On July 24th, the U.S. Citizenship and Immigration Services (USCIS) published a final rule that marks the first significant changes to the EB-5 Immigrant Investor Program since 1993.
The final rule becomes effective on November 21st, 2019.
Changes to the program include:
- Raising the minimum investment amounts.
- Revising standards for specific Targeted Employment Area (TEA) designations.
- Giving the agency the authority to directly manage TEA designations.
- Clarifying USCIS procedures for the removal of conditions on permanent residence.
- Allowing EB-5 petitioners to retain their priority date under some circumstances.
Under the EB-5 investor program, foreign individuals are eligible to apply for conditional legal permanent residency in the United States if they meet specific requirements related to investment into American businesses and commercial projects, such as creating or maintaining jobs for U.S. workers.
The significant changes coming into effect on November 21st include:
Raising the Minimum Investment Amount
As of the effective date of the final rule, the standard minimum investment amount will increase to $1.8 million from the previous $1 million standard. This is the first increase since 1990 and was calculated based on inflation. The rule also maintains the 50% minimum investment differential between TEA and non-TEA designations, subsequently increasing the minimum investment amount in a TEA from $500,000 to $900,000. The rule also mandates that the minimum investment amounts will be automatically adjusted every five years to account for inflation.
Clarifying USCIS Procedures for Removing Conditions on Permanent Residence
This rule changes previous regulations to clarify that certain derivative family members who are lawful permanent residents must independently file to remove conditions on their permanent residence. The requirement does not apply to those members who were included in a principal investor’s petition to remove conditions. This rule should improve the adjudication process for removing conditions by offering changes that provide flexibility in interview locations and adopting the current USCIS process for issuing Green Cards.
TEA Designation Forms
The next rule addresses gerrymandering of high unemployment areas. The gerrymandering of EB-5 investment zones was typically accomplished by combining a series of census tracts to link a prosperous project location to a distressed community, in order to obtain the qualifying average unemployment rate. As of the effective date of the rule, the DHS will eliminate the ability of a state to designate specific geographic and political subdivisions as high-unemployment areas. The rule authorizes the DHS to make such designations directly based on revised requirements in the regulation, which limits the composition of census tract-based TEAs. The USCIS believes that these revisions will ensure TEA designations are done fairly, consistently, and will more closely adhere to the program’s intent to direct investment capital into the most distressed areas of the nation.
Allowing EB-5 Petitioners to Keep their Priority Date
The final rule provides greater flexibility to foreign investors who have a previous EB-5 immigrant petition. With a few exceptions, when they file a new petition, they will be able to retain their original priority date from the previously approved petition.
Previous rule proposals raised the minimum investment from $500,000 to $1.35 million, which stoked fears within the EB-5 community that the higher investment amounts would scare away prospective foreign investors. The new rule seems to be aligned with the Canadian immigrant investor program, which recently raised their minimum requirement from 800,000 to 1.2 million Canadian dollars, which is roughly equal to $900,000.
In a statement, acting USCIS Acting Director Ken Cuccinelli said, “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 high-unemployment areas most in need. This final rule strengthens the EB-5 program by returning it to its Congressional intent.”