United States Citizenship and Immigration Services (USCIS) has released the February 2021 edition of its monthly Visa Bulletin to inform petitioners of the state of the visa backlogs in February 2021. As the world hurtles into strengthened COVID-19 travel bans and restrictions following the emergence of new, more contagious strains of the virus, USCIS provides no light at the end of the tunnel for those involved in EB-5 investments and hoping to earn U.S. permanent residency rights. Five months into FY2021, the U.S. immigration body has failed to take advantage of the thousands of extra EB-5 visas allocated for the fiscal year to reduce the lengthy EB-5 backlogs, risking countless EB-5 visas going unused by the end of FY2021.

With COVID-19 vaccines making their global debut, albeit at dramatically varying speeds depending on the country, there is hope for some sense of normalcy in 2021. However, from the current vantage point in late January 2021, the future of EB5 investment participants and the world at large is unpredictable, and EB-5 investors should prepare for the possibility of a second 2020. Adding to the EB-5 program’s challenges in FY2021 is the increased risk for EB-5 Regional Center Program termination on June 30, 2021, with industry leaders rallying stakeholders to work together toward EB-5 reform as the most effective weapon against a program sunset.

While the February 2021 Visa Bulletin is good news for Indian EB-5 investors—still no backlog since achieving “current” status in July 2020—the outlook is not so good for those in China and Vietnam pursuing EB-5 investments. The Vietnamese final action date has advanced two weeks from the January 2021 Visa Bulletin, landing at October 1, 2017. The Chinese final action date, meanwhile, remains at August 15, 2015, where it has stood since the August 2020 Visa Bulletin. The deluge of new EB-5 visas in FY2021 has thus far done nothing to improve the situation of EB5 investment participants, with wait times growing ever larger and Chinese investors entering their seventh month of final action date inaction.

Chinese EB-5 investors have to face not only a stalled final action date but also a disconcerting lack of movement in the date for filing, which has stood steady at December 15, 2015, for 11 months. Should the March 2021 Visa Bulletin not offer any improvements, Chinese EB-5 investment participants will have reached the unfortunate milestone of a year-long unchanged date for filing. Though a lot can happen in a month, the current global situation surrounding COVID-19 does not offer a lot of hope that the March 2021 Visa Bulletin will provide good news to Chinese EB-5 investors.

Reform has been a major theme in EB-5 Immigrant Investor Program world for years, with the unresolved problems in the program becoming more and more aggravated each year. In January 2021, EB-5 industry leaders, including Invest in the USA (IIUSA), have made official calls on Congress to finally implement EB-5 program reform as well as permanently reauthorize the ever-popular EB-5 Regional Center Program.

The EB-5 World Narrowly Missed an Opportunity for Reform

Throughout its history of 30+ years, the EB-5 program—especially through the EB-5 Regional Center Program—has pumped billions of dollars into the U.S. economy, particularly into in-need communities in targeted employment areas (TEAs), and created tens of thousands of new jobs for U.S. workers. Despite this impressive track record, critics fault the regional center program for insufficient integrity measures, accusing those who make EB-5 investments as abusing the guidelines. In response, IIUSA has released a statement stressing the necessity of EB-5 reforms and the legislation needed to enact them.

According to IIUSA, an integrity-based reform to the EB-5 Regional Center Program is “necessary to achieve any other significant legislative goal.” Until integrity measures within the program are tightened, EB5 investment stakeholders have no room to address the mountain of other problems the program faces. At the end of 2020, the long-awaited reform almost came, but ultimately, it was too little, too late.

The EB-5 Reform and Integrity Act was presented by Senators Chuck Grassley and Patrick Leahy, who for years have formed a bipartisan partnership for the betterment of the EB-5 program. The bill addressed only a fraction of the issues that EB5 investment stakeholders have been pushing for years, but nonetheless, it offered an opportunity for strong reform and long-awaited chances. Promising integrity reforms to the regional center program and long-term reauthorization, the bill could have transformed the EB-5 landscape—but since it wasn’t finalized in time to be passed in conjunction with 2020’s year-end federal spending bill, the EB5 investment community must continue the fight for reform and permanent reauthorization.

Reform Needed Desperately to Ensure the Future of the Regional Center Program

As of January 2021, the EB-5 Regional Center Program is set to expire on June 30, 2021, the decision coming after a bumpy few months at the end of 2020 characterized by constant, short-term reauthorization. The reauthorization came alongside a wider government spending bill that included various government programs, as has been the custom for years. This time, however, Congress opted to give the EB-5 Regional Center Program a sunset date of June 30, 2021, as opposed to the normal September 30 date allocated to the other programs in the bill, effectively divorcing the regional center program from the consolidated bill.

This situation represents a rich opportunity for the EB-5 investment world, but it simultaneously presents a major risk—having been separated from federal budget legislation, the regional center program now needs to achieve reauthorization based solely on its own merits. The program has until June 30, 2021, to prove its worth, and then, if no legislation is passed, the program will become a relic of the past. IIUSA’s statement acknowledges the very real risk of termination, calling on the EB-5 industry to support Grassley and Leahy’s reform bill as “perhaps the only path to reauthorization.”

