Here are the questions we most frequently hear from investors:
Here are the questions we most frequently hear from investors:
U.S. Citizenship and Immigration Services (“USCIS”), on July 24, 2019, published the “EB-5 Immigrant Investor Program Modernization.” The new regulation rules will take effect for all I-526 investors and I-924 petitioners as of November 21, 2019.
The most significant change to the EB-5 Program will be the raising of the minimum investment requirement from $500,000 to $900,000 (for Targeted Employment Area investments, aka, TEA’s) and the increase of $1 million to $1.8 million for non-TEA investments.
The majority of the EB-5 investments in the market today would not qualify for the $900,000 investment amount since they would not qualify under the new TEA rules. Therefore, many petitioners who would under today’s rules invest in a $500,000 TEA project would have to invest $1.8 million in the same project, with non-TEA designation, as of November 21, 2019. (See the TEA section below for more on this.)
The EB-5 program requires that each EB-5 Investor create ten (10) jobs. Job cushion refers to the percentage of jobs exceeding the requirement. Having a Job cushion is important so that the job creation estimates are above the minimum required by all investors in a project.
So, what is a sufficient job cushion? Is there a magic number that is acceptable and anything lower than that is rejected? Generally speaking, a higher job cushion provides some assurance that job creation estimates will be met — but EB5 investors need to look deeper than just the job cushion numbers.
Job Cushions from 155 EB-5 offerings
Based on our review of 155 EB-5 offerings, job cushion has ranged from 0% to 900%. Seventy five percent (75%) of the projects have a job cushion of 25% or more and thirty percent (30%) of the projects have a job cushion of 100% or more. The median job cushion is 51%.
CMB recently published a blog titled EB-5 Due Diligence - Third Party Websites: Considering one of the many independent EB-5 due diligence services? in which they dismiss the notion that investors are served by retaining a due diligence firm before selecting an EB-5 investment.
