcast today.
Unknown Speaker :It's different, isn't it? What is it? Yeah, I can't wait so we can get back to work nationally and internationally. full full blast. So I think I think
Unknown Speaker :we're all feeling that way.
Unknown Speaker :Absolutely. It's crazy
Unknown Speaker :so bad regarding the political article that ran a few weeks ago. I know so many people are some people tend to believe the rumors aren't sure what to think. Can you tell us maybe Is there any truth to that and what is I USA his position on the changes stated in that article?
Unknown Speaker :Well, it was dead on arrival, I guess. And with respect to Was there any truth to the idea being floated? It was discussed, not by USA, USA wasn't involved. We were kind of caught off guard. But as soon as a staffer for the senior senators in the government it floated the idea it was shut down right away. It was it was really surprising to us that we are in agreement that more visas are required and needed. So that part of it, were very supportive of although they had a very aggressive number which realistically would never ever see the light of day and are by USA, his position has been first to address the derivative interpretation, which would effectively increase the visas available by three times. So that would be a great step toward really reducing a backlog and the countries that are retrogressed. And also something that is consistent with Congress's original intent that it was 10,000 investor units, not 10,000 visas, so family members were never intended to be counted and that's really put a damper on the program and of course, led to the huge retrogression because of the popularity of the program, reducing the minimum investment number from 900 to 450. Just as a non starter that's less than what we had before. And we were in a support, there had to be an aggressive adjustment to the number. I had not been adjusted since 92. And if you just figured in place should from those years, and then 1000 was a reasonable number and brings it into line with other country investment immigration programs. So I guess just to finish that thought I USA was not involved in it, we did not support it, we would not support it. However, we are working diligently with Congress on derivative relief. We don't see the need and we don't think it's even possible to change the investment amount that was done in we actually support most of what's in the regulations. We're in agreement with a number of the Senate leaders and house leaders that integrity reforms need to be incorporated into the regulations. And we're looking for a long term authorization of three years. And we're hopeful that as part of the economic stimulus discussions which were involved in the EB five will be an important part of the initiative to get the country back to work again, similar to what happened in 2008, provided capital, that wouldn't have become a snap for Eb five and then got us kind of go getting out of that financial collapse back in the 2008 period. And we've seen the same possibility here and we're hard at work trying to convince members of Congress include that, you know, as part of another phase in the efforts that are being discussed the spur the economy, you
Unknown Speaker :mentioned the industry and what I USA is Doing, but what what can others do in the industry to help support us as efforts?
Unknown Speaker :Well, that's a really good question. And we actually had a podcast yesterday for our leadership group, which is going to be distributed to the entire membership of AI USA that will be made available on the AI usa.org. website and the speaker has expertise in lobbying Congress in laid out what local people interested in Eb five, whether it be regional centers, economic development groups, developers, construction companies, etc. Attorneys, how they can approach their local representatives and senators to effectively lobby for improvement in the program, especially in this time of need. So we're asking all members To continue to build their relationship with their local representatives office in and put out a national push to sell the benefits of Eb five and what it really can do at no cost to the American taxpayer to spur economic growth and development to preserve jobs to bring people back to work and get everybody employed once
Unknown Speaker :and what do I guess you see as a future for Eb five, and is there a place for Eb five in a future COVID-19 relief package?
