On July 24, 2019, the United States Citizenship and Immigration Services (USCIS) published a final rule that made significant changes to the EB-5 Immigrant Investor Program. The final rule will become effective on November 21, 2019.
As the first significant revision of the program since 1993, the final rule makes the following changes:
- Raising the minimum investment amounts: The standard minimum investment level will increase from $1 million to $1.8 million to account for inflation. The rule keeps the 50% minimum investment differential between a Targeted Employment Area (TEA) and a non-TEA, thereby increasing the minimum investment amount in a TEA from $500,000 to $900,000. Lastly, the final rule states that the minimum investment amounts will automatically adjust for inflation every five years.
- TEA designation reforms: the Department of Homeland Security (DHS) will eliminate a state’s ability to designate certain geographic and political subdivisions as high-unemployment areas and DHS will instead make these designations based on revised requirements in the regulation limiting the composition of census tract-based TEAs.
- Clarification on removing conditions on permanent residence: The final rule will make revisions to make it clear that certain derivative family members who are lawful permanent residents must independently file to remove conditions on their permanent residence. This requirement would not apply to family members who were included in a principal investor’s petition to remove conditions.
- EB-5 petitioners allowed to keep their priority dates: If an immigrant investor has a previously approved EB-5 immigrant petition, they will generally now be able to retain their priority date, subject to certain exceptions.
Potential Impacts
The increase of the minimum investment amounts for the EB-5 program may lessen the amount of foreign national investors who can afford the minimum investment amounts. In the past, investments in TEAs – rural areas or other areas designated by state governments as high-unemployment regions – were seen as more feasible options since investors had to only meet 50% of the minimum investment amount for the EB-5 program ($500,000). However, with the final rule, the increased minimum investment amount will be $900,000 and DHS will take over the authority from state governments to designated areas as TEAs. Placing this authority in the hands of DHS may result in slower designation times for TEAs.
Please do not hesitate to contact our offices with any questions regarding this matter.