August 16

What The New EB-5 Changes Mean For Investors And Regional Centers

The EB-5 visa category was developed by the United States Congress in 1990 to stimulate the U.S. economy through job creation and capital investment by foreign investors.

The underlying policies of the EB-5 investor visa were designed to benefit the U.S. economy in general, including economically disadvantaged communities, American workers and attract foreign-national investors. The goal of the EB-5 investor visa program is to generate a “win-win” scenario for all parties involved or affected.

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However, the USCIS took this great idea and made it complicated. The EB-5 visa program has been very successful for both the American economy and foreign investors. It has created a lot of jobs and helped in low employment areas. Since 2008, this program has resulted in an estimated $22 billion in foreign direct investment into the U.S. economy and created about 276,000 jobs, according to the EB-5 trade group, Invest In the USA (IIUSA).

On July 24, 2019, USCIS published a final rule amending Department of Homeland Security (DHS) regulations governing the employment-based, fifth preference (EB-5) immigrant investor classification and associated regional centers. This final rule comes into effect on November 21, 2019.

5 Key Changes to The EB-5 Investor Visa

  1. Increase in the minimum Targeted Employment Area (TEA) investment from $500K to $900K.
  2. Increase in the minimum non-TEA investment from $1M to $1.8M.
  3. The Department of Homeland Security will centrally designate TEAs.
  4. TEAs will only be able to include “directly adjacent” census tracts to the census tract of the project.
  5. Effective Date: November 21, 2019 – Any I-526 petitions filed before this date will be grandfathered under the current rules and lower investment amount of $500K for TEA projects.

Centrally Designated TEAs

The DHS has decided to try and take control of TEA designations. This means that instead of going to the Census Bureau or the state agency, DHS wants to make decisions on behalf of the states.

Central control over TEA designations will lengthen the process and make it less efficient. The states have benefited enormously from EB-5 investment projects and are fighting the decision to centralize TEA designations.

Change in Investment Amounts 

Targeted Employment Areas (TEAs) are rural or high unemployment areas that are usually designated by the state. The investment rate for those areas is being raised from $500k to $900k.

In all other areas, such as cities, with low unemployment rates, the minimum investment threshold for those projects is being raised from $1m to $1.8m

With DHS centralized control over TEA designations, there will inevitably be less of the lower investment properties available. The lower investment properties will go quickly. So, essentially, the investment amount will go from $500k to $1.8k for a lot of different investors and increase delays for certain countries.

Effective Date and Investing at the Lower Rate

The new law doesn’t go into play until November 1, 2019. If you want to secure an EB-5 visa, now is the time before it gets a lot more expensive and complicated.

We help secure visas for many diverse projects. For example, in one case, a client bought a hotel/motel chain.  Similarly, we help people that work through regional centers. For the regional centers, we partner with brokers to have them advise the client on the best investment projects.

About the author: Jon Velie has practiced Immigration law since 1993. He is CEO of OnlineVisas

Jon is an Amazon number one best-selling author of H-1B Visa: Application & Approval, is regularly covered by major media and has won a number of international awards. Jon was also pivotal in the Cherokee Freedmen Supreme Court case.

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