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EB-5 Insights

Where Government Policies and Business Realities Converge

Posted in Continuing Resolution (CR), EB-5, EB-5 Immigrant Investor Program, EB-5 Program

Yesterday, House Majority Leader Steny Hoyer (D-MD) introduced a continuing resolution (CR) to fund government from end of the current fiscal year, Sept. 30, until Nov. 21, 2019. By a vote of 301-123, the House today passed H.R. 4378, the CR that will fund the government through Nov. 21.

To EB-5 advocates, this timing is significant in that this CR extends the program coterminous with implementation of the recent Obama-era regulations. This timing continues to provide the opportunity for stakeholders to advocate and negotiate needed legislated industry reforms and a programmatic “better way forward” from the Obama-era regulations.

It is widely believed that the CR will be considered by the House this week and sent to the Senate. Reports vary as to when the Senate will schedule consideration, but it is expected that clearance by the Senate and signature of the president will occur prior to Sept. 30 (the fiscal year deadline). It is, as of this writing, believed that there will be no government shutdown over this CR.

CRs have become necessary in recent years to keep government open. The good news is such processes are available and being used to keep government open. The bad news is that this process may need to be utilized several more times this Congress due to spending differences between the House, Senate, and White House.

From Politico Pro: Congress has enacted one or more continuing resolutions “in all but three of the last 43 fiscal years,” the Congressional Research Service noted in an April report.

Please contact your GT attorney with any questions and please check back, as we expect more CR and end-of-year activities.

For more on continuing resolutions, click here.

Posted in Awards & Recognitions, Immigration

Jennifer Hermansky and Fang Xie, Ph.D., attorneys from global law firm Greenberg Traurig, LLP, have been named to Law360’s 2019 Rising Stars. Hermansky and Xie, named an Immigration Rising Star and a Life Sciences Rising Star respectively, were recognized among 175 attorneys from 1,300 submissions, spanning 39 practice areas. The list highlights attorneys “whose legal accomplishments transcend their age,” according to Law360.

To read the full press release, titled “Jennifer Hermansky & Fang Xie Named Law360 Rising Stars,” click here.

Posted in EB-5, EB-5 Immigrant Investor Program, EB-5 Investment, EB-5 Job Creation, EB-5 Modernization Rule, EB-5 Program, Immigrant Investor, Immigration Reform, Legislation

According to multiple media sources and independently confirmed, last week U.S. Senator Rand Paul (R-KY) circulated a “Dear Colleague” letter seeking co-sponsors to a process called the Congressional Review Act (CRA) to negate the recently proposed Obama-era EB-5 regulations.

The CRA provides Congress with a 60-day window to seek sufficient support – here, 30 senators – on a Resolution of Disapproval requiring simple majority passage in both bodies, and presidential signature to negate the regulations.

According to EB-5Investors.com, a huge proponent of the EB-5 Program, Sen. Paul is seeking to stop the EB-5 modernization regulation from increasing the EB-5 minimum investment amount in targeted employment areas from $500,000 to $900,000, and the EB-5 minimum investment amount in non-targeted employment areas from $1 million to $1.8 million. He also hopes to stop the regulation from taking away, or at the very least, restricting states’ abilities to designate targeted employment areas, the blog notes.

If the new rule were to go into effect, Sen. Paul said, “…this rule may undermine the very purpose of the program, which is to create jobs and grow the economy.” This is because raising the minimum investment amount could soon make many foreign investors ineligible for the program.

If fewer foreign investors qualify for the EB-5 Program, it could mean less foreign investment in the U.S. This could have a significant impact on the U.S. economy.

The Congress will return from recess in September. We expect intense end-of-year fiscal negotiations that will include extension of the EB-5 program, Sen. Paul’s efforts, and other attempts to provide for more thoughtful legislated reforms.

Please contact your GT attorney with any specific questions, and check back here for updates.

For more on EB-5 modernization, click here.


Posted in Department of Homeland Security, EB-5, EB-5 Immigrant Investor Program, EB-5 Program, USCIS

In a recent Law360 article, Jennifer Hermansky, shareholder in Greenberg Traurig’s Philadelphia office, provides insight on how attorneys can prepare clients for unannounced site visits and questions from the government given the U.S. Citizenship and Immigration Services’ recent efforts to step up compliance checks on the EB-5 investor visa program. She shares a few strategies for dealing with EB-5 compliance checks.