Unknown Speaker :Well, I mean, it absolutely. And you know what? It'll look like Exactly. We don't know yet. But I mean, we're recommending number one derivative relief. So as I said earlier, that would increase the number of visas available by two thirds. And that simple change which is just interpreting the original law correctly. Over the years, for some reason, they begin counting family members. That was not the intent of the law when it was established in 1990. And then 92, the regional center program was a pilot program to make it a little bit easier to qualify from a job creation standpoint. Senator Kennedy was the author of the bill. And he his intent was 10,000 investor units. And then over the years, the program wasn't used to its full extent until probably the mid to late 2000s. And nobody had noticed that during the early years of the program that the US cis was counting family members against the cap. That was not the original intent. So we're asking for just a simple interpretation change to which would have a big impact on the program in a positive way. And we think that's a logical Fair requests, especially given the impact, positive impact that Eb five can have on the economy, to get us out of the ditch. We're looking for some things that Senator Grassley, Senator Leahy looked for which were integrity reforms, to protect investors. And to bring a little more discipline to the program, which protects really everybody. You know, our objective is always been to do it right, be conservative and make sure that the investors receive what they want, that's gain, access the United States and then have their capital returned. And we're one of the few regional centers has been able to do that. And we're also in an elite group, in terms of they're only 8% of the regional centers that are operating today. They have more than 10 years experience 8% It's a small number. And then you put on top of that, the regional centers that have returned capital, gone through five to six, eight to Night, in a very strong way eight to nine, we've been 100%. So we're in a very special class. So anything we can do to protect in bring more discipline to the industry is good for the investor ultimately, and the economic benefit to the country, especially now, and it's been significant over the last many years. And it got us out of help get us out of the 2008 financial crisis. When banks were lending, we became a very important source of capital to get projects initiated moving, and we created a lot of jobs. The new program that we're looking for, with derivative relief would generate 586,000 jobs over a couple year period of time, and bring in almost 100 billion dollars in total capital to the United States a big chunk of that being Eb five but the other is bank financing, construction loans, etc. That would be possible because of the EB five piece, which won't be possible for a while because of the way we've contracted. So I think that will happen the answer to your question and COVID-19. You know, because of the many stimulus packages that are being considered right now the first one was signed, that was a $2 trillion infusion into the US economy. That was great. That's a start. And then they're going to be some add on packages that may address infrastructure, may address urban distressed areas and rural. And we're perfectly positioned and capable of assisting the government in getting the economy going. So exactly what package it might be. We're not sure but we are in dialogue daily with Congress.
Unknown Speaker :And I know you talked a little bit about positive impact and a future for the EB five program and you may have touched on this briefly too, but You know, if there are any members of Congress or staffers currently listening to this podcast, what would you tell them about what the EB five program can do for the US to aid in economic recovery post COVID-19?
Unknown Speaker :Well, I mean, one of the big things right now it's just jab retention and part of the EB five program. One aspect of it, there's a category that allows Eb five money to be placed into businesses that are troubled. But the definition in the regulations is a little tight, and it's a little confusing. So we're recommending an adjustment in language. It's one simple sentence, which will make it easier and clearer for regional centers to bring money into businesses that are trouble right now. And most businesses are to reestablish their job count and also be approved for Eb five status. So that would be a big help. And again, there's no cost to the to the government, it actually makes money for the government. And most importantly, and more importantly, is that it would preserve a lot of the jobs that have been lost allow companies to bring people back. We think that's a very important ask. And one at all representatives of government should be very receptive, you know, the House, the Senate and the White House. There have been discussions with the white house with respect to the benefits of Eb five potentially, as a no cost, very precise strategic driver in certain areas of the economy that are very critical to getting us back, you know, in good shape. So then secondly, we can create new jobs, you know, based on projects that won't be built unless Eb five is allowed to really freely and aggressively participate which That gets back to the derivate of interpretation. So we're not asking at this point for more visas now, it would be wonderful. If we could have 35,000 visas, that would really open things up significantly that would totally wipe out the the backlog, the retrogression issues from a couple of countries open those markets back up again. Because there's a very strong interest in the United States. And I think especially after this worldwide pandemic, that people are starting to think a little differently about going to other countries. You know, passport then becomes a significant asset in terms of having the ability to move to countries that they perhaps feel are safer, maybe have more consistent ideals with how you treat people, more freedom, etc, etc. I mean, there are a lot of reasons people are interesting nights states. So along with that migration comes not only investment in Eb five, but these folks buy homes, they pay for schools, etc, etc buy cars. So it'll be a real plus to the economy. In an ideal world, we'd say, you know, if you really want to get the economy juiced, then let's open up and provide more visas. Let's make it a little bit easier to qualify for the program in prove the processing that the government is currently behind in terms of the US cis organization, which we're also spending time providing feedback to them regarding how five to six is or lagging, eight to nine approvals, etc. So if they could be a little more efficient in opening up a little bit, wow, making sure that the integrity reforms that are Smart, are implemented to protect everybody. It can be a very, very strong part of the economic recovery. And the government actually makes money out of it not only in the processing, but then the taxes that are generated from the EB five investor also adds in the projects that are built add significantly to the US economy. So it's to me there are no negatives with the program. And it just, you know, for some reason, immigration in this country is a very toxic subject, which it shouldn't be. My family originally migrated immigrated from Ireland and Germany. I mean, most Americans, the families, if you trace them back, they came from somewhere else. And that's one of the things that makes the country great because we all create all these great cultures and different perspectives and beliefs. And it's all melded together and you end up with a Very, very strong country in a very great country in a very benevolent country. But we were made up of immigrants. So why it's so toxic? I just don't understand it.
