The new TEA definitions have changed the EB5 ecosystem.
The new TEA definitions level the playing field for both rural projects and urban projects in economically depressed areas. As large developers are forced to move to smaller projects in the new TEAs if they want to remain in the EB5 market at all, it becomes easier for rural projects to compete with them. Competing against a small hotel in Bronx or Utah is easier than competing with 50+ story skyscraper in Manhattan, Miami or LA. The new TEAs end up restricting the size of the EB5 raise, thus offering advantage to nimble players over giant urban projects with decades long time horizons. Size is no longer an advantage in EB5--nimbleness is.
The same pattern holds for immigration law firms in EB5. Large EB5 immigration practices were built on access to overseas agents and/or to giant urban projects. As EB5 projects are more splintered and so are agent structures throughout the world, the average size of EB5 practices for immigration law firms and their revenues will be reduced. As the number of projects in the market is not reduced--but simply their size is diminished, other players in the EB5 ecosystem like securities attorneys, business plan writers, and economists will all gain in relative importance in the EB5 ecosystem.
Industry networking events are already down in number and size of attendance--that trend will continue and accelerate--thus changing the networking structure of the industry away from events and toward phone and email. Giant projects which were hitherto the central nodes in the EB5 network are gone--making the network more egalitarian. With the new TEAs Congress is in a better position politically to target the program to benefit its constituents and it also enhances the place of USCIS and media in the the changed EB5 industry.
The overall pattern is one of spread and diversification of influence in the industry as opposed to concentration of it.
- New York
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