Recent news from Washington D.C. indicates that negotiations in Congress on an EB-5 reform bill have progressed. The last major news on EB-5 legislation came in April 2017, with the release of the drafts of the American Job Creation and Investment Promotion Reform Act of 2017 and the EB-5 Immigrant Investor Visa and Regional Center Program Comprehensive Reform Act of 2017. Republicans (Cornyn, Grassley, Flake, and Goodlatte) and Democrats (Lofgren and Conyers) have been negotiating in good faith to reform the EB-5 Program.
It’s possible Congress could agree to enact the reforms on or before December 9, 2017. While discussions continue, certain reform priorities are becoming clearer. Below is a comparison on where key elements still need to be finalized.
|Rural (R)/Urban Distressed (UD)||Non set-aside visas|
|Definitions||R: Base law + census tracts that would qualify under base law except for the fact that they are located in the outlying counties of MSA’s with population densities of less than 400 psm + Hatch fix
UD: Must meet 2 out of 3 of the New Market Tax Credit Criteria
|Number of Visas Newly Available Per Fiscal Year||• 1500 R (other than luxury rural) and 1500 (UD)
• Unused set-aside visas are available in future years for aliens investing in projects meeting the criteria of the relevant set-aside category
• Set-aside visas available on DOE
|Investment Amount||$925,000 (with future adjustments for inflation)||$1,025,000 (with future adjustments for inflation) for all projects (including those meeting the R/UD criteria)|
|Job Creation Requirements||5 indirect jobs||current law|
|Exemplar Premium Processing||1 year||current law|
|Phase in:||• 4 month moratorium after DOE on the filing of I-526s and I-924s||• 4 month moratorium after DOE
• In months 5-12 after DOE, up to 7,000 investors and their derivative spouses and children can be approved for visas at an investment level of $925,000
|Fee Applicable to Non-Set Aside Visas||N/A||• $25,000, split evenly between investor and regional center; OR
• $50,000 paid by regional center.
|Grandfathering||All investor visa petitions approved as of the DOE or pending on the DOE are subject to a $500,000 investment amount.||same|
|Effective Date of New R/UD Distressed Definitions||The new definitions apply with respect to all I-526s filed on or after the DOE||N/A|
|Backlog Relief||For 1 year after DOE, any unused set-aside visas may be used by investors who had filed petitions pending as of DOE that meet the new definitions of R/UD||N/A|
We are happy to see that Congress appears to have agreed on the “grandfathering” of the current EB-5 Program for I-526 petitions filed prior to the date of enactment. We will be providing more analysis on this development later this week.
In the meantime, Attorneys Bernard Wolfsdorf and Joseph Barnett are traveling to Miami to speak at the 7th Annual EB-5 Industry Forum put on by IIUSA. Bernard will be moderating the panel “Prepared for the Long Haul: Understanding the Visa Backlog Today & Planning Ahead” with Mr. Charles Oppenheim, the Chief of the Visa Controls Office, U.S. Department of State. Joseph will be speaking on the panel “Regional Center Trends in 2017: Terminations More Popular Than Approvals (and Everything Else You Need to Know)” which will discuss examples of failed EB-5 projects - what went wrong and why - and how investors, regional centers, and EB-5 projects can fulfill their immigration, job creation, and economic goals.