Federal District Judge Rules to Reinstate $500,000 Minimum Investment For the EB-5 Visa Program
In this blog post, we share with you a new landmark court decision affecting the EB-5 Immigrant Investor Visa Program, known as matter of Behring Regional Center LLC V. Chad Wolf et al.
In this case, decided on June 22, 2021, the U.S. District Court of the Northern District of California vacated the controversial 2019 ‘EB-5 Modernization Rule’ that sought to ‘modernize’ the EB-5 visa program, by increasing the minimum investment amount from $500,000 to $900,000. In her ruling, Judge Corley concluded that the 2019 Modernization Rule should be vacated because the former acting DHS Security, Kevin McAleenan was not properly appointed in his position under the Federal Vacancies Reform Act when he implemented the Regulations. Therefore, the officials had no legal authority to make and to announce the changes.
The judge’s new ruling means that the district court’s decision will restore the original rules for the EB-5 program, initially established by the Immigration Act of 1990 as a legal pathway to provide qualified foreign/immigrant investors the opportunity to obtain permanent residency in the U.S. (commonly known as the “green card”). The now-defunct EB-5 Modernization Regulations of 2019 had increased the minimum investment amount from $500,000 to $900,000, but with this new ruling the minimum investment amount has again reverted to $500,000.
In addition to the $400,000 increase of the original amount, the Modernization Rule of 2019 also made debatable changes to the program’s Targeted Employment Area (TEA) designation process, by removing the states’ authority to determine TEA eligibility without a viable replacement, resulting in extremely long processing times. The problematic changes caused by the EB-5 Modernization Regulation of 2019 posed an obstacle for investors wishing to take part in the EB-5 program, which ultimately caused new EB-5 petitions to decrease by more than 99 percent.
It is also worth noting that since its inception, EB-5 immigrant investors have invested more than $41 billion into the U.S. and created over 820,000 full-time jobs at zero cost to U.S. taxpayers. With the original rules being restored, EB-5 investors may once again invest with the minimum amount of $500,000 in all TEA-qualified locations and continue creating new jobs. This new decision could not have come at a better time as the United States prepares to jumpstart its economy amid the pandemic.
There remains the possibility that the Department of Homeland Security may appeal this decision. The current EB-5 Program is also due to expire on June 30, 2021. Lawmakers and industry advocates are working hard to extend the program as there are clear benefits on the U.S. economy. It is likely that we will continue to see positive changes in the coming months and years to the EB-5 program.
Currently there are many EB-5 Regional Centers that are accepting new investors at the lowered rate of $500,000.
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- Behring Regional Center LLC V. Chad Wolf et al. Decision
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