Starting November The EB-5 Visa Will Require Nearly Double The Investment Amount

On Wednesday, July 24, 2019, the new EB-5 rule, EB-5 Immigrant Investor Program Modernization Regulation (RIN 1615-AC07), was published in the Federal Register. Up until now, no one knew with certainty what the changes the rule contained.

There were several EB-5 changes that were expected because they were released to the public when the rule was first drafted. Over the last two years, the rule went through comment periods and reviews that made it impossible to know what would be in its final form.

Minimum investment amount:

The EB-5 minimum investment amounts were predicted to increase. However, the minimum investment amount for targeted employment areas (TEA) was not increased as much as expected. What the industry expected was an increase from $500,000 to $1.35 million. Instead, the rule increased the minimum investment amount from $500,000 to $900,000. 

The non-TEA minimum investment amount was predictably increased from $1 million to $1.8  million. 

What the rule added was that these amounts are set to increase every 5 years to account for inflation.

Their argument for increasing the minimum investment amount, beyond keeping up with inflation, is that regional centers will benefit from needing to recruit less investors to obtain a similar investment amount, thus reducing their costs. The effect it will have on the visa backlog is uncertain. Downsides could include less global investors being interested in the EB-5 Program and less job-creation due to fewer investors. 

Targeted employment areas:

As expected, states will no longer have the ability to designate TEA. DHS will be the sole authority for TEA designation and they will tighten the qualifications in an attempt to make TEA adjudications more consistent across the U.S . They will modify it to only cities and towns of more than 20,000 outside of a metropolitan statistical area, as a separate and specific area, may qualify (based on high un-employment). 

Effective date:

The EB-5 rule will go into effect on November 21, 2019. Until then, eligible EB-5 applicants can consult with an EB-5 attorney about applying now under the current EB-5 rules to lock in the lower investment amount.