Other industry leaders have released similar statements, some elaborating on the type of reforms they would like to see realized. While Grassley and Leahy’s bill revolves around integrity—which indeed has been the focus of critics—calls have also been made to remove dependents from the yearly allocation of EB-5 visas, which would significantly clear up the backlogs and sufficiently meet EB-5 investment demand.

Reform Is the Way Forward for the EB-5 Program

As a temporary government program, the EB-5 Regional Center Program has dealt with short-term reauthorizations since its debut in 1992, so EB-5 investment stakeholders are no strangers to program uncertainty. The difference this time is the independence of the EB-5 program, having been released from the consolidated federal spending bill, as it faces a looming expiration date.

The EB-5 industry should not panic but rather work together to prove before the June 30, 2021, deadline that the program is beneficial to the United States. Industry stakeholders in all areas agree on the need for reform, and in light of the potential termination of the regional center program, it’s imperative for EB-5 leaders to work together to ensure a bright future for the EB-5 program and all the foreign investors looking to start a new life in the United States.

The EB-5 Immigrant Investor Program has long been a popular way for foreign investors to gain permanent residency in the United States for not only themselves but also their immediate family members. In fact, for some, the program has proven too popular—as of January 2021, EB-5 investment participants from China and Vietnam face lengthy backlogs that significantly delay the start of their new life in the United States.

Every fiscal year, a limited number of U.S. green cards are allocated for successful EB5 investment participants, and United States Citizenship and Immigration Services (USCIS) further restricts visa issuance by country of origin. All countries are capped at around 700 EB-5 visas per year, regardless of their population or EB-5 investment demand. Thus, in high-population, high-demand countries like China and Vietnam, backlogs can easily build up that significantly lengthen an EB-5 investment participant’s wait time.

To shed light on the state of USCIS backlogs, the immigration body releases monthly Visa Bulletins that list which countries are “current” (i.e., not backlogged) and the final action dates for those that are not current. If the posted final action date is later than an EB5 investment participant’s priority date (i.e., the date on which USCIS received their I-526 petition), the investor is finally in line to receive their conditional permanent resident status.

China’s Final Action Date

In May 2015, the Chinese EB-5 backlog first sprung up and has raged on for more than five years with no signs of decreasing. In the early days of the backlog, the number of days between the final action date and the current Visa Bulletin month was 730 days, meaning the initial final action dates clocked in at May 2013. Though more than five years have passed since the emergence of the backlog, the final action date has advanced by only two—as of the January 2021 Visa Bulletin, the Chinese final action date is August 15, 2015. Advancing a mere 31 days between June and November 2020, the day gap now stands at 1,935, the highest it’s ever been. The Chinese final date has remained at a standstill since August 2020.

Vietnam’s Final Action Date

It was May 2018, three years after the emergence of the Chinese backlog, that EB5 investment participants from Vietnam joined their northern neighbors in USCIS’s Visa Bulletins. With a final action date in July 2014, Vietnam began its Visa Bulletin journey with a four-year backlog—a day gap of 1,379 days. Unlike the Chinese day gap, which has risen steadily since emergence, the Vietnamese day gap has remained fairly consistent at between 1,000 to 1,100 days, save for a sudden spike to 1,775 in mid-2019 and a subsequent drop back down to normal levels a couple months later. As of January 2021, the Vietnamese final action date stands at September 1, 2017, with a day gap of 1,187, having advanced 51 days between June and November 2020. For the most part, the Vietnamese day gap has remained remarkably lower than the Chinese one, though the Vietnamese backlog similarly slows no signs of letting up.

Download EB-5 Visa Bulletin Trend Analysis

On January 19, 2021, just a day before President Biden’s inauguration, a Senate confirmation hearing was held for Alejandro Mayorkas, Biden’s choice to head the Department of Homeland Security (DHS). The secretary of DHS performs important work in overseeing U.S. immigration policy, and as a residency-by-investment immigration program, the EB-5 Immigrant Investor Program falls under the purview of DHS. That means EB-5 investment stakeholders should keep tabs on the leadership of DHS, as the secretary of DHS can introduce policy changes that impact the popular investment program.

During the confirmation hearing, Senator Josh Hawley (R-MO) blocked the fast-tracked confirmation of the nominee, citing concerns about Mayorkas insufficiently enforcing laws related to border security. Mayorkas is still expected to be confirmed, but the process is now delayed, with Transportation Security Administration Head David Pekoske taking over the role until Mayorkas’s confirmation. As Mayorkas will likely assume the position in due time, it’s worth it for EB5 investment participants and other stakeholders to take a look at his background.

Who Is Alejandro Mayorkas?

Though Mayorkas was born in Havana, Cuba, in 1959, he has spent most of his life in the United States, as his family fled Cuba in 1960 as a result of the communist revolution. Growing up in Los Angeles, he attended law school and served as an assistant U.S. attorney in California’s Central District for a period, successfully prosecuting various white-collar crimes. He then made the jump into a political career in 1989, eventually being appointed in 1998 by President Clinton as U.S. attorney for the Central District of California. In the period before he left office in 2001, Mayorkas managed a number of high-profile cases.

What Did Mayorkas Do in the Obama Administration?

