In a proposed rule published last week, U.S. Citizenship and Immigration Services is seeking to make significant changes to the EB-5 immigrant investor program, including higher investment minimums and exclusive federal authority to designate Targeted Employment Area (TEAs), the rural and high-unemployment areas that qualify for EB-5 investment at lower thresholds.
Key provisions of the proposal are summarised below. USCIS is accepting public feedback on the rule through April 11, 2017.
Higher Investment Minimums
USCIS proposes to increase the minimum thresholds for participation in the EB-5 program, which currently stand at $500,000 for TEA investments and $1 million for all other EB-5 investments. The minimum investment for TEAs would increase by 170 percent, to $1.35 million. The standard minimum investment would increase by 80 percent, to $1.8 million. Investment thresholds would increase automatically every five years, keyed to the Consumer Price Index.
Exclusive Federal Authority to Designate Targeted Investment Areas
The rule would give USCIS the exclusive authority to designate TEAs. Currently, U.S. states have broad authority to designate high-unemployment TEAs, in recognition of their superior knowledge of local demographics and employment needs.
Under the proposal, USCIS would designate TEAs based on a new methodology that would limit investment to more strictly demarcated areas. This could limit the types of urban development projects that have proven most desirable to foreign investors in recent years.
Priority Date Retention for Foreign Investors
In a positive development, the proposal would permit EB-5 petitioners to retain their priority date – the date that fixes their place in line for an immigrant visa number – if circumstances beyond their control require the filing of a subsequent EB-5 petition. This provision could aid foreign investors whose initial EB-5 petition is detrimentally affected by the termination of a Regional Center or a material change in a business plan. If finalised, priority date retention would be a significant benefit to Chinese EB-5 investors, who are subject to multi-year backlogs.
What the Proposal Means for Foreign Investors
Because the new USCIS regulation is a proposal only, it will not take effect until the agency reviews public comments and issues a final regulation – a process that typically takes several months. Implementation of the proposal could also be delayed or suspended by the incoming administration of President-elect Donald Trump.
The proposed regulation comes as Congress considers the reauthorisation of the EB-5 Regional Center program, which is set to expire on April 28. A reauthorisation bill could include its own revisions to the EB-5 program. Through April 28, prospective investors can still qualify under existing program rules, including the current investment thresholds of $500,000 and $1 million.