EB-5 Regulations Extended to September 30, 2018, But May Still See Changes

The new law passed by Congress and signed into law by the President will extend the EB-5 program until September 30, 2018. This extension was enacted in a single reference in the bill (page 1,759, lines 20-24) which extended current regulations from September 30, 2015 to September 30, 2018.

This means that for the time being the current rules, including the $900,000 minimum investment amount for investments in a Targeted Employment Area (TEA), will remain in place. All existing EB-5 investments meet the current regulation.

With this said, there is still a chance that key pieces of the EB-5 program will be changed in the near term. The Department of Homeland Security (DHS) has already planned making changes to the EB-5 Program, including implementing new Integrity Measures and increasing minimum investment amounts, potentially to as much as $1.8m. DHS has the power to enact these new measures at any point, so we are keeping a close eye on this.

As of April 2017, DHS provided an outline of proposed changes. This outline included increases for all minimum EB-5 investment amounts, to $1.35M in a TEA (up from $500K) and $1.8M outside of a TEA (up from $1M). Combined with increased Integrity Measures and tightened TEA qualifications, the new regulations would likely cause most projects to have minimum investment amounts of $1.8M.

DHS has opened the outlines for comments, and thus far the response has been largely against the proposed investment amount increases. We expect that even after comments, there will likely be an increase in investment amounts, but are optimistic that DHS will respond to comments by lowering the increases, probably to a minimum of $1M.

Finally, it is unclear what grace period, if any, would be afforded if DHS makes any regulatory changes. With that in mind, we urge anyone considering EB-5 to get in touch with an attorney to begin assessing their options as soon as possible.