To read the full article, click here (subscription).


Posted in Department of Homeland Security, EB-5, EB-5 Business Plan, EB-5 Immigrant Investor Program, EB-5 Industry stakeholder groups, EB-5 Investment, EB-5 Job Creation, EB-5 Legislation, EB-5 Modernization Rule, EB-5 Program, EB-5 Project, TEA, USCIS

As previously blogged (see EB-5 Regulations Published for Public Inspection), the EB-5 regulations have been published as of July 24, 2019, as final, to take effect Nov. 21, 2019.  Below is a summary of the changes that will impact the EB-5 program:

  1. Priority Date Retention: Generally, priority date retention can be retained from an approved I-526 petition if the investor needs to file a subsequent I-526 petition, even if it was a petition that was approved and then later revoked (unless revoked for fraud or a willful misrepresentation of a material fact by the investor, or if USCIS determines that the petition approval was based on a material error). However, if the petitioner uses the approved petition’s priority date to obtain conditional permanent residence, that priority date may no longer be used for subsequently filed EB-5 petitions.
  2. Increased Investment Amounts: The rule increases the minimum investment amount from $1 million to $1.8 million, which represents an adjustment for inflation from 1990 to 2015. Future inflation adjustment formulas will be based on the initial investment amount set by Congress in 1990 ($1 million). For those investors who are investing in a new commercial enterprise principally doing business in a Targeted Employment Area (TEA), the minimum investment amount will be $900,000, an increase from the original $500,000. The final rule also sets for adjustments to occur every five years.
  3. TEA Designations: The new TEA definitions clarify that any city or town with a population of 20,000 or more outside of a metropolitan statistical area (MSA) may qualify as a TEA, and substitute “contiguous” for “directly adjacent” when describing census tracts that can be added for purposes of defining a TEA (under distress criteria). This is different from the proposed rule that allowed any city or town with a population of 20,000 or more to qualify as a TEA, regardless of being in or out of an MSA. In addition, these regulations remove any mention of “geographic and political subdivisions” for special designations. DHS believes this will ensure consistency in TEA adjudications that adhere closely to congressional intent. DHS will make these designations, which eliminates the current practice of a state being able to designate certain areas as high unemployment areas.
  4. Removal of Conditions: If derivative family members were not included in the petition to remove conditions, they must separately file their own petitions to remove the conditions on their permanent residence. This also includes a provision where the following individuals may be included in the investor’s petition or each file a separate petition: 1) a child who has reached the age of 21 or who married during the conditional permanent residence period; or 2) a former spouse who became divorced during this  period. If the investor dies, the spouse and children may file separate petitions or be included in one petition.
  5. For pending petitions on or after the effective date: DHS will not deny the petition if the project documents are amended to meet the new criteria.

GT will continue to monitor the activities relating to these published regulations. If you have any questions, please contact your GT attorney.

Posted in Department of Homeland Security, EB-5, EB-5 Immigrant Investor Program, EB-5 Industry stakeholder groups, EB-5 Investment, EB-5 Job Creation, EB-5 Legislation, EB-5 Modernization Rule, EB-5 Processing Times, EB-5 Program, EB-5 Project, I-526, I-829, I-924, Uncategorized

After years of delay the Obama-era EB-5 immigration regulations were published on July 24, 2019. You can find a copy of the regulations at this link. You can also find a summary of them here. The regulations only apply to those who file their I-526 Petitions on or after Nov. 21, 2019. Without further ado, below are some winners and losers of the new regulations.

Those who will lose out with the new regulations

States. States are one of the biggest losers, as DHS has decided to formally remove any state input from the determination as what qualifies as a targeted employment area (TEA). Given that the EB-5 visa category is fundamentally an economic development program, the removal of state input neuters any localized input on the what, who, and where of these investments. This position is contrary to the original implementing regulations, wherein the predecessor agency to DHS had found that “…the Service believes that the enterprise of assembling and evaluating the data necessary to select targeted areas, and particularly the enterprise of defining the boundaries of such areas, should not be conducted exclusively at the Federal level without providing some opportunity for participation from state or local government.”1 DHS no longer feels this way.

