Final Rule introduces substantial changes to EB-5 Investor Program

By:  Ashik Jahan, Esq. and Dorothea Hockel

U.S. Citizenship and Immigration Services (USCIS) published a final rule that makes a number of significant changes to the EB-5 Immigrant Investor Program. The EB-5 program allows individuals to apply for a Green Card in the United States if they make an investment in a corresponding U.S. area and create, or preserve, 10 full-time jobs for qualified U.S. workers. The  final rule contains the following changes to the nearly 30 year old program:

  • Increased investment amounts: The required minimum investment amount in a “targeted employment area” (TEA) increases from $500,000 to $900,000 and for non-TEA investments from $1 million to $1.8 million. In addition, the rule provides that the minimum investment amounts will automatically adjust for inflation every five years, beginning from the effective date of the regulation on November 21, 2019. According to USCIS, the increase will ensure that the EB-5 program requirements are going to reflect the present-day dollar value of the original investment established by Congress in 1990.
  • More oversight over TEA designations: As a result for facing the risk of manipulation of TEA designation by states, the final rule takes a state’s power away to designate certain geographic and political subdivisions as a TEA. Instead, the Department of Homeland Security (DHS) will make such designations directly based on revised requirements to ensure a fair selection procedure for directing foreign investments to the areas most in need. Moreover, only cities and towns with a population of 20,000 or more outside of metropolitan statistical areas are included as a specific and separate area that may qualify as TEA based on high-unemployment.
  • Removal of Conditions: The final rule clarifies the process for removing conditions on permanent residence for family members. Any derivative family member must independently file their petition to remove conditions on their permanent residency when they are not included in a petition filed by the principal investor.
  • Priority date retention: An immigrant petition’s priority date is the date on which the petition was properly filed. The final rule now authorizes certain EB-5 petitioners to retain the priority date of a previously approved EB-5 petition to help them avoid delays on immigrant visa processing related with loss of a priority date.

This is the first major revision of the EB-5 program’s regulations since 1993. The new rules are supposed to provide more certainty regarding the eligibility criteria for foreign investors and their family members. The final rule becomes effective on November 21, 2019. Between now and this date, it is anticipated that a high volume in EB-5 petitions will be submitted to take advantage of the lower investment thresholds for the EB-5 program.  This likely surge may also create significant backlog in the near term as well.

DHS has also emphasized that petitions filed prior to this effective date will not be denied solely on the fact that the underlying investment offerings have been modified to ensure compliance with applicable securities laws because of the increase of the minimum investment amounts resulting from this final rule.

Should you have any questions about the EB-5 Immigrant Investor Program, please contact Ashik Jahan at ajahan@hallboothsmith.com or (404) 954-6971.