When the Democrats regained power in 2009 following President George W. Bush’s time in office, Mayorkas was once again appointed in an important role: secretary of U.S. Citizenship and Immigration Services (USCIS). He held the position for most of Obama’s first term, leaving in 2013. As head of USCIS, Mayorkas had a chance to work closely with the EB-5 program, and if his historical achievements are anything to go by, EB-5 investment participants should look forward to Mayorkas’s leadership.

When Mayorkas inherited USCIS in 2009, the EB-5 program was in rough shape—“badly broken,” in Mayorkas’s own words. It was devastatingly underused, with a mere 800 foreign nationals making an EB5 investment in 2007, despite the numerous benefits of U.S. permanent resident status. Taking on the task of reviving the EB-5 program, Mayorkas succeeded magnificently, quadrupling the number of EB5 investment participants in just two years. In his final year as head of USCIS, Mayorkas restructured the way that USCIS evaluates I-526 and I-829 petitions, further strengthening the program and paving the way for explosive growth. Indeed, in 2014, for the first time, the EB-5 program issued all the green cards it had been allocated for the fiscal year.

Mayorkas’s time as head of USCIS ended with a promotion to deputy secretary of DHS in December 2013. Like in January 2021, his confirmation as deputy secretary was stalled on the grounds that he had “exerted improper influence” in the approval of a few EB-5 applications, but the resulting investigation found that he had acted within his powers. His appointment was confirmed in 2014, and he worked in various capacities to improve US–Cuba relations and manage the response to Ebola and Zika.

The Future of EB-5 under Mayorkas

What will happen to the EB-5 program under Mayorkas’s leadership is unknown, but Mayorkas’s qualifications are undeniable. Highly experienced and competent, Mayorkas is a solid choice to lead DHS, and his history with the EB-5 program suggests the development may be great news for those involved with EB-5 investments. With extensive—and personal—experience with immigration, Mayorkas is likely to usher in a period of facilitated immigration for EB-5 investors and other newcomers to the United States.

Since the COVID-19 viral outbreak, U.S. financial markets have fluctuated as governmental and regulatory bodies work to respond. Annual business planning and results have already all but gone out the window for many businesses across an exorbitant number of industries this year, and we still have some time before the true impact of these disruptions are known. Still, there’s one variable we can count on: the continuation of significant changes for as long as the COVID-19 crisis goes on. This can be especially concerning for foreign nationals already deeply invested—both in time and resources—in the EB-5 Immigrant Investor Program.

Updated Disclosures Aid EB-5 Investors’ Reassessment of Risk

EB-5 investment participants involved in financed projects are not sheltered from the adverse effects other similar businesses are experiencing in this relatively volatile time. Uncertainty stemming from temporary business closures, hiring freezes and layoffs, an uptick in medical leave across the nation, supply chain interruptions on a global scale, and even travel industry restrictions can all wreak havoc on an EB-5 project’s plans.

This isn’t necessarily the end of the EB-5 journey for those who have invested in an affected project. If they haven’t already, new commercial enterprises (NCEs) and other EB-5 operators should be providing essential updates on various securities disclosures that will help investors remain informed and able to reassess the risks for their projects so that they can react according to their own best interests. These disclosures will pertain to COVID-19 and the possible impacts on the project itself and on the capital that investors have contributed to it.

Any NCE that has EB-5 projects predating the coronavirus outbreak should be preparing or should have already prepared updated securities disclosures. Learn more about what these disclosures may mean for an EB5 investment and when they should be received, as well as what rights and options an investor may have after receiving them.

Offering Documents Prepared Before COVID-19

All EB-5 investment offerings are legally required by the U.S. Securities and Exchange Commission (SEC) to provide certain risk disclosures. This body oversees the execution of the laws and regulations put into place to protect investors in the United States. This legislation typically covers general risks and cautionary language regarding the uncertainties associated with the particular industry under which the project is classified.

An EB-5 investor is likely to see references to safe harbors availed to NCEs under the Private Securities Litigation Reform Act of 1995 (PSLRA), and the disclosures are even likely to include risks related to public health crises and pandemics. They are not, however, likely to address COVID-19 specifically, nor the current nature or severity of its impact on the economy. This doesn’t necessarily signal underhanded activity—how could a business have anticipated this? But now is the time for proper fiduciary handling, and the SEC requires accuracy in its full and fair disclosure statutes.

SEC’s Statements on Full and Fair Disclosure

A core requirement in the protection of investors is offering documents outlining “full and fair disclosure” of material information on an investment. Specifically, the Securities Exchange Act of 1934 not only outlines the prohibition of disclosing untrue statements of material fact but the omission of material facts necessary to prevent previous statements from becoming misleading as well. While no exact quantitative test for materiality exists under SEC laws, the precedent for determining violations is whether there is a substantial likelihood for a reasonable investor to consider a misstatement or omission an important factor in holding on to or selling their investment.

The SEC has cast a wide net when it comes to materiality, and issuers are advised to disclose supplemental offering documents any time there is any doubt as to whether a material fact has the potential to influence investment decisions. Any NCE that does not provide disclosures for significant project changes to its EB5 investment participants would potentially come into violation of Exchange Act laws.

Furthermore, some of the changes that can occur in the wake of a major event like the ongoing COVID-19 crisis may be considered material changes in the eyes of U.S. Citizenship and Immigration Services (USCIS) adjudicators too.

