On July 24, 2019, the United States Department of Homeland Security (DHS) published the long awaited “EB-5 Immigrant Investor Program Modernization†final rule. Effective November 21, 2019, the final rule implements a number of changes to the EB-5 program. The most significant change is an increase in the minimum investment amount from $500,000 to $900,000. The changes will apply to all Immigrant Petition by Alien Investor (Form I-526) petitions filed on or after November 21, 2019. Increase in Investment Amounts — $900,000 and $1.8 million The most significant aspect of the new rule is an increase in the EB-5 investment amounts. The standard minimum investment of $1 million has been increased to $1.8 million. The change is based on an adjustment for inflation from 1990 to 2015 as measured by the unadjusted Consumer Price Index for All Urban Consumers (CPI-U). The minimum investment in Targeted Employment Areas (TEAs) has been increased from $500,000 to $900,000. The rule as initially proposed was expected to raise the amount to $1.35 million, which was 75 percent of the standard investment. An amount of 50 percent of the standard investment was selected. The increase to $900,000 was closer to the $800,000 amount in proposed EB-5 legislation. The final rule also implements increases in the standard minimum investment, and corresponding TEA minimum investment, every 5 years based on the CPI-U. The increase of the minimum investment will cause a rush to file EB-5 petitions, especially from countries like India. Investors from India, Vietnam, and China should expect EB-5 visa number backlogs to increase significantly as a result of the increased filing. DHS Designates TEAs The new rule ends the ability of a state to designate a TEA and gives DHS complete authority to make TEA designations. A few other changes were noted regarding TEAs. Cities and towns can be designated as TEAs so long as they are outside of a Metropolitan Statistical Area (MSA). DHS is also finalizing a rule for the use of census tracts for high unemployment areas. DHS has also eliminated the use of the term contiguous to describe census tracts and instead is using the term “directly adjacentâ€. Priority Date Retention The new rule allows EB-5 petitioners to retain the priority date of any approved EB-5 petition for use in connection with any a subsequently filed EB-5 petition. The priority date is established on the date an I‒526 petition is received. The priority date represents the EB-5 petitioner’s place in line for the issuance of available immigrant visas. The significance of the rule is that it allows individuals who have invested in an EB-5 project, but are unable to obtain conditional resident status due to change of business conditions, to maintain their place in line if the person files a new I-526 petition. While this rule may be seen as a respite for individuals who have invested in failed projects and were unable to obtain lawful permanent residence, the rule does not allow for retention of the priority date if the person enters the United States as a conditional resident. This would frustrate the ability of many investors who may have been unable to obtain approved I-829s due to failed projects or changed business conditions. Removal of Conditions The new rule implements a requirement that derivative family members file their own petitions to remove conditions if not included in a petition to remove conditions filed by the principal investor. Link: EB-5 Immigrant Investor Program Modernization, 84 FR 35750 (Jul. 24, 2019).
