U.S. Citizenship and Immigration Services (USCIS) recently published a final rule in the Federal Register making significant changes to the E-5 Immigrant Investor Program.  The EB-5 Investor Program allows individuals and their families to apply for permanent residence in the U.S. by making an investment in a commercial enterprise that creates (or preserves) 10 full-time jobs for qualified U.S. workers.

The final rule is scheduled to take effect on November 21, 2019.  Below is a brief summary on the major revisions.  The rule as published in the Federal Register can be viewed here.

The final rule makes the following major changes to the existing program:

• Increases the minimum investment amounts from $500,000 to $900,000 for investments in Targeted Employment Areas (TEA) and from $1 million to $1.8 million for standard investments;
• Revises the standards for TEA designations;
• Clarifies USCIS procedures for removal of conditions on permanent residence; and
• Provides priority date retention to certain EB-5 investors

Increase in Minimum Investment

The standard minimum investment amount has increased from $1 million to $1.8 million.  This is the first increase we have seen since 1990.  The new regulations also increase minimum investment amount in a TEA from $500,000 to $900,000 to keep the 50% differential consistent with the previous version of the regulation.  The revised rule also allows the minimum amounts to adjust every 5 years to account for inflation.

Changes to Targeted Employment Areas (TEA) Designations

The current regulations allow each state to designate certain geographic and political subdivisions as high-unemployment areas.  The current regulations also allow investors to provide evidence and argument that a specific location should be considered a TEA.

The new regulations, however, vest authority with Department of Homeland Security (DHS) to designate TEAs throughout the U.S.  DHS will not rely on state determinations and will administer a “nationwide standard” to keep designations consistent across state lines.  The new regulations are thought to ensure adherence to congressional intent to direct investment in areas most in need and minimizes political gerrymandering.  From the investor’s prospective, however, the new rule will likely be more restrictive in practice than current availability of TEA designations.

Changes to Procedures for Removal of Conditions on Permanent Residence

The rule clarifies that derivative family members who are not included in the principal investor’s petition to remove conditions must independently file to remove conditions on permanent residence within 2 years of entering the U.S.  Under the current rules, interviews for removal of conditions are generally scheduled at the location of the new commercial enterprise.  However, under the final rule, interviews will be scheduled a the USCIS office having jurisdiction over either the immigrant investor’s commercial enterprise, the immigrant investor’s residence, or the location where the I-829 (Petition to Remove Conditions) is being adjudicated.  This change is expected to allow investors and their families to be interviewed in a location near their residence and will confirm current USCIS process for issuing green cards to derivative family members.

Priority Date Retention

For immigrant investors with a previously approved EB-5 petition, the new regulations will allow them to retain the priority date of their previously approved petition.  This will prove especially useful to investors from China, India, and Vietnam who are currently experiencing a 5 year wait for a visa to become available from the date of filing of the I-526 petition.

Conclusion

The most significant change to impact investors is likely to be the increase in minimum investment.  It is important to note the final rule does not take effect until November 21, 2019 and the existing rules will continue to be in effect for petitions filed before November 21, 2019. For additional questions about changes to the EB-5 regulatory framework or to schedule an EB-5 consultation, please contact Agarwal Law Group [email protected].