The original program was created by Congress in 1990, with the goal of stimulating the U.S. economy through job creation and capital investment by immigrant investors by creating a new commercial enterprise of investing in a troubled business. There are up to 10,000 EB-5 immigrant visas available to be issued annually.
The visa grants the applicant (and immediate family) conditional permanent residence in the U.S. for two years. Within 90 days of the two year period expiring, the applicant must submit evidence that the investment created at least 10 full time positions for qualifying employees.
To qualify for an EB-5 visa, foreign investors have to make a capital investment in a for-profit US entity. Under the original program, if the project was in a targeted employment area (TEA), the minimum requirement was $500,000; otherwise it was $1M. Under the new rules, the minimum required investment has been increased to $900,000 in a TEA, or $1.8M in a non-TEA. TEAs are designated areas that are rural or experiencing high unemployment rates.
In addition to the increase in minimum investment amounts, the new rules made changes as to how an area is determined to be a TEA. Specifically, TEA designations are no longer made at the state and local government level. Designation as a TEA are reviewed and determined directly by the Department of Homeland Security. The stated reasoning behind this change is to address the issue of gerrymandering of high-unemployment areas (essentially drawing district lines to include a small portion of a TEA to a project in a more affluent area to qualify for the lower investment amount), but the concern is this will result in more strict and limiting parameters for investment.
Lastly, there were two changes enacted with the modernization program. First, priority date is retained for investors who need to update a previously submitted proposal. Second, family members of visa recipients must now apply independently to remove conditions from their permanent residency status.
Opinions on the changes have been varied. While some believe it will restore the program to its original intention by bringing economic growth to areas experiencing extreme unemployment, others worry the changes will result in foreign investors seeking opportunities outside of the U.S. where the requirements are less costly and more lenient.