The EB-5 investment program underwent many changes in 2021, many of which were unexpected and had a significant effect on the industry. For instance, the EB-5 Modernization Rule, a far-reaching amendment to many EB-5 regulations, was repealed in June 2021. As a result, the EB-5 investment threshold was lowered, and the process for designating targeted employment areas (TEAs) once again became the responsibility of individual states.
The most significant change to the EB-5 program in 2021 was the expiration of the regional center program, which left the EB-5 industry without its most popular investment model. As a result of this legislative lapse, EB-5 investors in regional center projects who filed Form I-526 are now unable to proceed with the EB-5 process. United States Citizenship and Immigration Services (USCIS) is no longer processing I-526 petitions from regional center investors.
The lapse in regional center EB-5 investment has also shifted attention toward direct EB-5 projects. Even though direct EB-5 investors do not enjoy the more flexible job creation criteria of their regional center counterparts, the direct EB-5 investment model does not rely on government revalidation.
Of course, it is possible for more changes to take place in 2022, and EB-5 industry stakeholders should be prepared for such changes.
The EB-5 Investment Threshold
As of the June 2021 repeal of the Modernization Rule, the minimum investment amounts are $500,000 for projects in TEAs and $1,000,000 for projects outside TEAs. However, many analysts believe that the U.S. government will raise the amounts in the relatively near future. If Congress approves any legislation that introduces reforms to the EB-5 program, the minimum amounts will likely become higher than the Modernization Rule-era thresholds of $900,000 for TEA projects and $1,8000,000 for non-TEA projects.
In light of this possibility, interested foreign nationals should consider participating in the EB-5 program as soon as possible. Many foreign nationals successfully made direct EB-5 investments in 2021 and filed their I-526 petitions.
The Adjudication of Regional Center I-526 Petitions
As mentioned previously, USCIS is not adjudicating I-526 petitions from regional center investors. Foreign nationals who filed I-526 petitions may fear that the agency could take the next step and issue denials to regional center investors. However, it is unlikely for USCIS to do so; denying pending regional center petitions only because of the program’s suspension would undoubtedly result in numerous lawsuits.
There is a chance that the EB-5 industry will succeed in promoting legislation that would allow regional center investors to be “grandfathered in” and continue with the EB-5 process even if the regional center program remains suspended. Such a scenario would become likely if Congress continues to delay the reauthorization of the regional center program.
Currently, the EB-5 industry must follow the pre-Modernization Rule criteria for designating TEAs. However, if USCIS or the Department of Homeland Security (DHS) takes action to restore Modernization Rule regulations governing TEAs, there will likely be stricter eligibility criteria for high-unemployment TEAs. Such a change may make it more difficult for EB-5 projects to receive TEA status.
The EB-5 Industry’s Continued Success
Despite its rapidly changing regulations, the EB5 investment industry continues to succeed, helping foreign nationals relocate to the United States and benefitting businesses across the country. Foreign nationals and business owners interested in the EB-5 program would do well to keep these potential changes in mind.