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EB-5 Question of the Week: Will the EB-5 investment amount increase?

Yes, it is likely that the capital contribution required for participation in the EB-5 program will eventually increase. Pursuant to the EB-5 Reform and Integrity Act (RIA) passed in March 2022, the capital contribution amount will automatically adjust based on the cumulative annual percentage change in the unadjusted consumer price index (CPI) for all urban consumers, i.e., inflation. That said, due to the grandfathering provision of the RIA, existing EB-5 investors are protected from future legislative changes to the program. Therefore, investors that apply now can benefit from the current lower threshold of $800,000 and are not required to invest more upon a price increase.

The EB-5 program allows foreign investors to obtain U.S. Green Cards with a minimum investment of $800,000 in a government pre-approved real estate project in the United States. Applicants can include their qualifying dependents in their EB-5 application, including spouse and children under the age of 21. Presently, the minimum required capital contribution in areas of high unemployment (i.e., Targeted Employment Areas) is $800,000 and $1,050,000 in all other areas. The investment amount is returned to the family after approximately five years from the initial date of the investment.

The automatic price adjustment mechanism of the RIA on the basis of inflation coupled with the high inflation rate in the U.S. as published by the U.S. Bureau of Labor Statistics indicates that the $800,000 minimum investment threshold will eventually increase when the price of the program is reviewed under the terms of the RIA. The average inflation rate for the United States in 2022 according to CPI data was at 8% and the actual rate of inflation was 6.5%. Following its February 2023 meeting, the U.S. Federal Reserve raised its benchmark interest rate by a quarter percentage point. The Fed’s goal is to bring down inflation through interest rate hikes. Given that inflation is still not down to the desired level, the Fed is likely to continue raising interest rates.

Families interested in obtaining their U.S. Green Cards by virtue of participating in the EB-5 program can still avail the benefits with the lower ticket price of $800,000 by acting now and filing their applications before a price increase. Thanks to the RIA’s grandfathering provision, new legislative changes such as a price increase do not retroactively apply to existing investors. Therefore, if an investor files their EB-5 petition with an $800,000 investment and the minimum capital contribution is thereafter increased to $900,000, the investor is not required to invest an additional $100,000.

With over ten years of experience in the EB-5 industry, we are ready to assist you with your U.S. golden visa application. If you are interested in finding out more about the EB-5 program and its various requirements, contact our team today for a free consultation.

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