January 14, 2017. Washington, D.C. U.S. Citizenship and Immigration Services (USCIS) has published a proposed rule for public comments. In its proposed rule, USCIS proposes to make changes to the EB-5 immigrant investor program, including higher investment thresholds and give federal government exclusive authority to designate Targeted Employment Area (TEAs), the rural and high-unemployment areas that qualify for EB-5 investment at lower investment thresholds.
Some of the major provisions of the proposed rules are the following:
Higher Investment Thresholds
The proposed rule proposes to increase the minimum thresholds for participation in the EB-5 program, which currently stand at $500,000 for TEA investments and $1 million for all other EB-5 investments. The minimum investment for TEAs would increase to $1.35 million. The regular minimum investment threshold would increase to $1.8 million. Investment thresholds would increase automatically every five years, keyed to the Consumer Price Index.
USCIS will have exclusive authority to designate Targeted Investment Areas (TEAs)
The proposed rule would give USCIS the exclusive authority to designate TEAs. Currently, individual States have the authority to designate high-unemployment TEAs, in recognition of their superior knowledge of local demographics and employment needs.
Under the proposal, USCIS would designate TEAs based on a new methodology that would limit investment to more strictly demarcated areas. This could limit the types of urban development projects that have proven most desirable to foreign investors in recent years.
Priority Date Retention for Foreign Investors
The proposal would permit EB-5 petitioners to retain their priority date – the date that fixes their place in line for an immigrant visa number – if circumstances beyond their control require the filing of a subsequent EB-5 petition. This provision could aid foreign investors whose initial EB-5 petition is detrimentally affected by the termination of a Regional Center or a material change in a business plan. If finalized, priority date retention would be a significant benefit to Chinese EB-5 investors, who are subject to multi-year backlogs.
What you need to know as a Foreign Investor?
This is a proposed rule only, it will not take effect until the agency reviews public comments and issues a final regulation – a process that typically takes several months. Implementation of the proposal could also be delayed or suspended by the administration.
The proposed regulation comes as Congress considers the re-authorization of the EB-5 Regional Center program, which was set to expire on April 28. Recently U.S. President signed a spending package that includes a short-term continuing resolution (CR) extending the EB-5 Regional Center Program through December 7, 2018. Through December 7, 2018, prospective investors can still qualify under existing program rules, including the current investment thresholds of $500,000 and $1 million.
(last updated September 28, 2018)
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Note: This is a blog post by Adhikari Law PLLC and should NOT be construed as a legal advice.