Unknown Speaker :Right, right. You know, and you mentioned first pathway partners. And, you know, I happen to see an article that had recently gone out regarding how people can actually benefit from holding additional types of residency and citizenship during you know, a pandemic such as COVID-19, and how that can help provide security during uncertain times, such as right now. Can you maybe talk a little bit about like what first cafe partners is able to do and able to offer different types of visa programs?
Unknown Speaker :Yes, we actually are involved in a couple different programs. The Granada Investment Program is a really good one for people from countries that are retrogressed and or don't have a tree With the United States, so they can make an investment in Grenada, or in Turkey in projects that qualify, the cost is very reasonable. And then that citizenship granted by those countries allows them to invest in the United States under the E two category, which is a much faster category in terms of access to the United States. So it's very interesting program. And one of the things that's appealing there are two things that are very appealing about the E two, visa is not subject the holders not subject to worldwide tax. And that's always been a big issue with people that are looking at the US Eb five program, which can be mitigated with good tax planning advice. And we recommend that they talk to a tax attorney and based on the country they're coming from. We have people that have expertise, dealing with those countries, and also How to set up the proper mechanisms to mitigate tax obligations to the United States. So it's not as onerous as people think in terms of the tax hit. But under e two, there is no worldwide tax requirements. So that's very popular with a lot of people that might have substantial holdings in other countries and really don't want to get tied into that whole thing. It's also faster because the two applications are processed in the local countries consulate office rather than us cis. In the United States, the consular offices and they're not all the same in terms of efficiency, but they're much faster than us cis. And we built really good relationships with the consulate offices around the world. In many cases, someone can be qualified for it within a nine month period. Time, and that's on the outside, some go much faster than that. So the due diligence is still very important. And that's very similar to Eb five. So lawful funds, make sure that no criminal backgrounds, that type of thing, and the government checks that very closely. We system that, but in terms of the processing itself, those offices aren't as overwhelmed as USC is is so they're very efficient, they're fast and it's it's a great way to go then once you're in the country. You can apply for Eb five if you're looking for permanent residence. visa is good for five years. It can be renewed easily but it doesn't provide the same benefits as a green card does. It's not a green card program. So it's it's a workaround or it's an option for people. We have really good partners, we're working with a very knowledgeable in that area and also in cordata in turn Key. And I visited actually a project in Coronado, we're working with the met the Prime Minister and Cabinet members, and they have a very good solid program there. And it's a, it's a great way to move into the United States quickly, and their processing times very fast. So I we're very pleased with that. And we're excited about the results we've seen already.
Unknown Speaker :Great. Appreciate your thoughts on that. And, you know, as we come to an end here today, I just want to thank you again, Bob, for your time and addressing the rumors. And you know, talking a little bit about the COVID relief COVID-19 relief package and I USA status on that. And did you have any final thoughts for our listeners today?
Unknown Speaker :Yes, there was one other there was an article that was written by an organization out of the West Coast that criticized I USA for being opposed to What came out of the political article, and that's just not true. We did not we were not involved in the 450. And the discussions on 35,000 visas, we knew that it was a non starter. But we are not opposed to more visas. And we've been working hard at changing the derivative interpretation so that those don't count against it. We think that's the best way to go. And it simply is not true that we're opposed to more visas and that was someone trying to get a little bit of press or whatever. And that got out in some circles, but we didn't even acknowledge or respond to it publicly because it was just ridiculous statement. And we've done a good job. I believe that communicating with all our members worldwide, keeping them informed, providing good education, providing updates on what's happening with the law. We encourage people to Join the Association. We have a first year package that's reduced rate. We've had great success since January, building the membership. We're very aggressively talking to Chambers of Commerce and Economic Development groups around the country to build a membership and we've been successful in doing that, in our worldwide membership group has grown as well. So there's a lot of interest in Eb five, and in the USA, and I'm real proud to be involved with it. It does a great organization. It does a great job as an organization on the advocacy standpoint in education. So if you're interested in information, you're not a member, I'd encourage people to go to usa.org and look at the packages available and the benefits of being a member.
Unknown Speaker :Great. Thank you so much, Robin, thank you again for your time today and for your thoughts and providing us with some additional insight.
Unknown Speaker :If you would like to know more about first pathway partners, and how they can help you with a direct Eb five investment, or if you're looking for other visa opportunities such as an E two visa, please contact them directly online at www dot first pathway.com Transcribed by https://otter.ai