11/19/2015 Update regarding to EB-5 News and I-526 Petition

With the Regional Center program of EB-5 set to expire after December 11th, competing interests in Congress have been negotiating a comprehensive reform bill that would extend the program. If no compromise is reached by Congress soon, the possibility of a temporary extension of EB-5 in its current form grows more likely.


After the bi-partisan bill S. 1501 was introduced in June 2015, a lack of consistency in effective dates for minimum investments and TEA designations along with many other problematic issues with the bill led most of the EB-5 industry to abandon its support, and the bill not advance beyond committee or gain momentum for its passage.


Several bills introduced in the House also did not gather any legislative momentum and were left to languish, along with an additional bill in the Senate introduced after S. 1501. Now, as the Wall Street Journal reports (http://blogs.wsj.com/washwire/2015/11/11/real-estate-and-green-cards-eb-5-debate-heats-up-in-washington/), a draft of a new bill has been released to a few real estate developers, however the draft has not been made public. The draft reportedly has effective dates of June 1, 2015 for both minimum investments and TEA designations.


The impact of these effective dates would be great on both EB-5 Investors and the projects they invest in. The potential changes if implemented would mean that any investor who filed an I-526 petition after June 1st would not be able to use the current minimum investment amount of $500,000 for investments within a TEA (or $1,000,000 if not in a TEA) and would instead be subject to the new minimum investment amounts of $800,000 in a TEA or $1,200,000 for investments outside a TEA. However, reportedly even the TEA designations would be subject to the June 1, 2015 effective dates, which could result in even more problematic outcomes for both EB-5 investors and developers.


Since the bill has not been made public, there is still time for Congress to negotiate effective dates to a more reasonable time frame as found in the original S.1501. It is also likely that there would be significant amendments made to the bill by both the Senate and House, so it is important to keep in perspective that this is only draft legislation and there is a long way to go before making it law.


Our firm is keeping track of legislative developments and how they may affect our clients with already filed I-526 petitions. We will provide an update as soon as any developments or EB-5 news out of Congress emerges.

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