Written by: Taher Kameli, Esq.
Under the EB-5 program, immigrants who invest $500,000 in a project located in a “targeted employment area” (generally rural areas and areas with high levels of unemployment) (“TEA”) that creates 10 full-time jobs generally can qualify to receive a green card, and permanent lawful resident status, in the United States. As the EB-5 program has been popular, the announcement in January, 2017 that new regulations would be issued concerning the EB-5 program drew significant attention. After well over 2 years, the wait for these new regulations is finally over. On July 23, U.S. Citizenship and Immigration Services (“USCIS”) announced that it will publish a new rule on July 24 that significantly revises the EB-5 program.
In announcing publication of the new rule, USCIS Acting Director Ken Cuccinelli stated, “Nearly 30 years ago, Congress created the EB-5 program to benefit U.S. workers, boost the economy, and aid distressed communities by providing an incentive for foreign capital investment in the United States. . . . Since its inception, the EB-5 program has drifted away from Congress’s intent. Our reforms increase the investment level to account for inflation over the past three decades and substantially restrict the possibility of gerrymandering to ensure that the reduced investment amount is reserved for rural and high-unemployment areas most in need. This final rule strengthens the EB-5 program by returning it to its Congressional intent”.
Probably the most noteworthy change under the new rule is a significant increase in the minimum investment amount under the EB-5 program from $500,000 to $900,000 for projects in a TEA and from $1,000,000 to $1,800,000 for the less common situation of projects not in a TEA. These changes represent the first increase in the applicable EB-5 program minimum investment amounts since 1990. The new rule also provides that the minimum investment amounts will automatically adjust for inflation every 5 years.
Another key change under the new rule concerns how TEAs will be determined. The new rule eliminates the ability of a state to designate an area as “high-unemployment” (a key part of the definition of a TEA); instead, these designations would now be made by the Department of Homeland Security.
It is believed that the Department of Homeland Security will be less permissive than the states have been in combining census tracts to “gerrymander” an area as “high-unemployment”. In addition, under the new rule, only cities and towns with a population of 20,000 or more that are outside of “metropolitan statistical areas” may qualify as a TEA (based on “high unemployment”).
Other modifications to the EB-5 program under the new rule are that certain EB-5 petitioners can retain the “priority date” of an approved EB-5 immigrant petition for use in connection with any subsequent EB-5 immigrant petition, and derivative family member EB-5 program beneficiaries must file their own petitions to remove conditions on their permanent residence when they are not included in a petition to remove conditions filed by the principal EB-5 investor applicant.
The new rule is effective 120 days after its publication on November 21, 2019. It is expected that there will be a surge of new EB-5 program filings before November 21, as immigrants try to take advantage of the “old” rules governing the EB-5 program, including, in particular, to try to save $400,000 of investment funds ($500,000 vs. $900,000).
Over many years, Kameli Law has successfully represented many immigrant investors and their family members to obtain green cards under the EB-5 program.
With this experience, Kameli Law has the necessary expertise to understand and answer questions about, this new rule significantly revising the EB-5 program. With this experience, Kameli Law has the necessary expertise to file any petition under the EB-5 program, whether to take advantage of the “old” rules governing the EB-5 program before November 21 or under the new rule governing the EB-5 program thereafter. Please contact Kameli Law, at firstname.lastname@example.org or 312-233-1000, for legal assistance under the EB-5 program or with any other immigration issue.