Disclosures on Material Changes from an NCE

Investors need these securities disclosures to ensure they remain eligible for their EB-5 investment visas throughout the allotted investment period. USCIS does offer some flexibility when it comes to discrepancies between original project documents and final outcomes—there are always unanticipated events in business. There are instances in which supplemental disclosures due to updated facts do not trigger findings of material change by USCIS. However, discrepancies that materially affect a project may put EB5 investment eligibility at risk.

Material Changes According to USCIS

Material changes are generally defined as those pertaining to significant aspects of an EB-5 project—ones that can impact adjudication decisions. These changes do not automatically result in petition denial, but they can drastically delay processing. There are several types of material changes that can affect an EB5 investment, including

• Changes to investment structure or that involve an investor’s capital in any way—source of funds is a common trigger for material change refiling
• Major shifts in any elements in the business plan, including project scope and timing or staffing structures that change job-creation goals
• Regional center sponsorship changes, especially when it involves the recent and widespread regional center shutdowns
• Significant updates to offering documents or any other project documentation

Typically, when a USCIS adjudicator determines that a material change has taken place during an investment period, the EB-5 investment applicant is required to file an updated I-526 petition providing the details of the project’s new circumstances.

Identifying Material Changes in Post-COVID Disclosures

Updates in statements regarding future risks and uncertainties will specifically address COVID-19. EB-5 investors are looking for accuracy of statements that were previously dependent upon future events and assumptions that may no longer be valid. Parts of the disclosure providing notice that COVID-19 may (or has) caused expected results to materially differ are of great interest. More thorough disclosures will outline a robust explanation of how the pandemic could present additional risks or exacerbate traditional risks.

Topics Proper Disclosures May Address

An NCE should clearly disclose how the virus may cause construction delays on a real estate project, for example, or that demand for a hotel project may dwindle following adverse effects on the travel and tourism industry due to an additional viral surge. They may then provide projections on expected operational changes or project evolution to successfully more through recovery.

The impacts upon job creation and allocation, direct references to material changes—these are the signals that an investor may find addressed in those disclosure documents. Additionally, there should be an explanation of EB-5 investors’ rights and when changes would require their consent. All these topics have the potential to affect material changes and impact an investor’s USCIS processing.

Steps Following Updated Securities Disclosures

An experienced EB-5 professional or immigration lawyer can review an investor’s disclosures to help them determine whether any updates signal a significant material change that needs to be addressed with USCIS. They can also advise on solutions to insulate an EB-5 investor from being negatively impacted by COVID-19. This may incorporate any updates from shifts in organization staffing, plans for new fund sources, or capital redeployment strategies as a few examples.

Ultimately, the EB-5 Immigrant Investor Program was designed to aid the U.S. economy in circumstances just like this. An EB5 investment is meant to help create jobs in areas where they are needed most, and to ensure compliance is in the best interest of all parties involved. Facing material changes due to economic and financial challenges is simply a hurdle, and everyone is rooting for success. With timely securities disclosures and a team of seasoned EB-5 professionals at the helm, the situation becomes nothing more than a matter of properly navigating choppy waters.

The choice to participate in the EB-5 Immigrant Investor Program is a decision that has the potential to change the trajectory of a prospective foreign investor’s life (not to mention that of their eligible immediate family members). The stress of navigating the complexities of today’s EB-5 marketplace and all the decisions involved in making the right EB5 investment can leave potential investors feeling anxious about such a bold move.

But ample resources and trustworthy assistance are available to help every interested investor down the path to permanent residency in the U.S. That said, it is important to understand that working with the right EB-5 investment partners is imperative and that proper due diligence in selecting who to turn to for advice is the first step to ensuring the smoothest EB-5 journey possible.

There are generally two ways a foreign national may elect to invest through the EB-5 program—direct and indirect EB5 investments. Which road to travel depends on the investor’s investment and business goals, but by and large, the most popular option among foreign investors seeking an EB-5 visa is to invest through an EB-5 regional center. Selecting a qualified project through the right regional center often eliminates much of the stress associated with U.S. Citizenship and Immigration Services (USCIS) petition submissions and compliance issues because investors work with people who are already familiar and have experience with the adjudication process.

Long-standing, experienced regional centers with established track records can be a godsend on the path to U.S. residency. However, some bad actors work in the EB-5 landscape. Learn how to determine the difference between finding the perfect project and recognizing a marketing strategy.

What Are Preapproved EB-5 Projects?

As an investor searches for the right project, they are likely to encounter EB-5 regional center projects that have been preapproved by USCIS. One of the greatest advantages of working through a regional center is easier access to preapproved projects, but it is important to understand what that means.

Saying a project is preapproved may give some prospective investors the impression that USCIS has somehow granted preference to their EB5 investment project over others in the market. This is not true. While reputable regional centers have worked hard to establish solid relationships with USCIS, understand that the agency does not offer any preference for one project over another. Every single project must be presented in the proper format, must be evaluated against the same set of guidelines, and must be officially adjudicated and approved.

The marketing tactic of framing investment in a preapproved project as guaranteeing successful immigration outcomes stems from regional centers securing approval on an I-924 petition which, in reality, involves the evaluation of a preliminary business plan. This approval is known as an I-924 exemplar.

