New EB-5 Regulations Struck Down By U.S District Court: $500,000 Investment Sufficient For A Short Time

A lawsuit challenging EB-5 regulations was successful on June 22, 2021, as the U.S. District Court for the Northern District of California ruled that the regulations were not lawfully promulgated.

The regulations at issue, which came into effect in November 2019, significantly increased investment amounts from $500,000 to $900,000 for investments in a targeted employment area (TEA) and from $1 million to $1.8 million for investments not in a TEA. The regulation also restricted the ability for investments to be considered within a TEA and made other changes to the EB-5 visa category.

As a result of the ruling, the minimum investment amount for an investment located in a TEA is temporarily reset at $500,000, and the other changes noted above are no longer in effect.

However, the long-term impact of the ruling is yet to be fully understood. The court declined to enjoin or prohibit the current Department of Homeland Security from reinstating the rule. The DHS may, therefore, appeal and seek a stay of this ruling or decide to embark on new rule-making going forward.

If you have any questions or would like to discuss the implications of this change, please reach out to Mark Ivener at markaivener@icloud.com