The Department of Homeland Security (DHS) and U.S. Citizenship and Immigration Services (USCIS) recently proposed revisions to current EB-5 foreign investor visa requirements. These changes are slated for the fourth quarter of this year. Their goal is to modernize and reform the system supporting the EB-5 visa, but what effect will this have on contractors and construction businesses that deal with foreign investors? And what should contractors do to prepare themselves for this change? In this brief article, a construction lawyer in Franklin, TN, will answer both of these questions while outlining the proposed changes to the EB-5 visa.
The EB-5 Program
According to USCIS, the Immigrant Investor Program, or EB-5, “was created by Congress in 1990 to stimulate the U.S.economy through job creation and capital investment by immigrant investors by creating a new commercial enterprise or investing in a troubled business.” 10,000 EB-5 visas are made available every year, but 3,000 of these are reserved for investors in Regional Centers that support economic growth. There are two distinct programs for immigrant investors whose intent is to become a lawful permanent resident of the United States — the Basic Program and the Regional Center Pilot Program. Any new commercial enterprise established through this system is required to create or preserve at least ten full-time jobs within the first two years.
The Proposed Changes
There are five primary changes slated for the fourth quarter of this year. These include:
- Priority Date Retention: gives investors the ability to hold their place in line if they have to alter their qualifying investment for reasons they can’t control.
- Increases to Minimum Investment Amounts: increases standard investments from $1 million to $1.8 million. Additionally, investments in targeted employment areas (TEAs) will increase from $500,000 to $1 million.
- TEA Authority: DHS will now be given authority over TEA designations in lieu of states.
- Investor’s Derivative Family Members: clarifies rules that are currently hard to interpret.
- Miscellaneous: various changes and clarifications.
How Does This Affect Contractors?
Construction Dive notes that the pure volume of foreign investors interested in obtaining an EB-5 visa ensures that the construction industry will be secure despite the rising cost of doing business in the United States. Jill Jones of NES Financial maintains a positive outlook. She claims, “At the end of the day, it’s a terrific program that allows money to come into underserved areas in the U.S. They’re generating jobs and building business where it didn’t exist before.”
Therefore, contractors need not worry about the impending changes to this program; however, that doesn’t mean you should turn a blind eye to the issue as a whole. Foreign investments help fuel construction, but if costs continue to rise, they could hit a tipping point sooner than later.
Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.