EB-5 News: Double or Nothing for Foreign Investors

USCIS recently raised the stakes for foreigner investors hoping to gain permanent residence status in the United States through the EB-5 program with a new rule announcement.

Starting November 21, 2019, foreign applicants to the EB-5 Immigrant Investor Program will be required to invest $900,000 in a “targeted employment area” (TEA), a sharp increase from the previous $500,000 requirement. Outside of economically disadvantaged areas, the standard minimum investment level will now be $1.8 million, up from $1 million.

Under the program, qualified entrepreneurs and investors can initially obtain an EB-5 Visa/Green Card, pejoratively called a “golden visa” by some detractors. Upon approval, USCIS grants investors conditional lawful residence (Green Card) in the United States for a two year period and thereafter for life so long as they make the required investment in a commercial enterprise in the U.S. and create (or preserve, under certain conditions) 10 permanent full-time positions for U.S. workers.

The new rule, which was published by U.S. Citizenship and Immigration Services (USCIS) on July 24, 2019, was the first significant adjustment to the program’s requirements since 1993.

With the investment minimums soon to be nearly doubled, the U.S. government will most likely see a substantial rise in EB-5 petition filings leading up to the November 21, 2019, effective date. Prior to this date, USCIS will continue to accept and process petitions under the old investment amount requirements.

USCIS Acting Director Ken Cuccinelli stated that the adjustment to the EB-5 provisions is in response to the notion that the program “has drifted away from Congress’s intent,” which was “to benefit U.S. Workers, boost the economy, and aid distressed communities by providing an incentive for foreign capital investment in the United States.”

The EB-5 program had come under increasing scrutiny with news of projects such as Manhattan’s $25 billion Hudson Yards, which raised over $1 billion of its funding through the EB-5 visa program. It would appear that initiatives such as these are precisely what the USCIS’s new rule is intended to combat.

The current changes, according to Cuccinelli, “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.”

Indeed, gerrymandering was another prime concern of USCIS in drafting the new rule, which addresses the subject specifically. According to the agency, instead of permitting states to designate certain areas as high-unemployment zones, the Department of Homeland Security (DHS) will now “make such designations directly based on revised requirements in the regulation limiting the composition of census tract-based TEAs.”

Another provision in the new rule requires certain derivative family members who are lawful permanent residents — but not those who had been part of the principal investor’s petition — to file separately to remove the conditions on their permanent residence.

Yet another rule change will allow applicants to use the “priority date” of a previously approved I-526 petition for any subsequently filed petition. Sometimes original applications fall through because of failed investment projects or simply too many applications at a given regional center. The new rule is intended to streamline the process for those who have already been approved once, making it easier for them to navigate the process gain and help avoid creating further backlog.

Finally, let’s go back to those all-important investment amounts, which was surely the biggest news to come out of USCIS’s announcement to the EB-5 program. Don’t think those numbers are set in stone. Starting with another adjustment in October 2025, USCIS will begin to revise the requisite investment amounts every five years to account for inflation.

If you need assistance with EB-5s or other related immigration issues, please contact attorney Demian Serianni for more information.