OZ and EB-5 Investments

The blog for insights and updates on Opportunity Zone and EB-5 Investments

Latest from OZ and EB-5 Investments

USCIS New Policy Guidelines for Managing EB-5 Visa Petition Inventory & Other Updates Last week, USCIS issued significant Policy Guidelines concerning its stipulated attempt to address fairness concerns with coordinating I-526 petition adjudications with U.S. State Department visa allocations. In its release, USCIS announced that starting March 31, 2020, it will change the adjudication process for Form I-526 Petitions from a first-in, first-out basis to a visa availability approach. USCIS will host a public forum on March 13, 2020, at 11:00 am EST, to provide further information on this change. However, we suspect as with past stakeholder engagements, that the…
This blog shall provide a brief summary of the status of the pending lawsuit related to the New Regulations issued by USCIS and effective November 21, 2019, as well as a status report on pending legislation. Needless to say, the market is in a confused state given the uncertainty of what will transpire going forward. As an industry, we are now dealing with the New Regulations which in effect eliminates non-TEA projects from the marketplace since it is very doubtful that investors will invest $1,800,000 to obtain a green card, especially given all the delay and extra costs being encountered…
For the past 4 weeks, the EB-5 industry has been anxiously awaiting the status of the pending complaint filed in the United States District Court in the District of Columbia by a Florida regional center against USCIS and other related parties in order to block the enforceability of the New Regulations published by USCIS that became effective November 21, 2019 (the “New Regulations”). As a result of such action, industry experts are taking a precautionary standpoint in analyzing how to deal with investors who would otherwise invest at a $900,000 level, assuming that the new TEA standards have been satisfied…
On December 6, 2019, the Treasury announced that the final regulations had been issued and sent to OMB for approval. On December 19, 2019, the final regulations package, totaling over 500 pages, was officially published. Separate blogs will be posted after we digest the contents of the final regulations. “Opportunity Zones are helping to revitalize communities and create jobs for hardworking Americans,” said Secretary Steven T. Mnuchin. “These regulations provide clarity and certainty for investors, which will enhance the flow of capital to new and expanding businesses, and create sustained economic growth in communities that have been left behind.” The…
Saul Ewing Arnstein and Lehr LLP has been extremely active in navigating the current status of the EB5 industry and determining what courses of action need to be taken given the existence of the new regulations (“New Regulations” or “REGS”), the possibility of the pending legislation being adapted, and the recently-filed temporary restraining complaint against USCIS and related parties in order to invalidate the REGS. The current EB-5 Regional Center Program has been extended by a continuing resolution until December 20, 2019.  However, on July 24, 2019, USCIS published new regulations that became effective on November 21, 2019, and until otherwise modified by…
On September 27, 2019, Francis Suarez, the Mayor of Miami, sponsored an OZ Expo conference for the City of Miami.  Prior to the conference, one of our clients hosted a lunch for the dignitaries who attended the conference that included Secretary of HUD Dr. Ben Carson, Mayor Francis Suarez, the Acting Administrator of the of SBA for the United States, Chris Pilkerton, as well as national and local representatives of the SBA, representatives from HUD, representatives from the Opportunity Zone Division of the Federal Government including Scott Turner, Executive Director, White House Opportunity and Revitalization Council, representatives of the local…
Updated Information After the Annual IIUSA Meeting Held in Washington, DC May 6 and May 7, 2019 IIUSA hosted a very targeted annual conference in Washington, D.C., to discuss the status of the EB-5 industry and focused on various specific matters of interest to the group. The major takeaway from the meeting was a speech by Charles Oppenheim, Chief Analyst for USCIS, who provided overall information related to retrogression in various countries, the visa backlog, the utilization of the program among the major countries and the rest of the world as well as the panelists’ general comments related thereto.  In…
