In a recent tweet, the American Immigrant Investor Alliance (AIIA) declared, “It is our great pleasure to announce that the EB-5 Regional Center program will be reauthorized with the Omnibus on March 15, 2022. The text of the Consolidated Appropriations Act, 2022 was just released and Division BB, includes the EB-5 Reform and Integrity Act of 2022. The omnibus also includes our FIFPA language (Section 108 of Division BB) which will ensure that investors will not have to suffer through this ordeal ever again.” Ishaan Khanna, co-founder of the American Immigrant Investor Alliance, which represents the interests of EB-5 investors, had predicted a “bank run” if EB-5 investors had their green cards denied because of the program’s expiration. Instead, if the bill is passed, investor immigrants will be able to return to helping build the American economy through investing in the revised program.
Major Implications for Immigrant Investors
Robert Divine, of the law firm of Baker Donelson, a senior voice in the American Immigration Lawyers Association and respected authority on investor immigration matters, first signalled the likely introduction of the bill as part of the Omnibus legislation to be passed, indicating that the bill, “has major implications for existing and future investors, regional centers, developers, and promoters.”
In a later summary of the bill, authors Nick Hinrichsen, Kristal Ozun and Stehen Yale-Loehr, who practice immigration law at Miller Mayer in Ithaca, NY, laid out the contours of the bill as follows:
- Pending investor immigrant petitions will not be subject to the new rules or higher investment amounts.
- Adjudication of these petitions and adjustment of status applications, and consular processing will resume upon enactment of the bill.
- The required investment amount will go up to $800,000 for targeted employment areas (TEAs) or “infrastructure projects”. Otherwise, the investment amount will be $1,050,000.
- Grandfathering provisions direct USCIS to continue to process EB-5 petitions if there is a future EB-5 program lapse, as long as the EB-5 petition is filed by September 30, 2026.
- The bill sets aside 20% of total EB-5 visa numbers for investments in rural areas, 10% for investments in high unemployment areas, and 2% for investments in infrastructure projects.
- The bill provides protection for dependent children aging-out in certain circumstances.
- Concurrent adjustment of status filings are permitted with investor immigrant petitions.
- Gifts are still permitted, and not limited to familial relations.
- Source of funds requirements apply to capital investments, administrative fees, and any fees “associated” with the investment.
- There is a mechanism for switching projects if a regional center or new commercial enterprise (NCE) is terminated.
- Caps are placed on indirect and construction jobs.
- An exemplar application must be filed before individual investor immigrant petitions may be submitted.
- TEA letters are valid for 2 years.
- Regional Centers (RC) must be audited by USCIS at least every 5 years.
- (Possibly) redeployment permitted outside RC geography (subject to regulations).
- Prohibitions on RC involvement for persons who have committed certain crimes or have been subject to orders or sanctions by certain state or federal enforcement agencies.
- Disclosure required of third-party agent fees and involvement in a project.
- Direct and third-party promoters must register with the USCIS.
- New rules on RC/NCE “funds administration.”
Background on the Program
Under the EB-5 program, investors (and their spouses and unmarried children under 21) are eligible to apply for a Green Card (permanent residence) if they:
- Make the necessary investment in a commercial enterprise in the United States; and
- Plan to create or preserve 10 permanent full-time jobs for qualified U.S. workers.
Congress created the EB-5 Program in 1990 to stimulate the U.S. economy through job creation and capital investment by foreign investors. In 1992, Congress created the Immigrant Investor Program, also known as the Regional Center Program, which sets aside EB-5 visas for participants who invest in commercial enterprises associated with regional centers approved by USCIS based on proposals for promoting economic growth. That program was halted at the end of June 2021 and investors in it have been awaiting its revival ever since. The new legislation will not only revive the Regional Center program, but it will introduce other integrity measures to be applied to all parts of the new EB-5 program. This is good news, particularly to those investors whose funds were committed to an investment but who could not get their green cards because the Regional Center program was shut down and not operating.