The forces for change seem to finally be coming together to provoke real change in EB-5. After several short-term extensions to the Regional Center program, there is now the firm chance that key elements of the EB-5 program will be reformed in this current legislative cycle that ends on September 30, 2017. While the need for a renewal only applies to the Regional Center program, legislators have often said that the changes to the minimum investment amount and which projects can qualify for it should be undertaken at the same time as a full Regional Center program extension. Even without legislative action, the US Department of Homeland Security, of which United States Citizenship and Immigration Services (USCIS) is a part, has the power to effect these same changes. The real question is not if these changes will be made, but rather by whom (Congress of USCIS) and the exact amount.
It is important to note that USCIS has proposed a change in the current EB-5 rules, which would increase the minimum investment amount to $1.3 million for projects that qualify/are located in targeted employment areas (TEAs) an $1.8 million that are not. The proposed rules would also limit what can be counted as a TEA.
A key factor that increases the likelihood for change in the last several months is the support of Senator Cornyn of Texas. Senator Cornyn is the second ranking Republican in the Senate. The Senate Majority Leader, Senator McConnell, generally defers to Senator Cornyn on matters related to EB-5 policy. In previous attempts to reform the program, it was Senator Cornyn who prevented the legislation from advancing. Today, that is no longer an impediment.
Another important factor is that the Congress, for the first time this year, is not in the midst of other significant legislative action. During the last widow for EB-5 reform, the Congress was all consumed with the appointment of a new Supreme Court Justice and reforming the American health care system.
To the prospective EB-5 investor, it is critical that he or she understand what this timing means. If the rules or law changes, what would have been $500,000 may cost $800,000 or even $1.8 million. Also keep in mind that the US EB-5 rules require that investors document that their investment capital comes from only legal sources. It often takes investors several weeks to compile all the needed documentation. Accordingly, anyone who wants to ensure the lowest cost related to getting a US Green Card through the EB-5 program, should begin the process immediately.
Matt Gordon is a noted policy expert in the visa-based investments field and is an authority on structuring visa-based investments. Mr. Gordon’s career spans business operations, finance and law. He is the editor of the EB-5 Book, the legal treatise on the EB-5 program and a frequent lecturer to immigration attorneys. Mr. Gordon has participated in policy events, including those hosted by the White House and Harvard University’s Kennedy School of Government. Prior to founding E3iG, Mr. Gordon was an investment banker for a decade and ran the US division of a Swiss multi-national corporation. Mr. Gordon is a licensed attorney, having practiced mergers and acquisitions law at the beginning of his career with the largest and most reputable Wall Street firms including Fried Frank and Sullivan & Cromwell. Mr. Gordon received his B.S. in Policy Analysis from Cornell University and his J.D., cum laude, from the University of Pennsylvania School of Law.