U.S. Citizenship and Immigration Services (USCIS) recently released a final regulation that makes significant changes to the EB-5 Immigrant Investor Program. The changes take effect in November 2019.
What is EB-5?
The EB-5 Program was created by Congress in 1990 to stimulate the U.S. economy through job creation and capital investment by foreign investors. Under this program, investors can ultimately obtain permanent residence (“green cards”) by investing in projects that are designed to promote employment and economic growth.
What are the current investment requirements?
The EB-5 visa requires foreign nationals to invest at least $1,000,000 to finance a business in the United States that will employ at least 10 American workers. The investment amount is reduced to $500,000 where the investment is in a TEA (Targeted Employment Area).
What are the new investment requirements?
Starting in November 2019, the investment amounts increase to $1.8 million and to $900,000 for a TEA.
What is a Regional Center?
An EB-5 Regional Center is an entity designated by USCIS that sponsors real estate projects for EB-5 investment by foreign investors. One advantage of a Regional Center is that an investor can use indirect job creation to count towards the 10-job requirement.
How does the new rule affect Regional Centers?
The new eligibility criteria mean that many approved Regional Centers may no longer qualify for EB-5 investment after November 20, 2019. USCIS has decided not to allow approved Regional Centers to seek investment under existing regulations after November 20.
Many in the industry predict Congress will temporarily renew the Regional Center program as it has done many times in the past, but nothing is certain in Washington, D.C
What is a TEA?
Under existing rules, a TEA is a rural area or one that has an unemployment rate of 150% of the national average. States currently have broad authority to designate high unemployment areas, and program rules allow officials to set TEA borders that best reflect local demographics. High-unemployment TEAs can thus extend across multiple census tracts and include areas that are geographically distant from an investment project, but are consistent with regional commuting patterns and economic needs.
How does the new rule affect TEAs?
The new regulations will eliminate state involvement in the designation of TEAs a nd limit TEAs to strictly demarcated areas. USCIS will be authorized to designate high unemployment TEAs and eliminate state involvement.
The new rules will also restrict a TEA to the immediate area around an EB-5 project, such as a census tract or contiguous tracts and adjacent areas. USCIS will no longer permit the inclusion of more remote high-unemployment areas from which U.S. workers may commute to TEA jobs.
This new methodology will mean that it will be more difficult for urban development projects – among the most sought-after by foreign investors – to qualify for the lower EB-5 investment threshold.
For more information, contact Elaine Martin, Immigration Lawyer at +1-214-329-4148 or email@example.com
Elaine Martin has been practising US and global immigration law since 1997. She is an immigrant herself (from Ireland), so has a special understanding of the legal and emotional challenges involved in relocating to a new country.