First established in 1990, Congress created the EB-5 Program in order to stimulate the US economy by streaming wealth into underserved areas and generating jobs within the labor market.
There are certain guidelines in order to be eligible to apply for the program such as making necessary investment in a US commercial enterprise and planning to create or preserve a minimum of 10 permanent full-time jobs for qualified US workers.
Several rules have been made in order to modernize the current program to reflect fluctuation within the US economy over a period of time. Some of the key changes along with their benefits and drawbacks are outlined below:
Priority Date Retention
The new rule allows for certain EB-5 petitioners to retain the priority date of their approved petition or Form I-526 for use in connection with any subsequent EB-5 immigrant petition. Due to circumstances beyond their control, petitioners with an approved I-526 may be required to file new petitions.
In this event, those petitioners are authorized to keep their original priority date of their approved petition, unless certain exceptions apply. This rule will aid in avoiding delays on immigrant visa processing that would occur with loss of a priority date.
In addition, this rule will essentially keep the immigrant’s “place in line” for visa processing as there continues to be an overwhelming amount of applicants in the EB-5 category exceeding the annual visa quota of 10,000.
Increase in Required Minimum Investment
Under the current program, the standard minimum investment amount for any US project is $1 million, and the minimum investment amount for a project within a US targeted employment area (“TEA”) is $500,000. Effective later this year, the standard minimum will increase to $1.8 million and $900,000 for TEAs to account for inflation.
Nearly doubling the required amount, this investment standard is more favorable as the Department of Homeland Security initially proposed to increase TEA investments to $1.35 million.
In addition, the USCIS is implementing a rule that these investment standards be automatically adjusted every five years to account for inflation. This practice is deemed to promote predictability and consistency within the program.
TEAs are regional areas of the US distinguished as areas of high unemployment or rural areas. Currently, TEA designation is authorized by the state or local government; however, the modern rule grants the USCIS to directly determine which regions constitute as TEAs, stripping state sovereignty in the reviewing process.
There are other specific changes within this category that will ultimately administer foreign investment to areas most in need, creating consistency within the program. Other modifications within the program may impose a risk to US projects located in certain areas by altering or extinguishing qualifications as a TEA.
In the meantime, the USCIS will continue to adjudicate I-526 applicants under the current program rules until the revisions come into effect on Nov. 21, 2019. Until then, foreign investors who wish to be grandfathered under the current program should consider filing immediately.
The adjustments to the program has sparked much discussion on whether the increase in investment amount will affect US project investment as foreign investors may consider other countries with a lower investment amount.
However, some experts believe that the increase will not affect the demand of EB-5 applicants as many individuals are willing to pay the requirements in order to obtain a US visa. Click here to review the full amendments of the EB-5 Program.