On January 13th
, the U.S. Citizenship and Immigration Services Department of Homeland Security (DHS) published a notice of proposed rulemaking to amend the current EB-5 Immigrant Investor Program regulations in areas in need of reform.
After two consecutive short-term extensions following the initial program expiry date of September 30th
2016, the EB-5 is finally set to expire on April 28th
2017. The proposed amendments, once approved, would come into force after this date.
The following is a discussion of the major revisions to the EB-5 program regulations.
- Priority date retention
DHS proposes to allow certain EB-5 applicants to retain the priority date of their approved EB-5 immigrant petitions for any subsequent EB-5 immigrant petitions. This new rule applies to applicants with approved immigrant petitions who may be required to file new petitions for reasons out of their control, or who wish to do so for other reasons such as changing their investment to a more viable investment option. For instance, the original petition’s related Regional Center may be terminated, in which case the EB-5 applicant can retain his/her priority date for a new petition in order to avoid further delays.
- Increased investment amounts
DHS proposes to increase the minimum required investment amounts for all new EB-5 applicants. The proposed increase reflects the current dollar value of the investment amounts that were originally established by Congress in 1990. The standard minimum investment amount for new enterprises established in high employment areas would increase from USD $1 million to USD $1.8 million to account for an inflation adjustment from 1990 to 2015. The minimum investment amount for businesses in a Targeted Employment Area (TEA) would increase from USD $500,000 to USD $1.35 million. Further, DHS proposes to make adjustments to the minimum investment amounts every five years, starting the date the new regulations come into effect.
Increasing investment amounts has both benefits and drawbacks. Raising the investment amounts could potentially increase the total amount invested under the EB-5 program as a whole. On the other hand, new investors may be unable to afford or unwilling to invest the higher proposed investment amounts. For Regional Centers, higher investment minimums would imply that fewer investors would be required to pool the required amount of capital for a project. However, fewer investors may mean that fewer jobs are created. The increased investment amounts have to take all scenarios into consideration all the while maintaining the interest of foreign investors in the U.S.
- TEA designations
DHS proposes to reform the procedure for designating a Targeted Employment Area to allow for consistency in TEA adjudications. The first change would allow any city or town with high unemployment and a population of at least 20,000 to qualify as a TEA. Presently, the only way for a city of town to be designated as a TEA would be for its state to designate it by providing evidence to the potential EB-5 investor through a Form I-526 petition
. The second change would no longer allow states to designate certain geographic areas as high-unemployment areas. Designations would have to be made directly by DHS at the federal level using specified standards. This proposal would assist in the elimination of inconsistencies in high unemployment area designations between and even within states. In addition, it will ensure that the reduced investment amount would be reserved for businesses located in areas with high levels of unemployment.
- Removal of conditions
DHS proposes that those family members who are not included in a petition to remove conditions filed by the principal applicant must file their own separate petitions to remove conditions. Further, in an effort to improve the adjudication process for removing conditions, DHS proposes to provide flexibility in interview locations. Currently, interviews for Form I-829 petitions are generally scheduled at the location of the new commercial enterprise.
- Miscellaneous changes
Finally, DHS proposes to update the regulations to clarify definitions of the program’s key terms, as well as to reflect any changes made to the program since the first publication of the regulation in 1991. These updates to the program regulations will allow investors and their immediate families to assess their eligibility with more certainty.
The EB-5 Program Continuing Resolution
is coming to an end and regulation amendments are inevitable. Although many of the changes are intended to protect the applicant, the proposed minimum investment for businesses located in TEAs will be increasing drastically from US$500,000 to US$1.35 million. If you would like to file an application under current regulations, now is the time to do so. April 28th
is fast approaching and we are ready and eager to assist you. Our office has extensive experience with the EB-5 Immigrant Investor Program with a proven track record of success. Get in touch with us today to start your U.S. immigration process.
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