With another legislative EB-5 sunset date (December 8) rapidly approaching, there is much speculation about what the future of the immigrant investor program may hold. However, most experts agree that an increase in the minimum EB-5 investment amounts — which have not changed since the program’s inception in 1990 — is to be expected.
The current minimum investment amounts stand at $500k (for a project in a targeted employment area, or TEA) and $1 million (otherwise). How will new investment minimums be chosen? Likely by some inflationary calculation, using the original (i.e., current) numbers as a starting point.
However, as economist Scott Barnhart demonstrates in his article “USCIS EB-5 Immigrant Investor Program Modernization,” the choice of which inflationary inputs legislators use could make a substantial difference in what EB-5 investors are paying a year from now.
In his article, Dr. Barnhart analyzes this year’s Proposed Rule issued by the Department of Homeland Security (DHS), in which they suggest that the investment minimums be raised to $1 million and $1.85 million for TEAs and non-TEAs, respectively.
In a two-pronged argument, Dr. Barnhart takes DHS to task on their calculations, reasoning that neither the inflationary index (the Consumer Price Index for Urban Consumers) nor the benchmark year (1990) that they use is appropriate. He goes on to suggest a more realistic — and investor friendly — method of calculating the increased investment minimums.
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