EB-5 Investor Visa Update
The EB-5 Investor Green Card program received a lot of attention during June 2021. First, on June 22, there was a federal court injunction, which some are advertising as having reduced the minimum investment amount to $500,000 from $900,000. Second, the law which authorizes the EB-5 Regional Center program expired on June 30, 2021. We will explain those in this article, but, what does this all mean? More confusion and uncertainties for a program that had the potential for tremendous economic impact and job creation. EB-5 is not for the faint hearted, and certainly not for those who cannot easily afford to have the funds tied up for a long time and a potential loss of the amount invested. Here are the details.
EB-5: Amount of Investment
The program was created in 1990 and the law specified that the standard amount required was $1 million, but if the investment was in a targeted employment area, the required amount was reduced to $500,000. The 1990 law contained a process by which the Secretary of Homeland Security could increase the standard amount. On July 21, 2019, then-Acting Homeland Security Secretary McAleenan signed a Final Rule, which, among other things, increased the standard investment threshold to $1.8 million and the reduced investment threshold to $900,000 effective November 21, 2019. On June 22, 2021, in Behring Regional Center, LLC v. Wolf, et al., the U.S. District Court for the Northern District of California held that there was a procedural defect in the July 21, 2019 regulation and therefore the increase was not legal. Since the July 21, 2019 regulation was no longer effective, the required amount would revert to $1 million and $500,000. But the story does not end here. There are many ways by which U.S. Citizenship and Immigration Services (USCIS) can potentially overcome the court decision and revert to the higher amount. Some investors are rushing to file using the lower amount before any further action is taken by USCIS.
EB-5 Regional Center Program Law Expiration Date June 30, 2021
It is important to remember that there are two EB-5 programs. The 1990 law created what is commonly called the “EB-5 Direct Jobs Program” or “Stand-Alone Program.” That program does not expire and continues.
However, only the second program, the one commonly known as the “Regional Center Program,” is the one which terminates and needs reauthorization. The Regional Center Program was introduced as a “pilot program” for five years in 1992 and allowed for the jobs requirement to be satisfied by counting not only the full time jobs directly created by the enterprise, but also the indirect jobs created by the investment. Most EB-5 applications used the Regional Center Program because of the ability to count indirect job creation and pool investments from multiple applicants.
After the initial five-year term in 1992, Congress has extended the Regional Center Program more than 15 times in both long- and short-term increments for almost 29 years. Most recently, on Dec. 27, 2020, President Trump signed a law extending validity of the RC Program through June 30, 2021. The RC Program must be reauthorized to continue after that date.
Unless the RC Program is extended, we expect USCIS to follow it prior policy of rejecting any new applications and holding action on any pending Regional Center based EB-5 applications until Congress is able to pass appropriate legislation. Even for Regional Center based approved EB-5 Petitions, USCIS would not be able to approve the required pending Adjustment of Status applications or issue the immigrant visas for those Consular processing the EB-5 Regional Center based immigrant visa.
Quite apart from the June 2021 issues, the EB-5 program continues to be plagued by extreme delays by USCIS in processing the applications. Most potential applicants are advised to wait for the uncertainty to clear.
Dilip Patel of Buchanan Ingersoll & Rooney PC, a board-certified expert on immigration law, can be reached at (813) 222-1120 or email firstname.lastname@example.org