VISA usa : WHAT ARE THE CHANGES?

 VISA usa : WHAT ARE THE CHANGES?

EB-5 Visa: What are the changes?

The U.S. Citizenship and Immigration Services (USCIS) published a final rule on July 24th that will make several significant changes to the EB-5 visa. Aimed at immigrant investors, this is the first significant revision to the program's regulations since 1993. So, what are the changes for the EB-5 visa?

EB-5 Visa: What are the changes?

The EB-5 visa

Created in the 1990s, the EB-5 visa was designed to help American workers and stimulate the economy by encouraging foreign investors to invest in the United States. However, it wasn't until after the 2008 financial crisis that foreign investors began using it. In fact, investment under the EB-5 program increased from $300 million to $5.7 billion in a decade.

The largest EB-5 visa applicants are Chinese

The EB-5 visa has also been synonymous with Chinese investment. Between 2012 and 2018, more than 80% of the 10,000 EB-5 visas issued each year went to Chinese investors. They largely financed more than $1.2 billion in EB-5 funding for the Hudson Yards megaproject in Manhattan.

But Chinese investment has slowed in recent years as demand for visas has outstripped supply. As a result, the average wait time for Chinese investors to apply for a visa has climbed to 16 years. In 2018, the number of visas issued to Chinese nationals by the U.S. government fell by nearly 3,000 compared to the previous year. With Chinese demand declining, interest from EB-5 investors from Latin America is growing.

In fiscal year 2018, the State Department issued visas to 730 South American investors, representing just under 8% of the total EB-5 visas issued.

Why these changes for the EB-5 visa?

These investments were originally intended to help struggling areas (TEAs: Targeted Employment Areas) revive their economies. But investors' money was often spent on luxury projects rather than on the TEAs provided for by Congress. The rate of return was low (1%), but the real goal of these investors was primarily to obtain a green card.

The aim of the new rules is to encourage investors to be more involved. They will receive a higher rate of return and have more recourse if the project fails.

Read also: Visa duration reduced according to MP Roland Lescure

EB-5 Visa: What are the changes?

Increase in minimum investment amounts

For the first time since 1990, and to account for inflation, the minimum investment has jumped from $500,000 to $900,000 for TEA projects. These projects are typically located in rural areas and areas with high unemployment. In non-needy areas, the standard investment threshold has increased from $1 million to $1.8 million. These amounts will be automatically adjusted every five years for inflation.

Reform of the designation of TEAs

This is to address the problem of gerrymandering in high unemployment areas. This is the manipulation of district boundaries to obtain more votes. Gerrymandering in these areas was typically accomplished by combining a series of census tracts to connect a thriving project site with a distressed community to achieve the qualifying average unemployment rate. Now, the Department of Homeland Security (DHS) will eliminate a state's ability to designate certain geographic and political subdivisions as high unemployment areas. From now on, DHS will make these designations directly based on the revised requirements of the regulation. These revisions will help ensure that TEA designations are made fairly and uniformly.