Less wealthy investors. The final regulation increases the minimum investment for rural areas and targeted employment areas to $900,000. Investments not within those areas must be $1,800,000. Regardless of the rationale for the increase, the increase will shrink the pool of prospective investors who have sufficient means to make such an investment.

Conditional permanent residents in failed projects. While there is a positive side to priority date retention, which will be discussed below, DHS’ decision to draw a line as to who is eligible for priority date retention clearly puts conditional permanent residents in failed projects into the loser category. Under the new regulation, an investor can retain the priority date from an approved I-526 Petition as long as (a) USCIS did not revoke the earlier approval based on the investor’s fraud or willful misrepresentation, (b) USCIS did not revoke the earlier approval based on a material error, and (c) the investor has not been admitted to the U.S. as a conditional permanent resident. Thus, if an investor has, pursuant to an approved I-526 Petition, entered the United States as a conditional permanent resident and previously used the I-526 to become a conditional permanent resident, and circumstances outside the investor’s control make it such that the investor will not be able to remove the conditions on residence (i.e., not enough jobs are created), the investor must file a new I-526 Petition with a new priority date in order to continue seeking permanent residency under the EB-5 visa category if he or she cannot otherwise meet the eligibility requirements under the policy outlined on material change in the USCIS Policy Manual.

DHS explained that it declined to include investors who have been admitted as conditional permanent residents because it believes a priority date cannot generally be re-used in other employment or family-based visa categories; the goal of this regulation is to protect against the effects of retrogression, and there are other protections for investors who are conditional permanent residents to remove the conditions on residence. These rationales fail to hold up under scrutiny.

While it is accurate that a priority date cannot generally be re-used in other employment or family-based visa categories, the other visa categories are simply not analogous or comparable. There is no other employment or family-based visa category subject to visa availability (retrogression) that requires conditional permanent residency before a final grant of permanent residency. The only analogous category is spouses of U.S. citizens, who receive conditional permanent residency for a two-year period, and who are not subject to visa availability because spouses of U.S. citizens are classified as immediate relatives (a visa number is always available). Thus, DHS was unable to find a parallel in other employment or family-based visa categories because no such parallel exists.

The effects of retrogression will also be felt acutely by investors who are conditional permanent residents. For instance, a conditional permanent resident born in India may have been able to enter the United States prior to the recent retrogression for Indian-born investors. If that investor is required to refile a new I-526 Petition and process with a new priority date, that investor will likely be forced to depart the United States and wait abroad for eight or more years until a visa is available based on the new priority date.

Lastly, while it is true that the statute, regulations, and policies provide other avenues for investors in conditional permanent residency status to remove conditions, none of those avenues protect investors from a total project failure where money is spent and not enough jobs are created, or where a project fails to move forward. In those circumstances, conditional permanent residents would likely have to self-deport, unless they were eligible for another immigrant or nonimmigrant visa category, and file a new I-526 Petition at the back of any existing retrogression queue if they want to continue to pursue permanent residency under the EB-5 visa category.

DHS. DHS has not done itself any favors with the publication of these regulations. As already discussed above, DHS’ rationale for not permitting a conditional permanent resident to retain their earliest priority date fails under scrutiny. DHS’ rationale in a few other areas also fails to hold up under scrutiny.

While there is a logical argument for an increase in the minimum investment, DHS’ response to comments regarding competitiveness of the EB-5 visa category only discussed one competitor investment visa program, which had a smaller minimum investment than EB-5: the Quebec Program. Instead, DHS focused on Australia, the U.K., and New Zealand. This analysis conveniently omits Portugal and Spain, which grant residency permits for EUR 500,000; Malta, which grants citizenship (Malta is an EU-member country) for approximately EUR 900,000; and Cyprus, which also provides citizenship for approximately EUR 2,500,000. Cyprus and Malta will also grant permanent residency for a lower amount. These are the programs currently competing directly with the United States, and they provide for residency in western European countries with comparable prices to the U.S., and in some instances, for a little bit more money the promise of immediate citizenship.