Marketing the I-924 exemplar to entice investors doesn’t necessarily mean a regional center should be immediately stricken from a consideration set, but it may send up a red flag depending on how far into the discussion they communicate what this approval actually means and where your project of interest actually is in the process.

If they explain exactly what they mean early on in your initial inquiry, then the project may be worth further exploration. If you don’t hear a word about what an I-924 exemplar actually means, you may be safer to pass on the investment.

Approved I-924 Exemplar and “Deference”

In December 2009, USCIS introduced the notion of an I-924 exemplar. The rationale was that if an EB5 investment project submission (through an I-924 petition packet) included a business plan that was evaluated and deemed to sufficiently meet EB-5 program requirements before Form I-526 submission, then USCIS provides “deference” to the I-526 petitions that use the same business plan and documents later on in the process.

Deference is simply the acknowledgement of previous evaluation of a business plan, meant to conserve already scarce USCIS agency time and resources. When an EB-5 regional project has deference, it means that when a new EB-5 investor submits their I-526 petition for adjudication, USCIS is not required to reevaluate the business plan portion of their application, but can instead focus on an applicant’s source-of-funds verification and other personal information.

Furthermore, deference does not shield a later investor’s submission from denial. An I-924 exemplar is granted when the project outlined in the original submission met all EB-5 program requirements—it was “approvable” at the time of that original filing. Because an I-924 petition can sometimes take years to process, by the time a new investor files their I-526 petition, it is quite possible that components of that original I-924 have become irrelevant or invalid.

When Policies Change After I-924 Approval

Some common aspects of a business plan that can change include economic and financial projections and project feasibility studies. Thus, it is nearly impossible to guarantee a project as preapproved and compliant with all current policies and regulations—especially with the current political and economic state of the U.S. In fact, the newest regulatory reforms for the EB-5 visa program went into effect in November 2019. So, if an investor is considering a regional center partnership on a project that was preapproved before then, chances are there would need to be changes to the plans before final USCIS project approval.

Again, an older I-924 exemplar doesn’t necessarily mean an investor should cross a current project off the list. Rather, they need to ask important questions about the validity of its supporting documents, whether a project meets the latest compliance guidelines, and if updates are available or in queue before proceeding with an EB-5 investment submission. As with any type of investment, the key is always clear communication of risk. If, however, a regional center is promising an expedited process based on outdated I-924 approvals prior to November 21, 2019, with no mention of the risks involved, it should certainly signal a hard pass.

Communicating Risks in an EB-5 Project

The primary goals of every EB-5 investment are to successfully obtain green cards for investors and their eligible family members and to have their capital investment successfully returned. To ensure both these goals are met, each investor and their immigration attorney must engage in proper due diligence at the core of their endeavors. Even when an investor uncovers risk through their own investigation, their project partners should be openly disclosing it to them as well. A lack of transparency means even further increased risk and quickly leads to questions of ethics and mistrust—neither of which is acceptable when working with the U.S. government.

On the other hand, when a regional center is open and upfront about the current status of a project, the exemplar (no matter its approval date) can become a roadmap for the success of each subsequent investor’s I-526 petition. As a leader in the EB5 investment industry, EB5AN retains a 100% approval rate with USCIS, in large part due to its level of transparency among all its partners. These include 14 EB-5 regional centers with operations in more than 20 states across the nation and over 1,800 foreign investors from 60-plus countries around the globe, as well as the governing bodies of the residency-by-investment field.

Why Investors Choose EB5AN

Besides its long-standing EB-5 industry relationships and its proven track record, foreign investors who choose an EB5 investment look to EB5AN because of the wealth of cost-free resources available to all of our partners. Whether an investor is still vetting projects and needs access to an up-to-date national TEA map, wants to pass a project through an EB-5 project risk assessment questionnaire, or is ready to run their plans through an EB-5 job creation calculator, EB5AN can help! The network also maintains a digital library chock full of industry news and insider advice.

Furthermore, the top-notch team of EB-5 investment professionals has extensive expertise in areas ranging from business and investment evaluation and strategy to immigration, securities, and tax law. Every foreign national seeking answers to EB-5 program questions is welcome to reach out. Begin to see the difference EB5AN can offer from first contact!

On January 20, 2021, President-Elect Joe Biden will take over the White House, signaling the end of the Trump administration. Assuming office in the midst of the most severe pandemic since the early 20th century, Biden will undoubtedly have his hands full, overseeing far more than just the EB-5 Immigrant Investor Program. Nonetheless, the impending change of office has prompted those involved with EB-5 investments to question what changes the Biden administration will bring to the United States’ popular green-card-by-investment program.

Biden’s History with the EB-5 Program

A quick glance back through history reveals that President-Elect Biden has traditionally acted favorably toward the EB-5 program. In fact, he contributed to the program’s creation in 1990. As a U.S. senator representing Delaware, Biden voted in 1990 to pass the Immigration Act of 1990, which proposed the establishment of a residence-by-investment program, in conjunction with a number of other immigration programs. While it’s not possible to derive Biden’s opinion of the EB-5 program specifically based on his support for the act, it can at least be assumed that he didn’t oppose it.

