Significant New EB-5 Regulations to be Published July 24, 2019, Effective November 21, 2019

U.S. Citizenship and Immigration Services (USCIS) announced on July 23, 2019 that final regulations will be published on July 24, 2019 making a number of significant changes to the EB-5 Immigrant Investor Program effective November 21, 2019.

The regular required investment will increase from the current $1 million to $1.8 million. The reduced amount for investments in targeted areas will be $900,000 (50% of the standard amount).

The changes will apply to all Immigrant Petition by Alien Investor (Form I-526) petitions filed on or after November 21, 2019. Form I-526 petitions filed prior to the effective date of the rule will be allowed to qualify based on the regulatory requirements in place at the time of filing of the petition.

Apart from changes to the investment amount, the other major change addresses the way an area may be designated as a TEA (Targeted Employment Area) to benefit from the lower investment threshold.

Under the current regulations, unemployment data could be combined for "contiguous" census tracts to show that the weighted average of the unemployment rate for the tracts is at least 150 percent of the national average. Under the new regulations, the focus is on "immediately adjacent" tracts.

The new regulations would eliminate the ability of a state to designate certain geographic and political subdivisions as high unemployment areas; instead, DHS will make such designations directly. With the new regulations, USCIS hopes to address what is commonly referred to as gerrymandering (which means deliberately manipulating the boundaries of an electoral constituency) of high-unemployment areas. Gerrymandering of such areas was typically accomplished by combining a series of census tracts to link a prosperous project location to a distressed community to obtain the qualifying average unemployment rate.

The basic element of the EB-5 program remains unchanged: the creation of at least 10 full time jobs for US Workers. The regular or "Direct" EB-5 program requires the jobs to be created directly by the new commercial enterprise. Investors in the Regional Center Program may meet the job creation requirements based on economic projections of either direct or indirect job creation