Statement from Mark I. Davies, Global Chairman, Davies & Associates
A federal judge ruled last night that one of the heads of the Department of Homeland Security under President Trump was not properly appointed, thus invalidating the EB-5 price increase from USD 500,000 to USD 900,000 in November 2019.
Within hours of the court decision, our firm received scores of inquiries from potential EB-5 investors who are hoping to avail themselves of the opportunity to invest in an EB5 qualifying project at USD 500,000.
While a window now potentially exists until June 30th when the current Regional Center program expires, the next 24 to 48 hours are crucial as a response from USCIS is anticipated.
The anticipated response from USCIS could include filing an appeal or taking other administrative actions to close the new USD 500,000 window. Our clients who prepared EB-5 cases in the last few weeks may now be able to file their EB-5 case at USD 500,000, while others may not be able to given the timeframe and contingencies involved.
This also re-raises the question of responsible partial filing. If carefully structured using escrow accounts and special fixed deposit accounts – that only allow for maturing funds to be remitted to the Regional Center – partial funding can be executed in a low-risk manner.
Please contact our firm if you would like more information or wish to progress your EB-5 application.
What is EB-5 Investor Visa?
The EB-5 Immigrant Investor Visa Program allows an investor to obtain US permanent residency (Green Card). The required investment was $900,000 in a Targeted Employment Area and $1.8 million outside of a TEA. The ruling changes this back to the pre November investment requirements of $500,000 and $1 million respectively. A family can receive visas under one investment provided the children are under the age of 21 at the point they receive a conditional Green Card – not at the point of submitting the application or having it approved.
It is possible to make and manage the investment yourself through so-called Direct EB-5. But the vast majority of applicants opt to invest through a Regional Center. A reputable RC with a good project can help to mitigate risks to both your Green Card and the return of your invested capital. Complying with the EB-5 rules can be tough for Direct EB-5 because you are required to create and sustain ten full-time jobs. Regional Centers are permitted a different job creation metric and use the funds for job-hungry projects.
The EB-5 Regional Center program is set to expire at the end of June 2021. Congress must reauthorize the process. There are competing vision for reform, which is causing legislative friction. Compromise is needed if Congress is to reauthorize a program that brings millions of dollars of investment and creates hundreds of thousands of jobs. Direct EB-5 remains unaffected.
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