On November 21, 2019, a new set of regulations for the EB-5 investor visa came into effect. Shortly after, the government extended the Regional Center Program through September 20, 2020. Although the new regulations bring stricter requirements to the EB-5 visa, the extension of the Regional Center Program has been of great benefit to EB-5 petitioners. These petitioners would have otherwise been required to compile the data surrounding the various new requirements on their own, a task which an approved regional center completes on behalf of its petitioners.
In this article, we’ll be breaking down the old regulations in comparison to the outline of the new regulations.
EB-5 minimum investment amount
One of the major changes to the EB-5 investor visa is the minimum and maximum investment amounts. The previous minimum amount (for Targeted Employment Areas) was USD$500,000, while the maximum amount (for non-TEAs) was USD$1 million. The increase in the amounts has been significant, with the current minimum amount being $900,000 and the higher investment at $1.8 million. This is an increase of $400,000 for the minimum and $800,000 for the maximum.
Although this increase may seem drastic, the EB-5 investor visa has been around since 1990 with no changes made to the investment amounts since its inception. The rate of inflation has continued to go up, but in almost 30 years of consistent regulatory changes, no investment adjustments were made. This large increase is USCIS’ way of ‘catching up’ in one major step as opposed to slowly increasing the amounts over time.
New TEA designation criteria
Targeted Employment Areas (TEAs) are those areas that the government viewed as being either rural or having a high-unemployment rate. Rural TEAs were considered as such if they were outside of the outer boundary of a city or town with a population over 20,000. A high-unemployment TEA was classified as an area that had an unemployment rate that was 150% of the national unemployment average. These specifications have been adjusted in two major ways.
- TEAs were previously assigned by the state based on census tracts. New regulations dictate that all TEAs will now be assigned only by the Department of Homeland Security. This is evidently being done to prevent states from manipulating census tract data in order to arbitrarily assign TEA status to an otherwise un-eligible area.
- Cities and towns outside of a metropolitan statistical area (MSA) with a population of 20,000 or more may now be eligible for TEA status under the high-employment category. The TEA must also be in the immediate environment of the project, such as adjacent census tracts.
Priority date retainment
In the old regulations, each new EB-5 petition generated a new priority date, even if the applicant was re-submitting an application due to project changes or other factors. The new regulations allow for EB-5 petitioners to keep their priority dates, even with re-submissions, as long as the petition was not rejected by USCIS due to fraud, misrepresentation, or material error. This will allow for fewer fluctuations in visa availability dates and prevent petitioners from having to wait longer to receive their visas. This is especially significant for petitioners in countries with visa backlogs that cover several years.
Removing conditional status
Confusion regarding the removal of conditional status after visa approval was the motivation behind this next regulation amendment. Previously, the regulations were not clear on how to handle various issues surrounding the application for removal of the conditional status from the permanent residency of the EB-5 petitioner and any dependents. Now, certain family members that apply on the same petition as the EB-5 investor must file individual petitions to remove conditions on permanent residency. The exception to this rule is for family members who were included in the EB-5 investor’s petition to remove conditional status.
The new regulation further clarifies:
- “A child who is 21 and got married during the conditional permanent residence period may be included in the investor’s petition or file separately. The same applies to a former spouse who became divorced during the conditional permanent residence.
- If the principal investor is deceased, the children and spouse may be included in one petition or file separately.”
Investment increase timeline updated
From now on, every five (5) years, the investment amounts will be increased to cater for inflation and other economic factors that may contribute to the need for an increase. These increases will be made in line with the Consumer Price Index, which measures the price level of average market services and consumer goods and provides a statistical estimate of price changes in these items over a period of time. Again, this is being done to prevent another large increase from being made all at once, allowing for potential investors to better predict the amount they will be required to invest.
What do these changes mean for investors?
While these changes make it slightly more difficult for projects to be classified as TEAs and for investors to afford the higher investment, all in all, they are necessary for the U.S. government. These adjustments bring the EB-5 investor visa more in line with its original intent of creating jobs and stimulating the U.S. economy.
A positive for investors? There is currently stiff competition for the EB-5 investor visa as only 10,000 are awarded every year. With the increase in investment will come less competition for those who are able to acquire the necessary investment funds, as many other potential investors will opt out of petitioning due to the investment amount. A regional center should be contacted for more information on these EB-5 investor visa regulation changes and for expert advice on visa eligibility and funding methods. Click here to find out more about EB-5 Investments and the importance of using a regional center for your EB-5 investor visa petition.