On Jul 24 2019 by Daniel B. Lundy
EB-5 Regulations to be Published Today!
USCIS announced that the new EB-5 regulations will be published today, July 24, 2019, in the Federal Register. Below is a summary of the effects of the new regulations:
- The minimum investment amount for an investment in a Targeted Employment Area (“TEA”) will be $900,000.
- The minimum investment amount for an investment that is not in a TEA will be $1.8 million.
TEA designations will now be made by USCIS at the time of I-526 adjudication. An investor must show that he or she invested in a new commercial enterprise/job-creating enterprise that was principally doing business in a TEA at the time of filing. A TEA can be a Rural area, which is defined as any area outside of a Metropolitan Statistical Area or any city or town with a population of 20,000 or more. This has not changed from the previous regulations. A TEA can also be a high unemployment area, which can be any city or county with a population of 20,000 or more outside of a metropolitan statistical area, or any city or county in a Metropolitan Statistical Area with an unemployment rate that is 150% of the national average. Alternatively, an investor can show that the investment is in a high unemployment TEA if the investment is in a census tract, or group of directly adjacent census tracts, that have a weighted average unemployment rate of 150% of the national average.
Previously, the States had the authority to designate high unemployment areas, not USCIS, and the determination was made by the States prior to the filing of the I-526. Previously, a state could use any geographic or political subdivision to draw the boundaries and could combine an unlimited number of contiguous (but not necessarily adjacent) census tracts to draw a district with a high enough unemployment rate. This is a dramatic change, which will lead to a substantial reduction in the number of EB-5 projects able to claim TEA status.
Priority date retention:
Investors who have filed an I-526 petition, and had that petition approved by USCIS, will now be able to use the priority date established by the filing of that I-526 petition in a subsequent I-526 filing in cases where, through no fault of the investor, circumstances have changed materially. This could be a change in business plan or the termination of a regional center by USCIS. Presumably, but not explicitly stated in the regulation, this could be used where investors have been the victims of fraud or misappropriation, and have to file a new I-526 petition based on a new or restructured investment.
Once an investor has obtained an immigrant visa through an I-526 petition and becomes a conditional resident, he or she can no longer use the priority date of that I-526 petition if he or she files a new I-526 petition. The regulations only offer protection to investors whose I-526 petitions have been approved, and who have not yet obtained conditional residence.
Perhaps the biggest question on everyone’s mind has been when the regulations will take effect. The regulations will be in effect and apply to all I-526 petitions filed on or after November 21, 2019. Any petition filed before that date will be subject to the current rules.
Please contact your Klasko attorney with any questions.
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