The USCIS Announces Changes of Regulations for the EB- Investor Residency Program
Dated: July 24 th, 2019
Mr. Andrew Cuevas, Esq., is the President of Cuevas, Garcia & Torres, P.A., and Vantage Property Title Company. Mr. Cuevas has been practicing law since 1993 in the area of Business Immigration Law and Commercial transactions, including commercial and residential real estate transactions and business acquisitions for foreign investors. Cuevas, Garcia & Torres, P.A. has offices in Miami and Orlando. If you have any questions regarding this article or any other questions, you can contact Mr. Cuevas at (305) 461-9500 or at [email protected].
This Newsletter updates our newsletter dated June 21, 2019, in which I discussed the possibility of the USCIS changing the regulations for the EB-5 Residency program. Today the new regulations were announced that will take effect on November 21, 2019. There are numerous changes, but the most important changes are that the EB-5 Indirect Investment option (Regional Center) will be increased from $500,000 to $900,000 and the EB-5 Direct Investment option will be increased from $1 million to $1.7 million.
As a reminder (see our June 21, 2019 newsletter), a very popular option utilized by foreign investors is the EB-5 Investor Visa Program to obtain the US Permanent Residency which is based on a model of job creation where the investor loans $500,000 to development projects qualified by the USCIS for job creation, and obtain the permanent residency base on the loan. The requirement of the investment/loan of $500,000 has existed since the program was established in 1990.
U.S. Citizenship and Immigration Services (USCIS) has published its final rule on July 24, 2019 that makes a number of significant changes to its EB-5 Immigrant Investor Program, marking the first significant revision of the program’s regulations since 1993. The final rule will become effective on Nov. 21, 2019.
New developments under the final rule include:
- Raising the minimum investment amounts;
- Revising the standards for certain targeted employment area (TEA) designations;
- Giving the agency responsibility for directly managing TEA designations;
- Clarifying USCIS procedures for the removal of conditions on permanent residence; and
- Allowing EB-5 petitioners to retain their priority date under certain circumstances.
Under the EB-5 program, individuals are eligible to apply for conditional lawful permanent residence in the United States if they make the necessary investment in a commercial enterprise in the United States and create or, in certain circumstances, preserve 10 permanent full-time jobs for qualified U.S. workers.
“Nearly 30 years ago, Congress created the EB-5 program to benefit U.S. workers, boost the economy, and aid distressed communities by providing an incentive for foreign capital investment in the United States,” said USCIS Acting Director Ken Cuccinelli. “Since its inception, the EB-5 program has drifted away from Congress’s intent. Our reforms increase the investment level to account for inflation over the past three decades and substantially restrict the possibility of gerrymandering to ensure that the reduced investment amount is reserved for rural and high-unemployment areas most in need. This final rule strengthens the EB-5 program by returning it to its Congressional intent.”
Major changes to EB-5 in the final rule include:
- Raising 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.
- TEA designation reforms: 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. 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 removing 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 keep their priority date: 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.
This article is solely a partial explanation of all the issues related to the topic of this newsletter, and is not to be considered legal advice. Persons interested in obtaining more information should consult with their legal counsel to obtain explanations of all issues addressed herein.