Review of 2018 Changes to EB-5 Part 3: Changes to EB-5 Requirements and General Trends

Over the past few weeks, I have been posting thoughts on the key EB-5 developments of 2018. We’ve covered changes to the Regional Center Program, as well as the shifts in wait times and utilization that the program has seen recently.

Today I’ll be closing out our 2018 review series by discussing the changes that we expected to see to the program in 2018, the changes that actually took place, and what this all means for EB-5 moving forward.

Potential Changes to Minimum Investment Amount

One of the most discussed topics of 2018 in the EB-5 industry was the potential increase in minimum investment amounts Throughout the year we saw a number of potential increase dates come and go, and prepared for increases that could have more than doubled the minimum investment amount from $900,000 to $1.35M. USCIS continues to review public comments on the proposed investment amount increases, and the Office of Management and Budget has missed multiple expected dates to finalize EB-5 investment rules. So far this has been a good thing for the EB-5 industry as lower minimum investment amounts mean that more global investors can potentially afford to the EB-5 investment.

Other Key Developments

Even as USCIS, DHS and Congress struggled to solidify EB-5’s path forward with new rules and legislation, there were a few meaningful developments for the program in 2018. Updates to the USCIS Policy manual made during 2018 helped to clarify that investors with pending I-829s will be able to obtain documentation of their CPR status from USCIS. We also saw a shift tenant occupancy methodology that will make it more difficult for future investors to credit tenant jobs to their EB-5 investment. Regional center geographic requirements were updated in 2018, making it more difficult for a Regional Center to expand their geographic scope. Finally, a variety of cases settled in the courts this year gave us more clarity on how cash obtained through debt arrangements can be used in EB-5 cases.

What to expect in 2019

Thus far the new year is off to a rocky start politically. With the longest government shutdown in history hitting the government at the beginning of the year, it looks like we may have another year or contention and slowdown in both the Executive and Legislative branches this year. This may impact the finalization and implementation to changes in the EB-5 program.

THE GOOD NEWS IS THAT THE $900,000 MINIMUM INVESTMENT AMOUNT HAS BEEN EXTENDED UNTIL SEPTEMBER 30, 2019.