The EB-5 program also came up during Biden’s time as vice president in the Obama administration. The administration indicated its support for the program, highlighting the economic advantages EB5 investment capital affords the United States, and acknowledged the EB-5 program’s role in creating new employment opportunities in targeted employment areas (TEAs). However, despite the administration’s clear support for the program, it failed to introduce long-awaited changes, including much-needed reform and a permanent reauthorization of the EB-5 Regional Center Program.

How Will the Biden Administration Treat the EB-5 Program?

Biden has not indicated his feelings toward the EB-5 program in recent times, but he has stressed his support of various forms of immigration. Given that the EB-5 program is a somewhat controversial program in the media, Biden may not directly voice his support, but if he lumps the EB-5 investment program in with the rest of his immigration plans, EB-5 stakeholders may enjoy a more favorable EB5 investment environment in the years to come.

Biden Wants to Modernize the U.S. Immigration System

Biden’s website states clearly that he intends to immediately work to modernize the U.S. immigration system, expanding economic opportunity across all 50 states by facilitating various routes of legal immigration. Fostering the EB-5 program and providing the reforms and changes it so desperately needs would certainly help expand economic opportunity across the United States, so hopefully Biden will consider the immense benefits of EB-5 investment in his immigration endeavors.

Biden Wants to Revitalize In-Need U.S. Cities with Immigration

The Biden administration recognizes the economic, cultural, and social advantages immigrants bring to their new cities. Employment-based immigration is a key factor in fostering entrepreneurship and growth in communities across the United States, including in cities that have suffered major job losses or economic decline over the past years or decades. Since the EB-5 program heavily incentivizes EB-5 investment in TEAs, the program can certainly leverage the benefits of immigration to foster the economic and population growth of in-need U.S. communities, including by creating new full-time employment opportunities. Hopefully, the Biden administration also recognizes this.

Biden Wants to Leverage the Economic Advantages of Employment-Based Immigration

The United States has long prided itself on its spirit of innovation and entrepreneurship, and immigrants contribute immensely to the innovative and entrepreneurial nature of the United States. The Biden administration states on its website that foreign-born workers add around $2 trillion to the U.S. economy each year, and some of the most lucrative sectors of the U.S. economy, including technology, benefit heavily from the contributions of immigrant workers. Biden’s website explains that his government hopes to leverage the benefits of employment-based immigration to further the U.S. economy. Hopefully this ambition includes the EB-5 program, which injects millions of foreign EB5 investment capital straight into the U.S. economy annually.

The EB-5 Program Can Help Rebuild the U.S. Economy

With the world still in the throngs of the COVID-19 pandemic as Biden assumes office, rebuilding the U.S. economy will fall squarely on Biden’s shoulders. Facing the worst economic downturn since the Great Depression, the United States desperately needs foreign capital and successful, wealthy immigrants to help get its economy back on track. The EB-5 program can contribute significantly to “building back better,” as the Biden motto goes, particularly given its focus on TEAs, categorized by higher unemployment than the national average. As Biden steps into the White House, the EB-5 program stands ready to contribute millions in EB-5 investment funds to the U.S. economy, and Biden would be wise to facilitate this valuable source of foreign capital.

Since 1992, two years after the dawn of the EB-5 Immigrant Investor Program, the regional center route of the EB-5 investment journey has been the preferred pathway to the United States for foreign nationals. The EB-5 Regional Center Program’s popularity is attributable to a number of factors, including the following:

• the relative security of making an EB-5 investment through an approved EB-5 regional center with experienced business, investment, and EB-5 professionals
• the freedom associated with not needing to be involved in day-to-day management at the new commercial enterprise (NCE), allowing investors to, for example, make an EB5 investment in a project in Florida but set up home in Oregon
• relaxed job creation requirements that allow investors to count indirect and induced jobs, instead of just direct jobs, toward the minimum 10 jobs their EB5 investment must create

Given the obvious advantages of EB-5 regional center investment, it has become the clear favorite, with most EB-5 investment participants opting for the regional center route. However, regional center investments face one uncertainty that those who invest directly in an NCE bypass: the possibility of termination of the EB-5 Regional Center Program.

The History of EB-5 Regional Center Program Reauthorizations

The problem with the EB-5 Regional Center Program is that it is not a permanent U.S. government program, leaving open the possibility of termination without warning. Considering that the EB-5 Regional Center Program funnels billions of foreign capital directly into new U.S. businesses, generally in rural or high-unemployment areas in need of economic stimulation (also known as targeted employment areas, or TEAs), a sudden termination of the program is almost unthinkable. Nonetheless, while EB-5 investment participants and stakeholders act on the assumption that it will be continually reauthorized, the EB-5 world must acknowledge the possibility, however slim, of an abrupt sunset of the program.

Congress introduced the EB-5 Regional Center Program in 1992, two years after the creation of the EB-5 program itself. It was initially approved for five years until 1997, undergoing periodic reauthorization, typically of a few years at a time, until 2015. Matters then took a turn toward chaos, with the appropriations process leading to short-term reauthorizations of just a few months at a time. Bundled in with a myriad of other government funding bills and immigration programs, the EB-5 Regional Center Program fell victim to bureaucratic inefficiency, with deliberations on other programs impacting the reauthorization of the lucrative Regional Center Program.

