5 Things You Need to Know About the New EB-5 Visa Rules
The EB-5 Visa, otherwise known as the Immigrant Investor Program, came into existence in 1990 to stimulate the American economy. Through capital investment in job-creating real estate projects classified as New Commercial Enterprises (NCE’s), immigrant investors can secure conditional U.S. residency for themselves and their qualifying family members. Whilst this is the basic premise of the EB-5 Visa program, the regulations are numerous and are about to change considerably.
Approximately 10,000 EB-5 visas are available every fiscal year, of which not less than 3,000 must be allocated to NCE investor programs within TEA’s (Target Employment Areas) designated to identified Regional Centers in order to help promote economic growth in areas that most need it.
An immigrant investor who files for an EB-5 visa under current regulations, must be able to make a capital investment of either $500,000 or $1.0 million depending on the whether they are investing in a Department of Homeland Security (DHS) approved Regional Centre TEA or in a Non-Regional Centre NCE. In the case of investing in a designated TEA, it is the lower investment threshold that applies. The investment must always be in a new commercial enterprise and it must always either directly or indirectly create no less than 10 full-time jobs within two years of the immigrant being admitted to the United States as a Conditional Permanent Resident. For non-TEA investors, the NCE must directly create 10 jobs, whereas for TEA investors it can be a case of either or.
1. What are the new Final Rule changes to the EB-5 Visa Program?
The principal change arises out of proposed regulatory amendments dating back to 2017. It was proposed that because the current thresholds had not increased since Congress first set the limits in 1990 and they no longer reflect the ‘present day dollar value’ or inflation, that they could increase the investment thresholds from a minimum of $500,000 and £1,000,000 to at least $1.35 million and $1.8 million respectively. These new proposed thresholds would have however closed the gap on both EB-5 program models, with the proposed lower threshold being set at approximately 75% of the value of the non-TEA investment threshold. In the new Final Rule changes published on the 24th July, however, it was revealed that the new thresholds, although still increasing, would retain their almost 50 / 50 differential ratio to each other, and are now set at $900,000 for TEA Investors and $1,800,000 for non-TEA Investors.
2. When do the new rules Apply?
The new rules will be effective within 120 days of being published in the Federal Register, which means they will apply from November 21st this year. For Current EB-5 Applications the DHS have indicated that they won’t deny a petition filed prior to the new rule’s effective date (or revoke an approved petition) based solely on the fact that the underlying investment offerings have been amended or supplemented as a result of the rule.
3. How does this affect Regional Centers and TEAs?
The Regional Center Program was initially designed as a pilot program set to expire after 5 years, but Congress has continued to extend the program to the present day; with the last scheduled extension having been granted on 18th December 2015 before the program lapsed in December 2018. On 25th January 2019 however, and then again on the 25th of February, President Trump signed legislation to reauthorize and extend the EB-5 Regional Center Program and it will now remain effective until 30th September this year.
As of September 2018, there were 886 Designated Regional Centers in the U.S. You can see a list of these, by visiting: Investor Regional Centers.
In the meantime, other noteworthy amendments to the rules affecting Regional Centers are that the State will no longer be able to designate their own TEAs, instead the designation of high unemployment areas will now be administered by the DHS. Further to this, the DHS have modified TEA definitions in that they shall now include only cities and towns with a population of 20,000 or more which are outside of an MSA (Metropolitan Statistical Area, or County) as a specific and separate area that may qualify as a TEA.
4. How Might these new Rules impact the EB-5 Visa Program?
It’s evident with the new investment levels required, that the numbers of EB-5 petitions of either variety may indeed fall. The DHS themselves make the very same impact statement in their fully published rule changes on the Federal Register. However, with 92% of all EB-5 applications typically being petitioned through the Regional Center Programs and only 8% through non-regional NCE investors, the balance of applications might indeed stay the same or arguably tip even further in favor of the Regional Centers.
In any event, whether considered fair or not, the new investment levels have been deemed by the DHS and Congress, to be more in line with current dollar value after some 20 years of remaining static. It is also worth noting that the DHS will now adjust the standard investment thresholds every 5 years.
5. Why should an E-B5 Immigrant Investor hire an experienced immigration attorney?
Navigating through the complicated process of obtaining an EB-5 Investor visa requires expert help, especially with the new rule changes on the immediate horizon. Having an experienced immigration attorney in your corner is highly advisable. Fong Ilagan are experienced in EB-5 Visa Program petitioning and can help you to identify either Regional Center of non-Regional NCE opportunities in the Houston Metro area or beyond. Our attorneys will then be able to handle your case by filing the right paperwork to get the process started and get you on your way to becoming an immigrant investor.
For expert help in reaching your business or family immigration goals, contact the attorneys at Fong Ilagan today, Call: 713.772.2300 or fill out our contact form. The legal team at Fong Ilagan looks forward to assisting you.