Congress has extended the EB-5 Investor program temporarily until September 30, 2017. The EB-5 program allows foreign investors who are interested in obtaining U.S. permanent residence or a “green card” by investing $500,000 or $1 million through a regional center. The conditional green card issued for 2 years initially. The EB-5 program is the most popular immigration program in the world.
The Department of Homeland Security (DHS) proposes to amend its regulations governing the employment- based, fifth preference (EB–5) immigrant investor classification and associated regional centers to reflect statutory changes and modernize the EB–5 program.
In general, under the EB–5 program, individuals are eligible to apply for lawful permanent residence in the United States if they make the necessary investment in a commercial enterprise in the United States and create or, in certain circumstances, preserve 10 permanent full-time jobs for qualified U.S. workers. This proposed rule would change the EB–5 program regulations to reflect statutory changes and codify existing policies. It would also change certain aspects of the EB–5 program in need of reform.
Current DHS regulations do not permit investors to use the priority date of an approved EB-5 immigrant petition for a subsequently filed EB-5 immigrant petition.
The standard minimum investment amount has been $1 million since 1990 and has not kept pace with inflation.
Further, the statute authorizes a reduction in the minimum investment amount when such investment is made in a TEA by up to 50 percent of the standard minimum investment amount.
Since 1991, DHS regulations have set the TEA investment threshold at 50 percent of the min-imum investment amount. Similarly, DHS has not proposed to increase the minimum investment amount for investments made in a high employment area beyond the standard amount.
DHS proposes to allow an EB-5 immigrant petitioner to use the priority date of an approved EB-5 immi-grant petition for a subsequently filed EB-5 immi-grant petition for which the petitioner qualifies.
DHS proposes to account for inflation in the investment amount since the inception of the program. DHS proposes to raise the minimum investment amount to $1.8 million.
DHS also proposes to include a mechanism to automatically adjust the minimum investment amount based on the unadjusted CPI—U every 5 years.
DHS proposes to decrease the reduction for TEA in-vestment thresholds, and set the TEA minimum in-vestment at 75 percent of the standard amount. Assuming the standard investment amount is $1.8 million, investment in a TEA would initially increase to $1.35 million.
DHS is not proposing to change the equivalency be-tween the standard minimum investment amount and those made in high employment areas. As such, DHS proposes that the minimum investment amounts in high employment areas would be $1.8 million, and follow the same mechanism for future inflationary adjustments.
• Makes visa allocation more predictable for investors with less possibility for large fluctuations in visa avail-ability dates due to regional center termination.
• Provides greater certainty and stability regarding the timing of eligibility for investors pursuing permanent residence in the U.S. and thus lessens the burden of unexpected changes in the underlying investment.
• Provides more flexibility to investors to contribute into more viable investments, potentially reducing fraud and improving potential for job creation.
• Not identified.
• Increases in investment amounts are necessary to keep pace with inflation and real value of investments;
• Raising the investment amounts increases the amount invested by each investor and potentially increases the total amount invested under this program.
• For regional centers, the higher investment amounts per investor would mean that fewer investors would have to be recruited to pool the requisite amount of capital for the project, so that searching and matching of investors to projects could be less costly. Costs:
• Some investors may be unable or unwilling to invest at the higher proposed levels of investment.
• There may be fewer jobs created if fewer investors in-vest at the proposed higher investment amounts.
• For regional centers, the higher amounts could reduce the number of investors in the global pool and result in fewer investors and thus make search and matching of investors to projects more costly.
• Potential reduced numbers of EB-5 investors could prevent projects from moving forward due to lack of requisite capital.
Projected investment amount revisions
Projected investment amount based on average inflation scenario 1.4%
Projected investment amount based on inflation scenario 3.2%