This number is based upon the application of the cumulative CPI (Consumer Price Index) increases from 1990 (when the initial amounts were sent) until now – a total increase of 170%.
Here are five important observations regarding the proposal:
1. Huge Increases in Minimum Investment Amount. DHS proposes to increase the standard minimum investment amount from $1 million to $1.8 million. This is an 80% increase. For those investors seeking to invest in a targeted employment area (TEA), DHS proposes to increase the minimum investment amount from $500,000 to $1.35 million, a 170% increase! In addition, DHS is proposing to make regular consumer price index-based adjustments every 5 years, beginning 5 years from the effective date of the regulations.
2. TEA Designations. There could be major changes to TEA designations. DHS proposes to allow any city or town with a population of 20,000 and an average unemployment rate of at least 150 percent of the national average rate, to qualify as a TEA. DHS also proposes to eliminate the ability of a state to designate certain geographic and political subdivisions as high-unemployment areas; instead, DHS would make such designations directly, on standards that are yet to be determined.
3. Priority Date Retention. In a positive move, DHS proposes to authorize certain EB-5 petitioners to retain their priority date, or place in the waiting line if they have an approved EB-5 immigrant petition so it can be used in a subsequent EB-5 immigrant petition. This will only occur when the new petitions must be filed due to circumstances beyond the investor’s control such as termination of Regional Center or if there is a material change in the business plan. This is very important for investors from Mainland China who are subject to a waiting line.
4. Removal of Conditions. DHS is proposing that derivative family members that were not included in a Form I-829 petition to remove conditions filed by the principal investor must file their own Form I-829. DHS is also proposing greater flexibility to require interviews for Form I-829 approval in a location where the investor is residing.
5. Management of NCE. DHS is proposing to eliminate references to “management” and the term “as opposed to maintaining a purely passive role in regard to the investment” in the regulation at 8 C.F.R. § 204.6(j)(5). Presently, it is required than an EB-5 investor be engaged in the management of the new commercial enterprise, either through the exercise of day-to-day managerial control or through policy formulation, as opposed to maintaining a purely passive role in regard to the investment. This point will be further clarified in the comments to follow.
This has taken lots of people by surprise and it certainly will result in lots of opposition from the pro-EB5 community. It is certainly possible that as a result of comments, political pressure, legislative action by Congress, or a combination thereof, that this proposed rule will not be implemented. We will be working with allies to oppose such a dramatic increase in the investment amount.