Five attorneys of the Saul Ewing Arnstein & Lehr LLP firm attended the annual OZ Expo Conference in Las Vegas.  The conference was very well attended with an estimate of 1,400 participants and further solidifying that the OZ Expo team is best in class with its reach and expertise in this space.  The two-day event had an extremely diversified agenda that addressed many of the issues currently faced in the industry.  Takeaways from the meeting can be summarized as follows: 1. Various governmental agencies were represented at the conference, including specific states as well as a contingency from Puerto…
The Treasury Department has just released the second round of proposed regulations on opportunity zones. This 169-page regulatory package addresses some of the questions raised after the first round of regulations, and may make it easier for operating businesses to qualify as eligible opportunity zone investments. In addition, recognizing concerns about whether opportunity zone investments would have the appropriate social impact, Treasury Department announced that it may request more information reporting to help it gather data on the impact of opportunity zone investments, and is seeking public input on what information should be collected and how. We are reviewing the…
The OZ industry is experiencing some degree of frustration due to the delay in the updated proposed regulations being issued by the Treasury Department.  It is believed that the new draft proposed regulations have already been prepared and sent to OMB for comment and approval before being released.  We understand that OMB takes up to thirty (30) days to complete that process and may have already provided further comments to the Treasury Department in which case the process will continue until the proposed regulations are finalized.  Some professionals have indicated that the regulations should be released by the end of…
Recent Proposed Regulations Recently, USCIS has sent new regulations related to the EB-5 Program to the Office of Management Budget (“OMB“).  Thereafter, the proposed regulations would then be sent to the General Accounting Office (“GAO“) and then will be subject to administrative approval.  It is difficult to predict what the net result of the regulations will be, including the increase in the investment amounts for both non-TEA and TEA designated projects, and the potential for phasing, if any, of the investment amount increases.  The regulations will also address the priority dates for the I 829 petitions, address the ability of…
Current Press The Opportunity Zone industry has been receiving continuous press, almost on a daily basis.  The latest article I received was a report in the February 27, 2019 Wall Street Journal on page B6.  It is entitled “Investors Rush to Beat Clock Ahead of Change in Tax Rules.”  The article talked about McDougal Cos.’ recent purchase of an 8,000 square foot former movie theater in Lubbock, Texas, for conversion of same to a mixed-use project.  The company needed to undertake an OZ fund immediately to take advantage of the tax benefits.  Other examples of acquisitions include an…
The Opportunity Zone industry is getting substantial attention, as noted by the enclosed article published by the New York Times related to “Wall Street, Seeking big tax Breaks, Sets Sights on Distressed Main Streets.”  Obviously, OZs are receiving mixed attention given the fact that a significant amount of OZ transactions will take place in regentrified areas that are highly desirable and not necessarily distressed.  It is anticipated that the new proposed regulations should be issued by the end of March, 2019. As a separate matter, we are still awaiting the status of state concurrency as to what states will…
Saul Ewing Arnstein & Lehr LLP attorneys Ronald Fieldstone, Rohit Kapuria, Jay Rosen and Roger Bernstein attended the Opportunity Zone Expo Conference in Los Angeles on January 25, 2019.  Much to their surprise, the attendance was over 1,000 people, which may be a record from an OZ attendance standpoint. The program itself was extremely well presented and in attendance were representatives from all disciplines, including fund managers, fund advisors, private equity firms, developers, investors, professionals, fund administrators, as well as government officials who were there to actually make presentations on the government aspect of the OZ program. Our takeaways from…
I just attended the combined AILA/IIUSA Conference in Chicago.  The low attendance reflected the general mood of the industry that there is significant pull back in EB-5 investments in various jurisdictions, especially in mainland China and Vietnam.   During the meeting on Tuesday, October 30th, Charles Oppenheim, Chief, Immigrant Visa Control and Reporting, U.S. Department of State, announced potential visa retrogression.  The relevant chart is attached to this Blog.  As is noted, it is predicted that India will retrogress next year, for up to 5.7 years.  The retrogression in Vietnam has increased to over 7 years, with retrogression in China…
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…