EB-5 Investment Threshold $500,000
Under the EB-5 program, investors (as well as their spouses and unmarried children under 21 years of age) are eligible to apply for permanent residence if they meet the following conditions: 1) making the required investment in a commercial enterprise in the United States; and 2) planning to create or preserve 10 permanent full-time jobs for qualified U.S. workers.
Several changes to the EB-5 Immigrant Investor Program went into effect Nov. 21, 2019 under a rule published by the U.S. Department of Homeland Security. Among these, the required minimum investment amounts were increased to $1.8 million (from $1 million) to account for inflation. In parallel, the minimum investment in a Targeted Employment Area (TEA), that is, a rural area or one with high unemployment, increased to $900,000 (from $500,000), also to account for inflation. Finally, USCIS stated that it would no longer defer to TEA designations made by state and local governments. These changes resulted in much longer processing times for investor applications through the EB-5 program, and consequently, caused a drastic reduction in the number of investor petitions since November 2019.
Change in Law
In welcome news for investors, however, on June 22, 2021, U.S. District Court of the Northern District of California ruled in favor of Behring Co., a real estate developer, in its request to vacate the 2019 EB-5 Modernization Rule implemented by the Department of Homeland Security (DHS). U.S. Magistrate Judge Jacqueline Scott Corley of the Northern District of California reasoned that acting DHS secretary at the time, Kevin McAleenan, had been improperly appointed to his position. As a result of this determination, Judge Corley ruled the 2019 DHS Modernization Rule raising the minimum investment amount that immigrants seeking green cards through the EB-5 investor program had to pay to $900,000 from $500,000 was improper.
As the court’s decision restores the original rules for the EB-5 program created by the Immigration Act of 1990, the EB-5 program therefore now once more requires a minimum $500,000 investment in a U.S. business located in a TEA that would create at least 10 full-time jobs for American workers. The full impact of this decision remains to be seen, given the uncertainty of DHS’s reaction to the ruling and the potential for appeals. However, should the change in law persist, the reversion to the original rule with a lower financial threshold for investment makes it likely that the number of applications for investment through the EB-5 visa category will increase in the near term as investors make their best efforts to contribute funds while conditions to do so are once again favorable. This change in law opens up options for many investors already in the US on an E2 Visa.