Alarm bells are ringing within the US EB-5 Investor Visa community in the United States and around the world. The current EB-5 investment Green card program started in 1990 ends on September 30, 2019, but has been extended many times.
Dianne Stewart
According to Dianne Stewart, President of Pathway USA, leading concierge relocation consultants with a trustworthy track record based in Charlotte, NC, “One of three things will happen: the program gets canceled, which we believe to be very unlikely, or it gets renewed in its current state, which is possible, but, according to the pundits, also very unlikely, or, it gets renewed, but with major changes – and this is the consensus held by a number of those in the know.”
Last month the United States Office of Management and Budget (OMB) concluded its review of proposed new regulations and they have now been sent back to the USCIS (United States Citizenship & Immigration Service) for implementation. Therefore, it is possible the proposed regulations could be published in the Federal Register as a final rule soon, possibly providing as little as 30-60 days before implementation.
The proposed regulations are not expected to affect existing I-526 petitions filed prior to the effective date (i.e. retroactive application of the new regulations are not anticipated). However, the regulations may well raise the EB-5 minimum investment amount, from its current level of $500k, possibly to $1.35m (among other changes) and even higher for non-Targeted Employment Areas.
NOTE: This is not a legislative change enacted by the US Congress, but a regulatory change to the rules that the USCIS is entitled to make of its own accord.
“If the final rule pending before the Office of Management and Budget (OMB) becomes law and the new TEA investment amount jumps from $500,000 to $1.35m, the door will close for many South Africans seeking investor green-cards into the USA,” says Stewart. However, according to leading attorneys, the more realistic amount may be closer to $930,000 or $940,000. All of this is speculative and not reliable at this stage. More importantly, it is widely believed that the Regulations will be published as early as before the end of July 2019 and then a 120 day period of implementation will occur to coincide with the September 30th sunset date of the existing program. Either way, the clock is ticking and those filings not made before September 30th will be subject to the new regulations and increase. The only other possibility is that President Trump vetoes the regulation and sends the decision to Congress to decide and legislate.”
She says, “If you’re considering the EB-5 and have the ability to invest $500k in a Regional Centre for 5 to 6 years, then you need to make a decision one way or the other. Now. If an increase anything from $500k to $930K – $1.35m does not really change your ability to go this route, then you’re OK. But if the increase effectively closes the door for you, then perhaps you should consider taking out some insurance to keep the door open – make the $500k investment and file your I-526 before September 30. Indeed, the earlier the better to avoid the rush of last-minute filings.”
She advises that with the current processing times taking 2 years or more, people have plenty of time to prepare for their move to the USA and to get their personal and financial affairs in order.
“Once the conditional green card arrives, then you can decide whether to accept and move or whether to surrender your green-card opportunity, stay where you are and ride out the period until your investment is returned to you. Yes, it will have cost you some interest and some opportunity costs, but it will have kept the door open for you. Especially if you are still undecided and have children whose future could be uncertain,” she said.
Based on past experience, when faced with a threatened increase in the EB-5 investment amount, it is highly likely there will be a rush of investors seeking to make investments and file petitions before the effective date of the regulation.
Even investors from the three backlogged countries (China, Vietnam, India) may decide to apply now, as they will not only have a higher investment amount for the same immigration benefit if they file after the effective date, but they may also have a longer wait for their green cards due to the likely large influx of new investors expected in the next couple of months.
This issue should not have any impact on South African investors at this time, even if there is a rush from high net-worth South Africans wanting to keep their options open.
Says Stewart, “If you are a potential EB-5 investor, we encourage you to take action without delay. You need two essential elements for a successful EB-5 – A good immigration attorney and a good investment vehicle, a combination that will minimize the risks and maximize the chances of getting your green cards and the return of your investment. It is your responsibility to apply good common sense and to do your due diligence. Check credentials, ask questions and be informed. There are unfortunately a lot of highly suspect players in this arena right now, so do your homework thoroughly.”