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Immigration Law

EB-5 Investor Visa Expert Comments on Coming Changes

Keith Larsen, The Real Deal, Oct. 21, 2019

"EB-5 has gotten a jolt of life, but experts say the program could soon flatline.

New federal regulations will nearly double the minimum dollar amount that all foreign visa-seekers must plow into  development projects. Because the rules take effect Nov. 21, investors have been rushing to get in at the existing minimum, according to developers, attorneys and regional center directors who handle much of the EB-5 transactions.

Investment requirements will rise to $900,000 from the existing $500,000 for a project in a low employment zone — known as a targeted employment area. They will also climb to $1.8 million from the existing $1 million in all other areas. The new rules also prohibit developers from what had become a common practice of tacking a sliver of a targeted employment area to a project that is in a wealthier area in order to qualify for the lower amount. The higher minimums are adjusted for inflation, the first time they have been raised in the program’s 30-year history.

Industry pros say the new rules will make it more difficult for developers to secure financing for projects, a reality that has prompted some developers to go dialing for dollars themselves before the deadline.

... Steve Yale-Loehr, an expert on the federal program, said that most of the existing EB-5 investments nationwide are at the $500,000 level. But after next month’s deadline, fewer than half of all EB-5 projects will be allowed at that threshold, said Yale-Loehr, a Cornell Law School professor who focuses on immigration."