Foreign investors looking to permanently immigrate to the United States would do well to consider the EB-5 Immigrant Investor Program, which is considered among the fastest and simplest ways to attain U.S. permanent resident status. Those who choose to make an EB-5 investment to gain green cards for themselves and their immediate family members are presented with two options: direct investment in an EB-5 project or indirect investment via an EB-5 regional center. While both options have their merits, the undeniable winner is the regional center route, selected by most EB5 investment participants for its relative security and freedom as well as the easier job creation requirements it affords investors.
The problem is that, unlike U.S. permanent resident status, the EB-5 Regional Center Program is not permanent. While Congress has made the EB-5 Direct Investment Program permanent, its far more popular counterpart remains temporary, with Congress issuing continuous reauthorizations to sustain the massive flows of foreign EB5 investment capital into the U.S. economy. Since the EB-5 Regional Center Program represents a key factor in attracting foreign capital and bolstering job creation, EB-5 stakeholders do not anticipate a revocation of the program, especially given that President Trump spared EB-5 investors from his broad immigration ban in 2020. However, until the overwhelmingly popular EB-5 investment program is made permanent, it will be a constant source of uncertainty in the EB-5 industry.
Back-to-Back Regional Center Program Reauthorizations in Late 2020
Upon each reauthorization of the EB-5 Regional Center Program, Congress determines anew the period of validity, so the program is constantly reauthorized for varying periods of time, ranging from years to a single week. In 2020, the first reauthorization came on September 30, the end of fiscal year 2020, having remained steadily authorized throughout the year until that point.
When the EB-5 Regional Center Program was reauthorized on September 30, it was only for a short two and a half months until December 11, 2020. The Regional Center Program’s reauthorization was bundled in with numerous other government funding bills, and Congress was likely attempting to buy itself more time to deliberate over funding issues for 2021 as the government continues to navigate the devastating effects of the COVID-19 pandemic.
However, two and a half months proved too short. On December 11, 2020, Congress pushed the sunset date of the EB-5 Regional Center Program ahead just one week, setting it to expire on December 18, 2020. This way, the government had one more week to iron out the issues in its funding bills and other government programs heading into 2021.
On December 18, 2020, came the first sizeable EB-5 Regional Center Program reauthorization of 2020. Part of the Consolidated Appropriations Act 2021, the Regional Center Program has been secured through June 30, 2021, alongside various other government programs.
Potential Changes on the Horizon
December 18’s EB-5 Regional Center Program reauthorization simply prolongs the period of validity of the popular EB5 investment program—nothing more. Indeed, this is the typical form Regional Center Program reauthorizations assume. But changes could be coming to the EB-5 program, such as the abolition of country-based restrictions in visa numbers or a major EB-5 reform. A bill proposing the elimination of country caps at United States Citizenship and Immigration Services (USCIS) has passed through the Senate with broad, bipartisan support, which could spell major changes to I-526 processing, particularly for the direly backlogged Chinese EB-5 investment participants. Simultaneously, a bill pushing for major EB-5 reform to strengthen integrity measures, better foster job growth, and more strongly protect EB5 investment participants has been presented in the Senate. One of its proposals is to reauthorize the EB-5 Regional Center Program for longer-term periods, such as several years.
While these much-anticipated changes to the EB-5 program have not materialized in the December 18 reauthorization of the Regional Center Program, Congress has introduced one deviation from the norm. Interestingly, the EB-5 Regional Center Program has been reauthorized until the end of June 2021 as opposed to the end of the fiscal year. This separates the EB-5 Regional Center Program from the other federal spending bills it has been grouped together with and could signal a stronger focus on the EB-5 program as a standalone issue in the future. Perhaps, the reforms the EB-5 program so desperately needs are indeed on the way.