EB-5 Regional Center Program Returns as the Program Increases to $800K
After months of debate and uncertainty, the U.S. Congress has passed the EB-5 Reform and Integrity Act of 2022, thereby reopening the EB-5 Regional Center Program and increasing the program’s minimum investment requirement to $800K, among other important changes.
In addition to bringing relief to the thousands of EB-5 Regional Center applicants whose petitions were at a standstill since the program lapsed last June, the new bill brings important changes to the EB-5 program as a whole. Most notably, the minimum investment requirement is increased from USD $500K to $800K for investments in Targeted Employment Areas (TEAs) and rural areas – which have also been redefined by the new legislation. This increase also puts an end to an awkward chapter in the EB-5’s history, which started when a previous attempt at an investment increase – from 500K to 900K in November 2019 – was reversed by the Federal Court in June of last year, citing important procedural defaults in the original Final Rule issued by the Department of Homeland Security.
Investments in Non-Targeted Employment Areas for both regional center and direct EB-5 investments will now be set at a minimum of USD $1.05M from the current $1M.
This reform further brings welcome stability to the program by reauthorizing the EB-5 Regional Center program through September 30, 2027 and by including a mechanism that is set to renew the program in 5-year periods thereafter. New protections are also provided for investors who have a pending file by explicitly allowing USCIS to continue processing previously submitted petitions in the event of a future lapse.
The changes will not affect previous petitions, since the bill also includes protections for investors that have already filed their I-526 petitions (“grandfathering”).
In addition to stricter compliance and disclosure obligations for Regional Centers and developers, new EB-5 investors will also benefit from additional measures, namely the following:
- With I-526 petitions, concurrent adjustment of status filings of I-485 filings will be allowed, meaning that applicants who are currently in the US on an F-1 study permit, OPT, H-1B work permit, L-1A work permit and other non-immigrant statuses will be able to apply for and get a Employment Authorization Document (EAD) and a Travel Document (TD) within 90-120 days of applying for EB-5 and become free to work anywhere without employer sponsorship.
- In some instances, additional protection for dependent children who have reached the age of majority.
This anticipated development occurred merely days before a potential government shutdown, as part of the overall U.S. Omnibus Spending Bill which passed the House of Representatives on March 9 and the Senate on March 10. Because the US budget needed to pass before March 11 to prevent a government shutdown, Congress further approved a temporary stopgap bill to maintain funding through to March 15. That said, the bill is currently waiting to be signed into law by President Biden, which is expected to happen as soon as March 11.
Exeo continues to monitor the situation. Please contact us for more information.
EB-5 Program Reform: What is Happening on February 18?
The EB-5 investor program has been making headlines for more than half a year now.
Last June, the entry price for this popular US residency-by-investment program was reduced by nearly half (USD $900k to $500k) because of a Federal Court decision. This opened up possibilities for applicants who were open to investing in its lesser-known “direct job creation” stream at the same time as its more popular Regional Center stream lapsed.
Now, EB-5 is back in the news. Efforts are underway to reinstate the Regional Center program as part of the critical “omnibus” spending bill the U.S. Congress must pass in order to keep the federal government operating through the remainder of the year. The omnibus is anticipated to pass through Congress sometime in late February or early March. In the interim, we should be prepared for the possibility of a short-term stop-gap funding bill on February 18. This bill will provide Congress with a few extra weeks to draft the larger omnibus legislative package.
What will be going up to a vote on the omnibus?
In June 2021, the EB-5 Regional Center Pilot Program lapsed as a result of a failed attempt at reforming this sought-after yet sometimes controversial immigration vehicle for wealthy investors seeking a US green card. This ultra-popular subcategory of the EB-5 program allows foreign nationals to invest in projects that fall under the umbrella of federal-licensed Regional Centers. These funds exist to promote economic development in certain target locations. Contrary to its “EB-5 direct” alternative, Regional Center petitioners can claim credit for the indirect and induced jobs that are created as a result of their investment.
The non-renewal of this program made waves across the immigrant investor landscape, and we will soon find out whether it will be reinstated.
As part of that debate, Congress will also be voting on whether to increase the minimum investment amount for EB-5 applicants. As mentioned above, a 2019 increase from USD $500K to $900K was reversed last June by the Federal court. Now, Congress is attempting to legislatively raise the investment amount from $500K to anywhere between $700K and $1 million (or more).
What do we think will happen?
Within the last 24 hours, we heard from Washington, DC insiders that the EB-5 Regional Center program is being negotiated for a variety of updates and changes, including an investment amount increase. U.S. House of Representatives Judiciary Committee Chairman Jerry Nadler (D-NY) has taken the lead with his proposed legislation for the program. Senate Majority Leader Chuck Schumer (D-NY) supports the Nadler proposal and is maneuvering to include it (or some version of it) in the upcoming omnibus bill.
It’s understood in Washington, however, that Senators Leahy (D-VT) and Grassley (R-IA) have their own strong views on legislative reforms for the Regional Center program and will push hard for their own changes. Suffice to say, negotiations on this legislation are now intensifying.
While the Nadler draft legislation promoted by the industry sets a minimum investment of $700K, we have been advised that once negotiations with Senators Leahy and Grassley kick off in the coming days, negotiations around that working number will likely increase.
Several meetings are taking place in Washington, DC on a rolling basis, and we can expect many more negotiating positions to be revealed in the next few days. Nothing is set in stone so far.
As this is an evolving situation, we will be updating this post as information rolls in. Be sure to check back often.In the meantime, you can get to know the basics about the EB-5 program, learn how to apply for an EB-5 visa, or better understand the program’s job creation requirement.