(Source: Wolfsdorf Rosenthal) The Obama Administration has sent substantial new regulations to Office of Management & Budget (“OMB”) in the final step to modernize the EB-5 Program. The OMB is a government agency that needs to clear regulations before published. We expect the regulation to be published in the next 30
days, with at least a 30-day comment period. This means that there may
be only about 60 days before the minimum investment amount increases. The new regulations will be the most dramatic change to the EB-5 Program since its inception 25 years ago. There is likely a small window of opportunity to file an I-526 petition before the new rules become effective early next year. This
window will likely present the last opportunity to apply under current
TEA rules and with a $500,000 investment. There is likely a window of
opportunity to file now before the new rules apply.
Here are five things to know about the new regulations:
- Increases to Required Investment Amounts. The new regulations will include an increase to required EB-5 investment amounts. Nobody is certain whether USCIS will see a gradual increase or a sudden jump to an increased minimum investment amount of $800,000 for TEA investments and $1 million or even $1.2 million for non-TEA investments.
- Changes to Definition of Targeted Employment Area. The new regulations will likely redefine the types of EB-5 projects that meet eligibility for the reduced investment amount, either because they are in rural or other areas where a capital infusion is likely to create jobs and benefit the community, or in certain industries such as manufacturing.
- Changes to Priority Date Retention. Presently, if it becomes necessary to re-file an I-526 petition because of project failure or other circumstances that are through no fault of the immigrant investor, for mainland Chinese born, he/she still must go to the back of a long waiting line. Hopefully, the new regulations will entitle those investors that are defrauded or otherwise not at fault to refile and retain the old priority date.
- More Predictable Adjudications. The goal of the new regulations, other than modernizing key areas of the EB-5 Program, is to provide a higher level of predictability and transparency in the adjudication process. We hope the changes will enhance the integrity of the EB-5 Program by clarifying key eligibility requirements for participation and further detailing the processes required.
- EB-5 Waiting Line. It is hoped that Congress will also tackle the critical problem of the waiting line soon and we encourage Congress to address the quota issue at the same time it re-introduces the American Job Creation and Investment Promotion Reform Act. This bill is likely to be considered early next year and the new law and the new regulations will complement each other in revising the EB-Program.
Unfortunately, these regulations can do nothing about the
most critical issue of the EB-5 Program, that is increasing waiting line
for Mainland Chinese born investors. This is an issue that only the U.S. Congress has authority to resolve. One
solution is for Congress to borrow 10,000 visas annually from the
50,000 visas given away randomly in the annual green card lottery.