This analysis also does not include a review of the Caribbean countries that will grant citizenship within a matter of months for less than $500,000. These countries include Grenada, which has an E-2 treaty with the United States. With the increase in the minimum investment to $900,000 under these regulations, it will be far more attractive to obtain a Grenadian passport, establish a U.S. business that qualifies for an E-2, and enter and live in the United States on an E-2 visa.

DHS also takes great pains to establish that it cannot calculate whether or not there will be less applications due to these regulations, and in particular, because of the increase in the minimum investment. This belies common sense, and can only be supported by cherry picking other visa programs around the world which cost more and ignoring those that cost less. Indeed, DHS makes a similar mistake when it references a 10-year forecast of I-526 Petition receipts that – notwithstanding the fact I-526 Petition receipts have fallen by approximately half since 2015 – predicts a 3.3% increase over the next three fiscal years.2 It’s simply not credible that I-526 Petitions receipts, which have fallen in half for three straight fiscal years, would somehow increase, even by a small amount, after an increase in the minimum investment amount.

Lastly, setting aside the policy goals of redirecting investment to the actual area of high unemployment, it seems clear from DHS’ own analysis that there will be detrimental economic impact due to the TEA-related changes. When evaluating the economic impacts of the TEA-related changes, DHS found that 54% of all investments would be affected. Despite this, DHS concludes that the TEA-related changes will “…provide benefits in that additional areas may qualify as a TEA based on high unemployment, potentially offering investors more opportunities to invest in a TEA at the reduced investment amount…” It is unclear how additional areas would qualify as a TEA under a more restrictive definition.

Those who will win with the new regulations

Rural Projects. The clear winners are projects in rural areas. Constraining the ability of urban areas to qualify for the lower investment threshold seems likely to drive a measurable number of investors to projects located in rural areas.

Backlogged investors in stalled/failed projects. As noted above, the flipside of the priority date retention changes is that investors with approved I-526 Petitions, who have not yet become conditional permanent residents due to retrogression or any other reasoning, can file a new I-526 Petition and maintain their old priority date. This is a welcome respite for investors waiting outside the United States for a visa and dealing with a failed or staller project, or a situation where the regional center involved was terminated. As noted above, priority date retention is not available in cases involving fraud, willful misrepresentation of a material fact by the investor, or when DHS determines that it approved the I-526 Petition based on a material error.

Dependents in I-829 Petitions. Currently, dependents may be either included in a principal applicant’s I-829 Petition or added at a later date by paying the biometrics fee. However, if the principal applicant failed or refused to file an I-829 Petition, the dependent would not be eligible to remove the conditions on their residence. Under the new regulations, if a principal applicant refuses to file or fails to file an I-829 Petition, each derivative applicant may file their own I-829 Petition. This could be beneficial to divorced spouses who no longer have contact with their spouses who were the principal applicant. The practical effect of this change is a bit limited, as DHS found an average of approximately 24 cases per year involving these circumstances.

DHS has also clarified via regulation that a child who becomes married during conditional permanent residency and a child who reaches the age of 21 during conditional permanent residency is eligible to file an I-829 Petition, either with the principal applicant or on their own. DHS also clarified that where a principal applicant is deceased, the spouse and child may file separate I-829 Petitions or may file one I-829 Petition together.

Economists. Economists, who were already important, just got a lot more important. Under the prior regulations and the deference by DHS to state-based TEA determinations, it was possible for a layman to determine whether or not a project was located in a TEA. The new regulation states that USCIS may designate as an area of high unemployment a census tract or contiguous census tracts that are directly adjacent, and that have a weighted average based on a labor force employment measure of 150% of the national average unemployment rate. The use of a weighted average is a change from existing regulation and would require a mathematical calculation of unemployment of all applicable census tracts and the labor force of all applicable census tracts. While this information is publicly available through the Bureau of Labor Statistics and the Census Bureau, it seems extremely burdensome for an average lay person to make such a calculation on their own.

