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June 8 2016

EB-5 Investment Amount Increase Moves Closer; Legislative Report

EB-5 Investment Amount Increase Moves Closer

The U.S. Government’s Office of Management and Budget has again published for the third time on its website a notice of forthcoming rules and regulations. Here is what was posted:

DHS is proposing to update its EB-5 regulations to improve clarity by having two distinct regulatory sections - one for individual investors and one for combined investors in a designated regional center investment.  DHS is also proposing to amend its regulations…. Unique EB-5 program issues which will be addressed in the updated regulation are:  the designation of Targeted Employment Areas; indirect job creation; the required investment amount; material changes effect on conditional residency; the regional center designation process; and monitoring for regional center compliance. (Underlining added.)

Soon we will see the proposed regulations. The public will be given time to comment (usually 60 days) on the proposed regulation before the new rules become final and USCIS raises the investment amount.

I am suggesting to investors that they start to document the source of funds now, while completing due diligence on the investment project. This way, the EB-5 case can be filed quickly, once the investment is made.

Legislative Report 

Congress is running out of legislative days to extend the Regional Center EB-5 statute set to expire on September 30, 2016. The Democratic and Republican conventions will be in July and Congress is in recess in August. That leaves a few weeks in June and September to agree on the provisions of a new law. As there is so little time, it appears a short clean extension is likely to mid-December. But the groundwork for completing the bill’s language will be laid between now and then. A few securities lawyers met with key Senate staff last week. The Jay Peak RC EB-5 project being seized by the SEC has complicated matters and this will add pressure for a new bill this year rather than another one year extension.