On November 21st 2019, new rules came into effect for the EB-5 programme in the U.S. On November 26th 2019 Florida EB-5 Investments LLC challenged these new rules. Frustrations and discontent have been brewing over USCIS rules that are impacting the US investment migration professionals.
A Florida regional center has filed a lawsuit against the Department of Homeland Security.
Florida EB-5 Investments LLC is a staunch advocate of the benefits that the EB-5 programme brings to the US in terms of job-creation, development, and the foreign investment it attracts. It is a U.S. designated regional center that supports foreign investors who apply for EB-5.
Their lawsuit stipulates that the Department for Homeland Security ignored the intel and data on the detrimental impact that the new EB-5 rules (increased minimum investments) would have on the American economy, going against the Administrative Procedure Act (APA). Numerous research studies based on government data have highlighted the levels of FDI that the EB-5 programme has attracted (~US$ 30B +) and hundreds of thousands of jobs generated.
The regional center hopes to obtain a temporary injunction of the implementation of these new 21st November 2019 EB-5 rules. The headline EB-5 regulation changes that are now in place include:
- Increase in TEA/Rural area investments from US$ 500,000 to US$900,000*
- Increase in non-targeted EB-5 investments from US$ 1,000,000 to US$ 1,800,000*
- USCIS will permit investor’s second qualifying investment to be considered from the priority filing date of the first EB-5 application. This priority date retention helps safeguard the interests of foreign investors who have older dependent children, predominantly.
- USCIS only (not State/local governments) will determine what a TEA is.
* Minimum investment amounts will change every five years in line with inflation.
The EB-5 regional center argues that the latest changes to the rules for the EB-5 will have a harmful effect on their operations but more importantly on the ability of the US to fund economic development through foreign investment and generate more jobs for American workers.
Moreover, they disagree with the new rules’ definition of a targeted employment area (TEA) which they deem further violate the APA. Previously each state had the right to determine a TEA, but the new rules have applied a blanket, nationwide standard for a TEA which isn’t practical, due to the particularities of each State.
Laura Reiff, co-chair of the EB-5 Investment Coalition’s board who support this suit informed Bloomberg Law that “the Department of Homeland Security’s new EB-5 regulations fail to holistically modernize the program, while putting hundreds of thousands of American jobs at risk and stifling economic growth development in communities across the country.”
Case Reference: Florida EB5 Investments LLC. v. Wolf et al., 1:19-cv-03573, U.S. District Court for the District of Columbia.
Read more: Vietnamese Investors Make Up over 20% of EB5 Real Estate Investments
Extend the Grace Period
Discontent is brewing from other areas of the US investment migration industry, including the American Immigration Lawyers Association (AILA) who yesterday issued a letter to U.S. Citizenship and Immigration Services (USCIS) regarding the new Form I-924A.
Founded in 1946, AILA is a nonpartisan, not-for-profit organization with 39 chapters and more than 15,000 attorneys and law professors who practice and teach immigration law.
Just over two weeks ago, USCIS informed that it would only accept the new form I-924A from the 6th December 2019 onwards, creating massive upheaval in the industry. AILA raised their concerns about this tight deadline, the costs and impact this has on regional centers who would have been preparing their annual certification using the previous form and will now have lost 7 weeks of preparation time due to this change.
They have requested that USCIS extend the cut-off date to the 31st December 2019, and accept the previous I-924A form (23/12/2016 Edition) until such date. To read the letter submitted by AILA, please click here and/or contact Carolyn Lee, Chair of the AILA EB-5 Investor Committee.
