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Possible Increase in the Minimum Required Investment Amount under the EB-5 Program

As you may know, the EB-5 Immigrant Investor Program, i.e., the regional center part of the EB-5 program, is a program that sunsets, or expires, every few years. The upcoming expiration date is September 30, 2015. Few people in the EB-5 field have any doubts about Congress agreeing to extend the program. Unfortunately, though, the renewal process gives Congress the opportunity to tinker with the program’s requirements, which can lead not just to positive, but also to negative changes in the program. Among the changes currently being proposed in the Senate’s renewal bill, Senate Bill 1501, is an increase in the required investment amounts, which would increase the required investment in a Targeted Employment Area (“TEA”) from $500,000 to $800,000, and outside of a TEA from $1 million to $1.2 million.

To make matters worse, the Department of Homeland Security, which is the agency under which the U.S. Citizenship and Immigration Services (“USCIS”) operates (USCIS being the authority that decides whether to approve the petitions of investors under the EB-5 program, and also the authority that establishes the regulations governing the EB-5 program), announced that, even in the absence of Congress raising the investment amount, it would increase the investment amount by regulation. This announcement came in the form of a letter, dated April 27, 2015, from the Secretary of the Department of Homeland Security, Jeh Charles Johnson, addressed to Senator Charles Grassley, the Chairman of the Senate Judiciary Committee, and to Senator Patrick Leahy, Ranking Member of the Senate Judiciary Committee.

Unfortunately, Congress did delegate the authority to change the minimum required investment amount to the government agency vested with the authority to administer the EB-5 program, originally the Department of Justice, but now the Department of Homeland Security acting through the USCIS. USCIS would have to change the minimum required investment amount via regulation, which must be introduced through the administrative rule-making process.

When could the increase in the investment amount come into effect? If Congress passes the extension of the EB-5 Immigrant Investor Program with the increase in the investment amount, then the increase would take effect on October 1, 2015, which is the first day when the extension of the program would come into effect, since the program will continue to function according to the current rules up to and including September 30, 2015. Cases filed prior October 1, 2015, which have not yet been completely approved, would undoubtedly be “grandfathered”, allowing them to qualify based on the lower required investment amount in effect at the time of investing and filing the I-526 petition. If USCIS increases the investment amount by regulation, then it will take longer for the investment amount increase to come into effect. First, USCIS would have to draw up the proposed regulation, submit it to public scrutiny and commit during the so-called “notice and comment” period, and then finalize and implement the regulation. This will probably take at least the better part of a year to accomplish. Also, if any of the 700+ regional centers feel sufficiently threatened by the anticipated decrease in demand for the program that would come as a result of the increase in the investment amount, that regional center, or group of regional centers, could file suit in federal court to block the implementation of the regulation.

Since it goes without saying that an increase in the minimum required investment amount would decrease demand to immigrate to the U.S. under the EB-5 Immigrant Investor Program, our best hope is that Congress does not increase the minimum required investment amount in the extension legislation. Our next wish would be for USCIS to be at least as delayed in pursuing the increase via regulation as it is in adjudicating petitions, or better yet, that it just never gets around to pursuing the regulation, at all. If USCIS does pursue and implement the regulation, we would then rely on the self-interest/self-preservation instinct of the regional centers to prompt one or multiple regional centers to litigate in federal court against implementation of the investment amount increase.

In the meantime, EB-5 investors can lock in the current lower minimum required investment amount of $500,000 by investing and filing the I-526 petition,which is the first stage in the immigration process under the EB-5 program, on or before September 30, 2015.

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Anthony Olson, P.A. - Sarasota Immigration Attorney 
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Telephone:  +1 (941) 362-7100 
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