How Do The Proposed Changes Affect The Investment Amounts In The EB-5 Program?


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The reality is that if the amount gets increased to $1.35 million, it’s going to effectively kill the program. Very few will invest that amount. Most investors could live with a $300,000 increase but not an increase that went from $500,000 to $1.35 million. We are guessing the final investment amount will not be more than $1 million. There was an open comment period on these progressed regulations from the beginning of January through the middle of April and hundreds of comments were given about the proposed regulation. The most common comment left was that the maximum initial investment amount should be no larger than $800,000.

They also said that no matter what you do, whether it’s Congress’s bill or immigration’s proposed regulation, is that neither one of these will really fix the problem of China backlog and the fact that there’s eventually a 10-year backlog for Chinese applications. Before they even do anything about increase in the investment amount or any of the other changes that they have proposed, this has to be fixed. As time goes on, more Chinese investors will refuse to wait 10 years for a Green Card when the waiting period in all other countries is only 2 years. say “I am not going to wait 10 years just to get a 2-year green card when the rest of the world only have to wait 2 years”. Hopefully immigration will hear this and propose something to fix that particular issue.

How Do The Changes Impact The TEA Designation Process?

For TEAs, the current way is that all the 50 states and Puerto Rico, which has the program as well can determine their own regulations regarding what is a high unemployment area. The general rule is it has to be one-and-a-half times the national unemployment average, or in a rural area. If, for example, a TEA is one-and-a-half times the national unemployment rate and if the rate at that time was 4%, then the rate for a TEA would have to be 6%. The question now becomes how do you determine the rate in a particular area? It becomes more complicated when you consider that each state has its own rules.

California, for example, you can peel together or sort of gerrymander up to 12 different census tracks in and around of your project. Let’s say, you are building in a hotel in a census track that is high employment such as Beverly Hills.

You can craft together up to 12 different census tracts that are adjacent and take the average unemployment rate of those areas in order to get the unemployment level that you need. I am not just picking this out as a lone example. There are many examples similar to that in other states like New York, Texas and Florida, where they have very relaxed rules on what it takes to be TEA. The smaller states like Vermont and Iowa have more restrictive rules because the whole area is high end employment or rural. It could be large areas of unemployment or rural.

What immigration wants to do is say that states can no longer do this, and it’s going to be an immigration rule that will apply to all, with determinations being made on a case by case basis by USCIS. The problem with this is that no one knows how long it will take to do determinations on a case by case basis. Right now, you can get a TEA determination in days. With immigration, it may take months because everything takes long or when it’s going through immigration. This will delay everything. It’ll also bring pretty much to a halt to the EB-5 program. What they are proposing is not workable and this has come through loud and clear on the comments. Immigration can adopt the comment, can tweak a comment or it can ignore a comment. So who knows what they’ll finally come up with but that’s the situation relating to TEAs.

Why Were There Changes Proposed To The Eb-5 Program?

Changes were proposed to the EB-5 program because Congress couldn’t agree on some major differences in the current bill or the proposed bills that were before them. Because they were not able to get a bill passed in the last 2 years which caused USCIS to go ahead and propose their own.

For more information on Investment Amounts In EB-5 Program, a free initial consultation is your next best step. Get the information and legal answers you are seeking by calling (310) 477-3000 today.

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