In July 2019, United States Citizenship and Immigration Service (USCIS) and the Department of Homeland Security (DHS) published updates to the EB-5 visa program in the Federal Register. The new EB-5 rule, implemented to modernize the program, came into effect on November 21, 2019.
While the updates include several technical revisions, the key changes to the EB-5 visa program relate to investment amounts, the designation of targeted employment areas (TEAs), and priority date retention for certain EB-5 investors.
For the first time since the investment green card program began, investment amounts have increased. The full investment amount rose from $1 million to $1.8 million, whereas the reduced investment amount permitted when investing in projects in TEAs rose from $500,000 to $900,000. This change reflects inflation, and a framework has been introduced to facilitate subsequent inflation-based increases in investment amounts every five years.
Previously, individual states and local governments were permitted to designate high unemployment targeted employment areas. Now, USCIS directly reviews and designates these TEAs. Additionally, the rules have changed for combining census tracts to form a single TEA. Although census tracks can still be combined, the TEA must consist of only the contiguous tracts in which the new commercial enterprise will operate and any directly adjacent census tracts. Finally, the definition of a high employment TEA has changed to include areas located outside metropolitan statistical areas (MSAs).
The changes to the TEA designation process mean that EB-5 investors who claim to qualify for the lower investment amount now have to submit supporting evidence that the target project falls within a TEA—rural or high unemployment—when submitting their I-526 petitions. Furthermore, the area must meet the EB-5 green card program criteria at the time of filing the petition or at the time of making the investment. Some areas that previously qualified as TEAs will no longer qualify under the new rules, so investors must confirm TEA status when conducting their due diligence.
Finally, certain EB-5 investors will be able to retain their priority dates—the date on which they filed their I-526 petitions, which determines their place in the visa queue. This EB-5 update applies to investors whose I-526 petitions have been approved but who have not yet obtained conditional permanent residence and whose investment green cards are at risk because of material changes to their applications. The new rules allow them to file new I-526 petitions without losing their place in the visa queue.
Over the coming months the full implications of the EB-5 visa program changes will become clear when new petitions are filed—and new challenges arise. EB-5 practitioners, investors, and developers should keep up with EB-5 news to make sure they know how the implementation of the new rules will affect their participation in the EB-5 green card program.