UNITED STATES’ RESIDENCY BY INVESTMENT PROGRAM IS SIGNIFICANTLY REVISED BY PUBLICATION OF NEW RULE
Imagine being a resident of the United States. The United States, often referred to as the “land of opportunity”, is considered an attractive destination for many immigrants, with its strong economy, high level of education, health care, and standard of living, political freedoms, and diverse culture. If you are interested in residing in the United States, you should note that the United States’ residency by investment program (known as the “EB-5 program”) was significantly revised on July 24 by the publication of a new rule.
Previously, under the EB-5 program, immigrants who invested $500,000 in a project located in a “targeted employment area” (generally rural areas and areas with high levels of unemployment) (“TEA”) in the United States that created 10 full-time jobs generally could qualify to receive a “green card”, which would grant the immigrant investor permanent lawful resident status in the United States.
The new rule published on July 24 makes changes to the EB-5 program in 2 key areas. First, the new rule changes the minimum investment amount requirements under the EB-5 program. The new rule significantly increases the minimum investment amount under the EB-5 program from $500,000 to $900,000 for projects in a TEA and from $1,000,000 to $1,800,000 for the less common situation of projects not in a TEA. These changes represent the first increase in the applicable EB-5 program minimum investment amounts since 1990. The new rule also provides that the minimum investment amounts will automatically adjust for inflation every 5 years. Second, the new rule changes how TEAs will be determined. The new rule eliminates the ability of a state in the United States to designate an area as “high-unemployment” (a key part of the definition of a TEA); instead, these designations would now be made by the Department of Homeland Security. It is believed that the Department of Homeland Security will be less permissive than the states in the United States have been in combining census tracts to “gerrymander” an area as “high-unemployment”.
In announcing publication of this new rule for the EB-5 program, U.S. Citizenship and Immigration Services Acting Director Ken Cuccinelli stated, “Nearly 30 years ago, Congress created the EB-5 program to benefit U.S. workers, boost the economy, and aid distressed communities by providing an incentive for foreign capital investment in the United States. . . . Since its inception, the EB-5 program has drifted away from Congress’s intent. Our reforms increase the investment level to account for inflation over the past three decades and substantially restrict the possibility of gerrymandering to ensure that the reduced investment amount is reserved for rural and high-unemployment areas most in need. This final rule strengthens the EB-5 program by returning it to its Congressional intent”.
The new rule is effective 120 days after its publication on November 21, 2019. It is expected that there will be a surge of new EB-5 program filings before November 21, 2019, as immigrants try to take advantage of the “old” rules governing the EB-5 program, including, in particular, to try to save $400,000 of investment funds ($500,000 vs. $900,000).
If you would like more information on the United States’ residency by investment program (the EB-5 program), please contact CitizenMatch, at email@example.com, or (773) 349-6693, for assistance.