Thanks to Pres. Trump, EB-5 Program Will Begin Working for Rural America Again
Nov 21, 2019
Regulations promoting investment in rural & economically-challenged regions take effect today
WASHINGTON – Sen. Chuck Grassley (R-Iowa), a longtime advocate for reforms to the oft-abused EB-5 investor visa program, made the following statement regarding new regulations that take effect today.
“For years, the EB-5 program has been riddled with fraud, abuse and national security concerns. It’s long been exploited to syphon investment dollars away from rural America and economically distressed urban areas to instead support glitzy luxury projects in the most well-to-do neighborhoods of our largest cities. Even the Obama administration recognized the rampant corruption in EB-5. President Trump has taken bold steps to address these issues. Today, despite the best efforts of big money interests, the Trump administration’s new regulations take effect, restoring incentives for investments in rural America and truly distressed areas,” Grassley said.
The EB-5 program, established in 1990, provides visas to foreign nationals who invest $1 million in new U.S. private enterprises that create additional jobs. The investment threshold is reduced to $500,000 for projects in rural or economically-distressed areas known as Targeted Employment Areas (TEAs). The program later allowed for the establishment of EB-5 regional centers, which pooled multiple investments into a single project. However, the investment levels have not been adjusted in 30 years or kept pace with inflation. Big-city developers are also selectively piecing together census tract data to create TEAs in some of America’s wealthiest areas, allowing them to use the lower-level investments that are intended to be reserved for regions that are actually in need of investments and jobs.
The new regulations raise the standard minimum investment threshold for EB-5 projects to $1.8 million and raise the minimum investment threshold for projects in TEAs to $900,000. Minimum investment amounts will be adjusted for inflation every five years. Finally, in order to crack down on state and local gerrymandering of TEAs, the Department of Homeland Security will make TEA designations directly based on revised requirements in the new rule.
More on Grassley’s work to reform EB-5 is available HERE.