After months of silence, a working group composed of leaders from both houses has finally proposed the latest EB-5 draft. In addition to the consensus on price increases, this new EB-5 proposal also highlights four potential changes. In the past few days, Worldway's official website has continuously published articles analyzing the four major changes that this new EB-5 proposal may trigger, summarizing these potential changes as follows:
1. Effective Date and Scope of the Grandfathering Rule
The new proposal stipulates that projects that submitted I-526 sample applications before June 1, 2015, or those that submitted I-526 sample applications after June 1 but were approved before the new law takes effect, or projects with approved investor I-526 applications, are protected by the grandfathering rule. The scope of protection includes investment amounts, TEA designations, and employment calculation methods. This means that any investments made in projects not protected by the grandfathering rule before December 11 must comply with the new law enacted after December 11 regarding investment amounts, TEA designations, and employment calculation methods.
2. Redefinition of TEA
TEAs defined by high unemployment rates can only be calculated using individual census tracts; if adjacent tracts are considered, each tract must have an unemployment rate higher than 1.5 times the national average unemployment rate; non-adjacent tracts are not accepted. This means that some metropolitan areas will no longer qualify for TEA status, resulting in investors who have made investments that are not grandfathered either facing legal lawsuits for refunds or needing to supplement their investments to $1.2 million and explain the source of the supplemental funds according to the new standards.
3. Adjustment of Employment Calculation Methods
The new proposal stipulates that 10% of job opportunities must come from direct, full-time W-2 employees of the Job Creating Entity (JCE). This means that direct construction positions, which are currently classified as non-direct employment under the EB-5 statute, will not count towards this 10% employment requirement. Many construction projects will be unable to meet this new employment calculation standard.
4. Mandatory Sample Pre-Approval Process
The new proposal stipulates that all EB-5 projects, regardless of whether they are grandfathered, must obtain sample pre-approval from the U.S. Citizenship and Immigration Services before submitting investors' I-526 applications. This means that projects that have not received sample pre-approval must first obtain it before processing investors' I-526 applications after the new law takes effect on December 11. This will result in investors who have invested in projects that have not received pre-approval either facing case withdrawals or having their applications frozen, and they will have to wait for the projects to obtain sample pre-approval according to the new standards before resubmitting applications or supplementing documents according to the new standards to restart their applications.
Of course, this proposal is still under discussion, and the final conclusions may still change. However, wise EB-5 investors should prepare in advance and make the most thorough preparations. It is better to be safe than sorry. Currently, investing quickly in high-quality projects protected by the grandfathering rule, where employment and TEA are not affected by the changes, is undoubtedly the best choice to respond to the changes on December 11.
As the deadline for U.S. investment immigration on December 11 approaches, Worldway has extended the group purchase storm to December 11 and is excited to launch the EB-5 projects - DLJ Four Seasons Hotel Resort Project and Columbus 90 Apartment Project, making every effort to help investors catch the last train before the changes on December 11!
It is especially worth noting that the above three EB-5 projects, exclusively represented by Worldway, are the best choices to address the changes on December 11. Among these three projects, the DLJ Four Seasons Hotel Project received sample pre-approval in March this year, and the investor I-526 applications have also been approved; the Columbus 90 Project received sample pre-approval in May this year, so after December 11, the I-526 continuous approvals for investors in these two projects will not be affected.
More importantly, these three projects are all high-quality projects that have successfully been grandfathered, capable of receiving the strictest grandfathering protection in history, and are not affected by TEA changes and employment calculations, allowing them to continue to enjoy the favorable policy of the last $500,000.
In addition, these three projects also have many advantages such as ample employment, strong developers, good exit mechanisms, and low investment and repayment risks. Of course, each project also has its own unique advantages. It is precisely because they possess many concentrated advantages that they have become the best choice for successfully catching the last train of U.S. immigration before December 11 in the EB-5 market. For more information, please call: 400-138-2929