In January 2017, the Department of Homeland Security (DHS) proposed to change the EB-5 Visa regulations to raise the minimum investment thresholds for eligibility, modify designations and definitions relating to targeted employment areas, and enhance regional center oversight. On June 27, 2019, the Office of Management and Budget (OMB) completed its review of the EB-5 Modernization Regulations. As the changes are fast approaching, potential EB-5 Visa applicants should learn more and act quickly.
What is the EB-5 Visa program and what is changing?
The EB-5 Visa program allows foreign investors and their family members to obtain lawful permanent residence in the U.S. if they meet certain thresholds for investment in U.S. businesses that generate new jobs (or maintain jobs that would have otherwise been eliminated) in targeted areas for economic development. Congress permits approximately 10,000 EB-5 Visas to be issued per year.
Proposed changes to the regulations governing EB-5 Visas focus on three areas:
- First, DHS has proposed to increase the minimum required investment in U.S. jobs from $1 million to $1.8 million (and from $500,000 to $1.35 million in “targeted employment areas”). Targeted employment areas are generally composed of rural areas and areas defined as “high unemployment areas.”
- Second, DHS has proposed shifting the authority to designate high unemployment areas from the individual states to DHS exclusively. Shifting this authority to the federal level could result in changes to areas that are presently designated as high unemployment areas.
- Third, the regulations propose to permit the immigrant applicant to use his or her “priority date,” the date of a previously approved I-526 Petition, for any subsequently filed petition that may be required of the applicant who must reapply due to a failing investment project, termination of a regional center or a backlog of visa applications, so as to avoid delays on immigrant visa processing associated with the loss of priority dates.
DHS is in the process of finalizing the rule for the regulatory changes to the EB-5 regulations. The OMB review is typically the final step prior to publication of the rule in the Federal Register.
Why it matters
The final regulation changes are likely to include increased thresholds for investment by eligible foreign investors and will also likely limit the scope and availability of projects that are eligible to qualify investors for lower investment thresholds.
As these regulations are expected to take effect between 30 and 60 days following publication in the Federal Register, foreign investors who are potential EB-5 Visa applicants should remain informed and act promptly to submit visa applications to United States Citizenship and Immigration Services.