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New EB-5 Bill Introduced to House of Representatives

New EB-5 Bill Introduced to House of Representatives

The numerous problems that have plagued the EB-5 Immigrant Investor Program in the 2010s are well known. 2020 was a particularly difficult year for the residency-by-investment program—and for much of the world—due to the devastation caused by the COVID-19 pandemic, the significantly diminished EB-5 investment demand inspired by the Modernization Rule’s higher minimum required EB5 investment amount, and the financial difficulties and narrowly averted furlough at United States Citizenship and Immigration Services (USCIS). To add to the program’s woes, when the EB-5 Regional Center Program was renewed in December 2020, Congress divorced it from the government spending bill it’s traditionally been coupled with, placing the popular program at risk of termination.

The EB-5 investment community has banded together to enact reform on the program, which is seen as the only viable way to ensure the reauthorization of the EB-5 Regional Center Program. One bill, the EB-5 Reform and Integrity Act, led by Chuck Grassley (R-IA) and Patrick Leahy (D-VT), was introduced to the U.S. Senate in April 2021, and has been backed by EB5 investment stakeholders as crucial to the reauthorization of the regional center program. The bill focuses on reform and integrity measures, as suggested by its name, but also touches on long-term reauthorization for the regional center program.

In May 2021, another bill, H.R. 2901, was introduced to the House of Representatives, this time concentrating on the regional center program reauthorization and other EB-5 Regional Center Program issues. Both bills propose a five-year authorization of the program through 2026, and H.R. 2901 also includes measures to improve accountability and increase trust between EB-5 investment participants and EB-5 regional centers. Introduced by Senators Greg Stanton (D-AZ) and Brian Fitzpatrick (R-PA), H.R. 2901 once again demonstrates the bipartisan interests of maintaining and fostering the EB-5 program, with both senators attesting to the important job creation potential of the residency-by-investment program.

EB-5 investment stakeholders, such as nonprofit industry trade association Invest in the USA (IIUSA) and the Coalition to Save and Create Jobs (CSCJ), have endorsed both bills, expressing their excitement at the introduction of yet another EB-5 reform bill. They urge more EB5 investment stakeholders to get involved and push for swift enactment. Indeed, with the EB-5 Regional Center Program set to expire on June 30, 2021, time is of the essence.

Why Is the EB-5 Regional Center Program So Important?

Even if the EB-5 Regional Center Program were terminated, the EB-5 Immigrant Investor Program itself would survive and continue to offer foreign nationals a chance to relocate permanently to the United States in exchange for funding job creation through an EB-5 investment. So, some may wonder, why is the regional center program so crucial?

Although investors have the option to make an EB-5 investment directly in a qualifying EB-5 project, most choose to invest through a USCIS-approved regional center. Regional center investment provides a number of benefits—instead of dedicating themselves to the everyday management of the new commercial enterprise (NCE), investors can simply join the project as a limited partner and vote remotely on pertinent matters. EB-5 regional center investors also get to count indirect and induced jobs toward their job creation count, making it easier to satisfy EB-5 program requirements. Finally, EB-5 investors benefit from the experience and expertise of EB-5 regional center operators, who can help investors compile their I-526 petitions and otherwise satisfy program requirements.

If the regional center program were terminated, some foreign nationals may still elect to pursue U.S. permanent residency rights through a direct EB5 investment. Many, however, may seek out residency-by-investment programs in other rich, highly developed countries, such as the UK or Australia. If the United States wishes to retain the economic stimulation and job creation afforded by the EB-5 program, enacting reform and reauthorizing the EB-5 Regional Center Program is imperative.