EB-5 Changes Are Here: Final Rule Published on July 24, 2019
After two and a half years of anticipation, OMB’s (U.S. Office of Management and Budget) proposed rules for Modernization Regulation RIN-1615AC07, was sent for publication several days ago.
Everyone in the EB-5 industry pondered why it is taking so long for the rule to become public, but the wait is now over:
Department of Homeland Security (DHS) has made public the final rule changes for the EB-5 program. The changes will officially become published on July 24, 2019.
We have access to the unpublished version which contains all the new changes:
Impact of the New Publication:
Here are the most important highlights which investors and Regional Centers should be aware of:
- Changes go into effect as of November 21, 2019
- Investment with the existing minimum amount is still possible if an investor is able to make a successful filing with a date prior to November 21, 2019
- Minimum investment amounts will rise to $900,000 for Targeted Employment Area (TEA) and $1,800,000 for non-TEA areas.
- TEA designation will no longer be made by the states. USCIS, not the states, will have the authority to designate an area as TEA
- TEA designation is expected to become allot more restrictive, thus impacting multiple Regional Centers
- USCIS is to make a new determination every 5-years, beginning October 2, 2024, whether the investment amount should increase further
- Amendments or supplements made to offering documents which are necessary (in order to remain compliant with securities laws or with other new regulations) will not in themselves result in a denial or revocation of an EB-5 petition, provided that the petition meets all other requirements
- If an investor has multiple approved I-526 petitions, that investor can retain the earlier priority date, so as to avoid additional processing time.
Serious investors are urged to act quickly. Some Regional Centers which may not have factored-in the potential changes may face issues with complying with the new regulations.
NOTE: The EB-5 program is set to expire on Sept 30, 2019. While Congress and stakeholders are diligently working on reauthorization, the deadline may be extended. If such an extension occurs, the rule published today may never take effect. Only Congress can enact all of the reforms necessary to modernize EB-5. The published changes do not address the much anticipated:
- Fraud and national security measures which were highly anticipated
- The rural and urban “distressed visa” allotment
- The anticipated “Opportunity Zone” designations in urban areas
As of now, the date for the implementation of the new rules as outlined above is November 21, 2019 Please consult Lawmaks with any specific questions you may have.