Further complicating this issue is that under the new regulations only USCIS can make a determination of whether a project is in a TEA. The new regulations do not establish a separate application or process for obtaining TEA designation from USCIS prior to filing an I-526 Petition, and USCIS will not issue separate TEA designation letters for areas of high unemployment. DHS will make the determination as part of the existing adjudication process. If a regional center prefers to seek a TEA determination in advance of an I-526 Petition adjudication, it can file an exemplar I-924 application and if approved, the approval, including the TEA determination, will receive deference in I-526 Petitions associated with that exemplar. However, this deference is likely short-lived, if applicable at all, because the average processing time for an exemplar I-924 application is longer than the validity of the unemployment data, which is generally valid for one year. Thus, economists will be extremely important to ensuring a project is accurately located in a TEA.

1 See 56 FR 60897-01

2 In fiscal year 2015, USCIS received 14,373 EB-5 petitions; in fiscal year 2016, 14,147; in fiscal year 2017, 12,165; and in fiscal year 2018, 6,424. See U.S. Citizenship and Immigration Services, Number of Form I-526, Immigrant Petition by Alien Entrepreneur, by Fiscal Year, Quarter, and Case Status 2008-2018, available here.

Posted in Department of Homeland Security, EB-5, EB-5 Immigrant Investor Program, EB-5 Investment, EB-5 Legislation, EB-5 Modernization Rule, EB-5 Program, USCIS

After more than two and a half years, Obama-era EB-5 immigration regulations are set to be published on July 24, 2019, with an effective date 120 days after publication or Nov. 21, 2019. See EB-5 Immigrant Investor Program Modernization.

These regulations have been opposed by many industry participants, as evidenced in a letter to Congressional Leadership in May 2019.

For years all involved have called for significant reforms and modernization to the program including:

  • Integrity Measures to Bolster National Security and Fraud Deterrence
  • Long-term Reauthorization
  • Revised Targeted Employment Area (TEA) Definitions
  • Revised Investment Amounts
  • New Set-Asides for Rural and Urban Distressed Areas
  • Visa Backlog Relief

Legislators on both sides of the aisle have specifically called for integrity measures to ensure against fraud. The new regulations do not do what Congress continues to seek to do legislatively, because the agency does not have the requisite authority.

The  EB-5 rule proposed by USCIS in January 2017 proposed two critical things:

  1. Drastically increased investment amounts to $1.35 million and $1.8 million from the current amounts of $500,000 and $1 million.
  2. Changed the definition of “Urban TEAs”, the areas that – along with “Rural” – qualify for the lower investment amount.

The new proposed Urban TEAs would be in the shape of a “donut” – that is, a single census tract that is the “hole” of the donut, surrounded by a ring of other adjacent census tracts. This “donut” approach to TEAs has no precedent in any other statute or regulation that directs capital to economically-distressed areas

The final rule would do the following:

  • The new investment amounts would be $900,000 at the lower level and $1.8 million at the top level.
  • The reported rationale: These are the levels calculated if indexed to inflation from 1992, when the current levels of $500,000 and $1 million first took effect upon the program’s creation.

The new TEA definitions differ from the “donut” approach as initially proposed, by rule “tweaks” to clarify that any city or town with a population of 20,000 or more outside of a metropolitan statistical area may qualify as a TEA and substituting “contiguous” to “directly adjacent” when describing census tracts that can be added for purposes of defining a TEA (under distress criteria). This is different from the proposed rule that allowed any city or town with a population of 20,000 or more to qualify as a TEA, regardless of being in or out of a MSA. In addition, these regulations remove any mention of “geographic and political subdivisions” for special designations.

The reported rationale: DHS believes this will ensure consistency in TEA adjudications that adhere closely to Congressional intent. DHS will make these designations, which eliminates the current practice of a state being able to designate certain areas as high unemployment areas.

The EB-5 Regional Center program expires on Sept. 30, 2019. Congress and stakeholders are working on a reauthorization with much needed policy and legislative changes. If such an extension occurs, the rule published today may never take effect. Only Congress can enact all of the reforms necessary to modernize EB-5. The EB-5 regulations do not address:

  • the fraud and national security measures that we all agree are necessary.
  • the rural and urban distressed visa set aside
  • the Opportunity Zone designations in urban areas.

As stated above, implementation of the new rule is set to occur 120 days from publication, or Nov. 21, 2019.

The regulations do make changes along the lines we reported in past blogs. See A Detailed Look at the Proposed EB-5 Regulations, OMB Completes Review of Obama-Era EB-5 Regulations, and Summary: Notice of Proposed Rule for the EB-5 Immigrant Investor Program.

