July 30, 2019

Donoso & Associates summarizes below the 10 most frequent and most important questions EB-5 investors have about the new EB-5 Regulations published by the Department of Homeland Security (DHS) as a Final Rule on July 24, 2019:

1. When do the new EB-5 rules become effective?

November 21, 2019. All new I-526 visa petitions filed on or after November 21, 2019, must satisfy the new requirements set out in the Final Rule.

Will the minimum investment amount go up on November 21, 2019?

Yes. The minimum investment amounts will increase to US$900,000 for investments in rural areas or high unemployment areas (known as a Targeted Employment Area or “TEA”). For all other areas, the investment threshold will go up to US$1.8 million.

2. Are the new EB-5 Regulations retroactive?

No. The Final Rule expressly provides that they do not have retroactive effect. The new EB-5 Regulations only apply to new I-526 visa petitions filed on or after November 21, 2019.

3. When will new EB-5 investments become available at the $900,000 threshold?

We do not know at present when new investments will become available at the $900,000 threshold. The $900,000 investment threshold is only available if DHS / USCIS designate an area as a TEA. DHS / USCIS have not published any instructions, forms, procedures or fees for obtaining a TEA designation. This means, for practical purposes, that US$900,000 investments may not be available for some months after November 21, 2019 – unless USCIS publishes rules before that date.

4. If I have a pending I-526 EB-5 visa petition, will I have to invest more capital to keep my visa process?

No. The new EB-5 Regulations do not require EB-5 investors that have already properly filed an I-526 visa petition to invest more capital to maintain their EB-5 visa process after November 21, 2019. The exception to this statement are the priority date retention rules for second EB-5 visa petitions (see below).

5. Will the new EB-5 Regulations allow for priority date retention?

Yes. The Final Rule allows EB-5 investors whose I-526 visa petition was approved (“Original EB-5 Petition”) to retain the priority date when submitting a second and subsequent EB-5 petition (“Second EB-5 Petition”). The rule only applies to approved I-526 petitions – even if the petition was eventually revoked due to a project related issue, regional center related issue or investor issue (so long as it is not fraud or misrepresentation or material error by USCIS). Priority date retention is not available if the investor eventually obtained Conditional Lawful Permanent Resident status based on the Original EB-5 Petition.

6. I invested in a New Commercial Enterprise that had a pending I-924 Exemplar. Will USCIS adjudicate that application differently after November 21, 2019?

No. If you invested in a New Commercial Enterprise (NCE) before November 21, 2019 and properly filed your I-526 visa petition, and the NCE is waiting to receive a decision on an I-924 Exemplar Application from USCIS, the new EB-5 Regulations should not change the rules that USCIS will apply when making a decision on the pending I-924 Exemplar Application. Similarly, your I-526 visa petition properly filed before November 21, 2019 will be adjudicated by USCIS based on the current rules in force before November 21, 2019.

7. Will USCIS allow “place-holder” I-526 visa petitions filed before November 21, 2019?

No. Current USCIS rules and policies require all I-526 visa petitions to be filed with sufficient evidence for USCIS make a decision on the application. Petitions that are mere placeholders with little or no evidence will likely be denied by USCIS in its efforts to prevent investors from trying to reserve an investment at the current $500,000 investment threshold for TEA areas.

8. If my current I-526 visa petition is approved, will the new EB-5 Regulations affect me?

No, not likely. The new EB-5 Regulations do not change the rules for I-526 visa petitions that are properly filed before November 21, 2019 and that eventually are approved by USCIS.

9. Do the new EB-5 Regulations change the number of visas available for the EB-5 program?

No. The Final Rule does not change the rules regarding the number of EB-5 visas or the rules regarding waiting lists. Nevertheless, the increase in the investment thresholds to $900,000 for TEAs and $1.8 million for other areas are likely to have a two-fold effect on EB-5 visa usage. First, the Final Rule will cause a moderate increase in the number of EB-5 investors that are going to file I-526 visa petitions before November 21, 2019. Second, the Final Rule will likely cause a dramatic decrease in new I-526 visa petitions after November 21, 2019 because of the increased investment required, and because USCIS has not yet issued rules for TEA designation (making it impossible for regional centers to offer new investments that qualify as new TEAs). Thus, predictions on visa waiting lists will have to be revised by the Department of State to take into account that new EB-5 visas will likely drop below 100-200 visas for the entire program after November 21, 2019 for the foreseeable future thereafter.

Donoso & Associates, a leading immigration law firm based in Washington, D.C., will continue to report on developments regarding the EB-5 Program and related regulatory and legislative issues through our news section of donosolaw.com.