Linked below is a letter submitted, a few weeks back, by IIUSA in support of the proposed rulemaking of USCIS to adopt regulations (the “Regulations”) that will have a material impact on the EB-5 Program, including a list of recommendations to modify the Regulations to include, in part, the following modifications and/or considerations:
1. Recommendation to expand the material change section of the Policy Manual to apply to investors with I-526 petition approvals but who have not obtained conditional lawful permanent resident status at the time of a material change in the business plan, meaning that the time period to allow material change would accelerate to I-526 Petition instead of permanent residency status.
2. Recommendation that the priority date retention rules should also apply to investors whose conditional LPR status have already been obtained.
3. Allow investors whose I-526s have been revoked or would be subject to revocation due to fraud or willful misrepresentation of material fact by the project or regional center to benefit from the priority date retention rules.
4. Not a recommendation but notice that the NPRM’s proposed increase in the minimum investment amount will decimate EB-5 Program.
5. Similarly, another notice that the actual historical investment amount was $500,000 as opposed to the $1 million minimum investment amount (“MIA”).
The IIUSA letter analyzes the use of the EB-5 Program and the minimum investment amount since the Program’s inception. Although this portion of the response regards the MIA, it is critical to note that while the MIA is and has always been $1,000,000, nearly 95% of all EB-5 investments between 2000-2016 went into projects located within a TEA, thereby qualifying for the lower investment amount of $500,000. The analysis immediately below regarding demand, therefore, is of the demand at the actual historical investment amount of $500,000, and NOT the $1,000,000 investment amount, which the NPRM proposes to increase to $1.8 million.
6. The proposed increase to the minimum investment amount will result in a decrease to the overall EB-5 job creation and capital investment.
7. A strong consideration alerting USCIS that increasing the minimum investment amount would make the EB-5 Program less competitive internationally. The IIUSA letter considers the following points:
- The non-financial disadvantages of EB-5 as compared with other countries’ immigrant investor programs.
- That EB-5 is a job creating program, which includes an immigration risk if the required number of jobs are not created.
- An EB-5 immigrant investor’s investment must be “at risk”.
- Visa retrogressions make the EB-5 Program significantly less competitive.
- Extended and inconsistent EB-5 processing times to achieve U.S. permanent residence magnify such unattractive features.
- There is programmatic risk and uncertainty stemming from short-term program authorizations. Couple this with some other unique EB-5 issues and the program becomes less competitive as compared with other global migration programs.
- Cost comparison of the EB-5 Program with other countries’ immigrant investor programs.
8. The IIUSA proposed minimum investment amount is as follows:
|Year||Minimum Investment Amount||TEA Investment Amount|
|Third and beyond||$100,000||$800,000|
9. A clear consideration against retroactive application of the NPRM’s increases in the investment amount or TEA designations.
10. Removal of conditions.
IIUSA is supportive of the technical changes proposed in the NPRM. These include (1) clarifying the process for derivatives filing I-829s separately from principal investors; (2) enhancing flexibility in determining the interview location for I-829 adjudication; (3) improving the process for receiving permanent resident cards such as discontinuing district office processing of I-829 petitions due to the move towards biometric data and fingerprinting that is now required – allowing for cards to be mailed directly to investors.
11. Expansion of a regional center’s designated geographic area with I-924 or I-526 petition filing.
Ultimately, while there are some laudable proposals and considerations outlined in the IIUSA Letter, such support is somewhat controversial given the fact that many industry practitioners are concerned that once the Regulations are adopted, there will be less pressure on Congress to pass legislation that is more user-friendly to the EB-5 Program since the Regulations will affect the willingness of certain factions to negotiate new legislation. Furthermore, there are no assurances that the proposals advanced by IIUSA will be adopted in any material manner and such tentative support for the Regulations could be viewed as actual and final support.
The letter from IIUSA can be found here.