As of January 2021, the latest EB-5 Regional Center Program sunset date suggests Congress may be gearing up to consider the program independently. Since 2015, the program has typically been reauthorized for only a few months or until the next September 30, which marks the end of the fiscal year. With the most recent reauthorization announced in December 2020, the EB-5 Regional Center Program is set to expire on June 30, 2021, separating it from the rest of the programs in the appropriations bill. Time will tell how Congress treats the program going forward.

What Would Happen If the EB-5 Regional Center Program Were Terminated?

The uncertainty of Congress’s sporadic extensions of the EB-5 Regional Center Program begs the question of what would happen in the event of sudden termination. The EB-5 world has faced this question before, such as in 2012, when a three-year authorization period was coming to an end and EB-5 investment participants were not yet accustomed to constant extensions. When the issue was raised in a January 2012 stakeholder meeting, United States Citizenship and Immigration Services (USCIS) sidestepped the question, responding merely that it did not have a response at the time and would address the matter when and if it occurred.

Clearly dissatisfied with UCSIS’s non-answer in January, EB5 investment stakeholders brought the question back in a May 2012 stakeholder meeting, this time receiving a more detailed—although still vague—response. USCIS explained that all regional center designations would automatically expire (i.e., all EB-5 regional centers would automatically be terminated) and USCIS would no longer possess the authority to issue new regional center designation.

The clear lack of policy regarding a possible sunset of the EB-5 Regional Center Program should be construed positively—it suggests Congress has no intention of terminating the popular EB5 investment route. Undoubtedly, if the EB-5 Regional Center Program were terminated, the United States would lose out on billions in foreign investment capital, and lawsuits from disgruntled foreign investors whose pathway to a permanent life in the United States was suddenly pulled out from under them could begin to pile up. That’s not to mention regional center operators and lobbyists, who rally passionately to maintain the popular EB-5 investment pathway, as well as supportive politicians such as Lindsey Graham (R-SC).

IIUSA Government Affairs Webinar

On the subject of government affairs and how they may affect the EB-5 program, industry association group Invest in the USA (IIUSA) is holding a free webinar on February 3, 2021. Interested EB-5 stakeholders should consider attending and even emailing questions in advance to info@iiusa.org. The webinar will cover, among other topics, updates to legislation, the EB-5 reform bill proposed by Senators Grassley and Leahy, ongoing litigation related to the Freedom of Information Act, and the June 30 sunset date of the EB-5 Regional Center Program.

The COVID-19 pandemic ripped through the world mercilessly in 2020, leaving economies and livelihoods across the globe in ruin. Even now in January 2021, the pandemic rages on, with strict lockdowns and rigorous border restrictions from the UK to Japan. The EB-5 Immigrant Investor Program and the thousands of foreign nationals involved in active EB-5 investments were not spared, as the pandemic-induced temporary shutdowns of U.S. embassies and consulates effectively halted the issuance of new EB-5 green cards.

The development and distribution of COVID-19 vaccines, which, as of January 2021, is already being rolled out in developed countries with strong health care systems, such as the United States, is expected to curb the debilitating impacts of the crisis and trigger a much-awaited return to normal life. However, a large-scale vaccination initiative sufficient to bring about herd immunity is likely to be lengthy, and the ultimate result depends largely on the effectiveness of the vaccines.

Until the pandemic has finally subsided and the world can get back to living, those involved in EB5 investments will need to adjust to the ever-changing circumstances as they progress toward a better life in the United States. Unforeseen obstacles are likely in the midst of the COVID-19 pandemic, but fortunately, United States Citizenship and Immigration Services (USCIS) has introduced special accommodations for EB-5 investment participants affected by the COVID-19 pandemic or the resulting restrictions.

Longer Deadlines

The various shutdowns resulting from the pandemic can delay—or, in some cases, render impossible—the execution of certain tasks, even though that may be necessary for the EB5 investment journey. The unpredictable nature of the pandemic further means that new lockdowns or restrictions could be implemented at any time, potentially cutting off an EB-5 investor’s access to resources.

USCIS has responded to this unprecedented period of uncertainty with deadline extensions for requests for evidence (RFEs), notices of intent to deny (NOIDs), and certain other notices the agency sends. Anyone who receives an RFE or NOID between March 1, 2020, and January 31, 2021, is given an extra 60 calendar days to compile and submit a response. Note that the deadline indicated on the notice will be the regular deadline—simply add 60 days to determine the due date under the extended deadline.

Case-By-Case Considerations for Extenuating Circumstances

Various problems related to EB-5 investment and immigration can arise as a result of the COVID-19 pandemic at no fault of the individual investor. USCIS has taken a compassionate stance on such cases, stating it will consider extenuating circumstances on a case-by-case basis.

As an example, the pandemic could impact the ability of a foreign national residing in the United States and participating in an EB5 investment domestically to extend or change their immigration status as initially anticipated. Such an EB-5 investor may present their case to USCIS, who may deem their action or lack thereof as justified given the special circumstances. USCIS added that it may excuse delays in changing or extending immigration status if the delay was similarly due to special circumstances.

Accommodations for Missed Interviews or Biometrics Appointments

As scores of EB-5 investment participants experienced in 2020, attending a visa interview or biometrics appointment is often impossible in the new era of COVID-19. Acknowledging this limitation, USCIS has taken to offering accommodations for those who have missed certain interviews or biometrics appointments as a result of COVID-19 circumstances.