Please consult your GT attorney with specific questions. We will be posting additional materials as available and will be posting a comprehensive summary of all the changes shortly.

Posted in China, EB-3, EB-5, Visa, Visa Bulletin

The Department of State (DOS) August 2019 Visa Bulleting shows significant retrogression in employment-based (EB) categories.

In the EB-1 category, final action dates retrogress to July 1, 2016, for all countries of chargeability except for India. The cutoff date for India’s EB-1 category remains at Jan. 1, 2015. The EB-2 category retrogresses to July 1, 2016 for all countries except China, advancing to Jan. 1, 2017, and India, advancing to May 2, 2009.

EB-3 categories for all other countries, El Salvador, Guatemala, Honduras, Mexico, the Philippines, and Vietnam also retrogress to July 1, 2016. India retrogresses to Jan. 1, 2006, while China advances to July 1, 2016. Similarly, for the EB-3: Other Workers category, most countries retrogress to July 1, 2016; India retrogresses to Jan. 1, 2006, and China’s remains the same at Nov. 22, 2007.

The EB-4 category cutoff dates remain the same at July 1, 2016 for El Salvador, Guatemala, Honduras, and Mexico, with the rest of the countries remaining current.

In the EB-5 category, most countries remain current. India and Vietnam’s cutoff dates retrogress to Oct. 15, 2014. China advances to the same cutoff date of Oct. 15, 2014.

The Visa Bulletin indicates that the implementation of the above-mentioned dates is expected to be temporary and that every effort will be made to return the Final Action dates to the same as those in the July Visa Bulletin in October 2019, the first month of fiscal year 2020.

Referring to the Final Action Dates, following are updates for the August 2019 Visa Bulletin:

Final Action Dates for Employment-Based Preference Cases

Dates for Filing of Employment-Based Visa Applications

For more visa bulletins, click here.

Posted in EB-5, Immigrant Visa

Today, the U.S. House of Representatives approved H.R. 1044, the Fairness for High-Skilled Immigrants Act of 2019, that eliminates per-country quotas for all employment-based immigrant visa petitions by a wide, bipartisan vote of 365-65.

The bill includes language helpful to the EB-5 program relating to a transition period for implementation, as explained –

Fairness for High-Skilled Immigrants Act of 2019

This bill increases the per-country cap on family-based immigrant visas from 7% of the total number of such visas available that year to 15%, and eliminates the 7% cap for employment-based immigrant visas. It also removes an offset that reduced the number of visas for individuals from China.

The bill also establishes transition rules for employment-based visas from FY2020-FY2022, by reserving a percentage of EB-2 (workers with advanced degrees or exceptional ability), EB-3 (skilled and other workers), and EB-5 (investors) visas for individuals not from the two countries with the largest number of recipients of such visas. Of the unreserved visas, not more than 85% shall be allotted to immigrants from any single country.

A companion bill, S. 386 (Sen. Lee, R-UT) was being discussed for Senate floor consideration last month.  The bill drew H-1B compliance provisions that slowed momentum and interested Senators continue negotiations.

Please contact your GT attorney for specific questions.  We will update this matter as information becomes available.

For more on Employment Visas, click here. 

Posted in Department of Homeland Security, EB-5, EB-5 Business Plan, EB-5 Immigrant Investor Program, EB-5 Investment, EB-5 Job Creation, EB-5 Legislation, EB-5 Program, Immigration Law, OMB, President Trump's Administration

Today, OMB posted that they have concluded their review of the Obama-era EB-5 regulations. On Jan. 13, 2017, the Department of Homeland Security published a notice of proposed rulemaking to significantly raise minimum investment levels and other programmatic changes to the EB-5 program (see related GT EB-5 Insights post here). It is unclear what specific actions OMB took today in regards to the pending regulations. We will update this blog as information becomes available.

Department of Homeland Security


RIN: 1615-AC07

STATUS: Concluded

TITLE: EB-5 Immigrant Investor Program Modernization

STAGE: Final Rule


RECEIVED DATE: 02/22/2019


COMPLETED: 06/27/2019

COMPLETED ACTION: Consistent with Change