2020: Hurry Up and Wait (EB-5 New Adjudication Rules)

To start off the new year in 2020, USCIS issued new rules on how it deals with EB-5 visa petitions.

Up to this point, the initial EB-5 investor immigrant petitions (I-526) have been processed on a first-in, first-out basis.  The processing times have ranged from 32 months to 50 months.

Starting March 31, 2020, USCIS will only process the initial EB-5 petitions on a visa availability approach.  Without going into a long winded discussion about visa retrogression, the oversimplified explanation is that they will only process the I-526 petitions for applicants whose countries do not have a wait list.

Those countries with a wait list are currently China, India, and Vietnam.

So if one is an investment immigrant from _outside_ of those three countries, the I-526 petitions will be processed as it always has: first-in, first out (because visa allotments are usually available for all countries outside of China, India, and Vietnam).  There is speculation that it will speed up the process for those born outside of China, India, and Vietnam.  But that remains to be seen.

For those investor immigrants born in China, India, and Vietnam, obviously, it will mean longer wait times.  Yes, even longer than they are now.

Other alternatives to consider for those from China, India, and Vietnam are possible L-1s (setting up a US company and transferring in as an executive from the parent company), E-2s through a third country, cross chargeability (spouse was born in a different country), or an O-1 visa (for aliens of extraordinary ability).

The full body of the press release here:

https://www.uscis.gov/news/news-releases/uscis-adjusts-process-managing-eb-5-visa-petition-inventory

 

 

Finally! The New EB-5 Regulations are here.

So the anticipated day has arrived — today, November 21, 2019 — for those who are interested in utilizing an investment in the United States for an immigrant visa.

The new EB-5 regulations are in effect today!

There was a massive rush to get everything filed for foreign investors prior to today to take advantage of the old rules for investors.  Now that we all have had a chance to catch our breath, here are the changes forthwith:

The two most relevant highlights of the new regulations are:

1. Increase in the minimum investments amounts:  The current investment amount has been raised to $900,000 for the Targeted Employment Area (TEA)* from the original $500,000.  And for all other areas in the United States, the minimum amount investment is $1.8 million US (raised from $1 million).
2. TEA Designations are now to be handled by the Department of Homeland Security.  Previously, the states determined what was a TEA.

There are a few new regulations others dealing with derivatives and management participation and they can be found here on the USCIS website : EB-5 Immigrant Investor Program. 

* Targeted Employment Area is a designated census tracts that have an unemployment rate of 150% of the national unemployment rate.* This seems appropriate given that the EB-5 is based on the hiring of US workers and this will “on paper” funnel more EB-5 investment funds into actual areas that have high unemployment areas.  There has been criticisms (legitimate criticism, in my opinion) about how the TEAs have been carved up — please refer to this: NYC’s Hudson Yards & TEA.  There are a number of other news reports about the use of gerrymandering TEA tracts from the New York Times and the Wall Street Journal, but the above link doesn’t have a paywall.

So What’s Going to Happen Now:

In my opinion, I think the new regulations will probably mean the contraction of the EB-5 Regional Centers operating and of course the EB-5 program in general.  As I try to do, I always make the point that there are two variations of the EB-5 program (this post clarifies the distinction.)

The increased investment amounts — almost double — will probably depress demand for a while (along with the ever increasing visa waitlist for Chinese investors).  EB-5 Regional Centers that aren’t on a strong financial footing will probably start to fail.  The infrastructure that has developed over the years (administrative staff, sales people and attorneys) will also shrink too.

So if you are interested in the EB-5 program, you should probably wait a few months to see how some of these programs are doing before doing down the Regional Center path.  And if you are going to go at it alone, it’s probably more important than ever to find a viable quality long term business that you will be able to start in the United States.

 

 

Los Angeles Times Rehashes the EB-5 Immigrant Investor Program

The Los Angeles Times rehashes the EB-5 Immigrant Investor program in today’s article.

http://www.latimes.com/nation/la-na-eb5-visa-explainer-20180410-story.html

Of note is the reference at the end of the article which indicates that there will be increases in the minimum investment amounts in the EB-5 program.  The figures they cite may not be accurate – they may actually be higher when fully implemented.  But the investment threshold will increase.

EB-5 Proposals and What They Could Mean

It’s that time of the year, where the EB-5 Regional Center program is going to sunset and there is a scramble (as usual) to renew it.  And it should be pointed out that this has no effect on the “original” EB-5 program, were an individual invests capital and creates 10 jobs.  That will always be there.

But the Regional Center portion of the EB-5 program has always been given a life for limited periods of time, possibly because of some of the controversy and issues surrounding this program.

There are a number of competing bills summarized here:

http://eb5coalition.org/resources/bill-comparison-chart/

EB-5 Regional Center Program Extended

The US Senate just passed the 2009 Omnibus Appropriations bill. It is now headed to President Obama for approval, which is expected.

The EB-5 Regional Center Program extension (not to be mistaken with the regular EB-5 program) was part of the above bill. The earlier extension originally sunset earlier this week, but with the approval, the program will be extended until September 30, 2009.

USCIS Announces New Filing Location for all EB-5 Petitions

All EB-5 related filings is to be filed at CSC only.

Submit all new EB-5 petitions and regional center application materials to:

For Direct Mail (i.e. USPS):

USCIS California Service Center
ATTN: EB-5 Processing Unit
P.O. Box 10526
Laguna Niguel, CA 92607-0526

For private couriers (FedEx, etcetera):

USCIS California Service Center
ATTN: EB-5 Processing Unit
24000 Avila Road, Room, 2nd Floor.
Laguna Niguel, CA 92677

EB-5 Investor Visa Regional Center Pilot Program Update

The EB-5 Regional Center Pilot Program has been extended until March 6, 2009 (yes, that’s next year). Presumably,further extensions (or a permanent one) would be taken up by the next administration. The extension was part of HR 2638 that also extended the E-Verify program. Without the extension, then the Regional Center Pilot program would have sunset at the end of October this year.

Just to recap very quickly, it should be noted that the EB-5 Visa is one that allows one to earn permanent residency (green card) via an investment of $1 million (or $500,000 if certain criteria are met — i.e., high unemployment area) and creation of 10 new full time jobs. Spouses and unmarried children are allowed to join the investor.

The EB-5 should not be mistaken for an E-2/E-1 Treaty Investor/Trader Visa, which is a temporary visa and does not have a minimum investment amount (although it still requires a substantial infusion of capital).

The EB-5 Regional Centers are entities that are set up by a third party, that allows the prospective foreign national to invest $500,000 (in an economically depressed area in the US), but not have to be involved in the oversight of the investment nor the job creation. The EB-5 Regional Center personnel are set up to create 10 new jobs on behalf of the investor and are involved in the day to day operations of the whatever investment vehicle that they are overseeing. The idea is to create a one-stop shop for your EB-5 Visa, without the challenges of running one’s own EB-5 enterprise.

One important thing to keep in mind is that the initial grant of residency is conditional. Sixty days prior to the two year anniversary, one must file an I-829 to remove the conditions to become a lawful permanent resident.