USCIS stresses that EB5 investment participants should aim to make their appointments but recognizes the pandemic could present unsurmountable obstacles to doing so. For example, if an EB-5 investor tests positive for COVID-19 or develops symptoms reflective of COVID-19, USCIS will deny them entry to its facilities. The immigration body similarly advises anyone with an illness similar to COVID-19, such as a cold, to cancel their appointment and reschedule. USCIS will not penalize anyone for rescheduling their appointment for illness-related reasons.

As custodians of public health during the COVID-19 crisis, governmental bodies all around the globe have found necessity in the temporary limitation of their citizens’ personal freedoms. This is most visible through adjustments to social benefits, the application of travel restrictions, and mandates on who can work and where they may do so, as well as by defining what constitutes essential needs.

A collateral consequence of navigating the global pandemic is that these limitations have forced prospective immigrant investors to re-evaluate whether possessing global mobility options remains important at this time. These kinds of decisions among foreign nationals with the resources to invest can have a rippling effect upon an already shaky global economy.

The same holds true for one of the most popular U.S. residency-by-investment initiatives, the EB-5 Immigrant Investor Program. A program implemented in 1990, it has provided hundreds of thousands of immigrant investors with a path toward lawful permanent residency in the United States. Simultaneously, it has garnered billions in foreign investment capital, stimulating job growth and the economy overall in the United States. Since the financial fallout in 2008, the EB-5 program has only seen exponential gains in popularity.

The U.S. Remains a Top Choice for Prospective Foreign Investors

The United States leads the world in COVID-19 infection rates, its last four years of leadership have been less than friendly toward immigrants around the globe, and racial and political tensions seem to have reached a fever pitch. Despite all of this, the nation remains a top contender for foreign investors, and here’s why.

Better Education and Healthcare Options

Access to world-class education and health care are cited as leading reasons foreign nationals keep the United States on their immigration wish list. The United States is the home base of many of the top universities in the world. Real estate investment is better than anywhere else, according to EB5AN survey of 300 wealthy Chinese investors, and Newsweek’s 2020 report shows three of the world’s best hospitals on U.S. soil.

Relative Political and Economic Stability

Despite what seems to its own citizens to be real political strife and economic downturn, compared to the rest of the world, the United States is still a beacon to immigrants from all over. It remains the land of the free, and through the EB-5 program, eligible EB5 investment participants can work and live freely in the country without additional requirements. Furthermore, more often than nearly anywhere else, diligent study and hard work are still rewarded.

A Closer Look at Turmoil Outside U.S. Borders

A number of political circumstances outside U.S. borders are increasingly becoming drivers of EB-5 investment. Latin America, for instance, has always dealt with cyclical politics and economics. But those ups and downs have been exacerbated by COVID-19, and individuals on the high end of the economic gap have sought stability through residency-by-investment programs. Economic and political shifts in Mexico, Chile, and Argentina in particular have left wealthy citizens under critical pressure.

New tax proposals aim to increase the tax burden on the wealthy to help cover costs for oversized and inefficient governments. New policies appear to abandon private capitalism in favor of more socialist-leaning legislation. As a result, high-net-worth individuals are transferring their wealth outside of their home countries in an effort to protect the value of their estates. Moving away from their countries of origin is a strategy to be free from their own governments’ burdening requests.

These foreign nationals who prefer to seek shelter for themselves and their eligible family members in the United States are setting their sights on the E-2 and EB-5 programs. The industry can reasonably expect considerable growth over the next few years from these applicants.

A Win-Win Investment Model

The EB-5 Immigrant Investor Program offers more than just meaningful incentives for foreign nationals—it also provides Americans with crucially important benefits. The jobs and economic wellness attained through the infusion of EB5 investment participants’ capital are key to this symbiotic investment model. This win-win initiative is a viable solution to quelling at least some of the unemployment burden brought on by the pandemic, and its viability has been proven time and time again over the course of its implementation.

The other key variable in this formula is the folks who support EB-5 investors. To maintain the well-earned momentum of this residency-for-investment program, the support systems in place for citizenship planning must remain strong.

The Journey to Residency-by-EB-5 Investment Is Complex

Tying up the normal loose ends of life and packing can end in logistical crises for anyone planning an international move. Being strategic in one’s financial, investment, and other estate planning endeavors adds whole new layers of challenges. Savvy foreign investors not only plan for the short-term but also set themselves up for the long game. For all of these reasons, it is crucial for EB-5 investors to partner with the right support team when they begin their EB-5 investment.

For international families and entrepreneurs seeking out an EB-5 investment team, there are a range of logistical solutions a network of EB-5 professionals should provide. Here are a few of them:

• Accounting and administration
• Corporate formation
• Local tax and regulatory compliance
• Preimmigration tax and legal guidance
• Trust information and establishment

One of the most complex and important aspects of planning a move to the United States is the tax implications it presents. The United States maintains a worldwide income tax model, which means each taxpayer is required to provide information on all U.S. and foreign income on every annual return. Global reporting is necessary for all foreign accounts, assets, and investments, as well. Every business owner and investor understands the importance of delegation and the importance of using trusted advisors and team members.