Did you know? Minimum Investments going up, Targeted Employment Area Designations being redefined
Did you know?
Minimum Investments going up, Targeted Employment Area Designations being redefined
In this blog, we would like to report a long-awaited ruling that will be published tomorrow July 24th and will go in effect on November 21, 2019.
U.S. Citizenship and Immigration Services (USCIS) announced new developments under the final rule to include:
- Raising the minimum investment amounts:
- As of the effective date of the final rule, the standard minimum investment level will increase from $1 million to $1.8 million, the first increase since 1990, to account for inflation. The rule also keeps the 50% minimum investment differential between a TEA and a non-TEA, thereby increasing the minimum investment amount in a TEA from $500,000 to $900,000. The final rule also provides that the minimum investment amounts will automatically adjust for inflation every five years.
- Revising the standards for certain targeted employment area (TEA) designations:
- The final rule outlines changes to the EB-5 program to address gerrymandering of high-unemployment areas (which means deliberately manipulating the boundaries of an electoral constituency). Gerrymandering of such areas was typically accomplished by combining a series of census tracts to link a prosperous project location to a distressed community to obtain the qualifying average unemployment rate.
- Giving the agency responsibility for directly managing TEA designations:
- As of the effective date of the final rule, DHS will eliminate a state’s ability to designate certain geographic and political subdivisions as high-unemployment areas; instead, DHS would make such designations directly based on revised requirements in the regulation limiting the composition of census tract-based TEAs. These revisions will help ensure TEA designations are done fairly and consistently, and more closely adhere to congressional intent to direct investment to areas most in need.
- Clarifying USCIS procedures for the removal of conditions on permanent residence:
- The rule revises regulations to make clear that certain derivative family members who are lawful permanent residents must independently file to remove conditions on their permanent residence. The requirement would not apply to those family members who were included in a principal investor’s petition to remove conditions. The rule improves the adjudication process for removing conditions by providing flexibility in interview locations and to adopt the current USCIS process for issuing Green Cards.
- Allowing EB-5 petitioners to retain their priority date under certain circumstances:
- The final rule also offers greater flexibility to immigrant investors who have a previously approved EB-5 immigrant petition. When they need to file a new EB-5 petition, they generally now will be able to retain the priority date of the previously approved petition, subject to certain exceptions.
The EB5 industry’s foremost advocate, Invest in the USA (IIUSA), in a note to its members, said that IIUSA will be monitoring the regulation’s final steps and fully evaluating the text. They wanted to make sure that the members keep in mind that given the 120-day window before the regulations are effective, the current program may be reauthorized with new and positive reforms making the new regulations moot vis-à-vis a (new) reauthorization statute.
So what is our recommendation? If you have the financial wherewithal and have already determined to invest in EB-5 for your or your family's future do not wait any longer. There is no gain from waiting. Do not procrastinate! This could be your last chance; this could be the last call!! Potential investors who are serious about taking advantage of the EB-5 program should act now at favorable terms before it is too late.
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