The second half of 2021 has been a turbulent and historic time for the EB-5 Immigrant Investor Program—many of the program’s long-standing regulations have been altered, with both positive and negative consequences for investors. The first major alteration to the EB-5 program’s rules was the June 22, 2021, repeal of the much-criticized Modernization Rule. As a result of this court ruling, the minimum investment amounts were lowered significantly, thus making the EB-5 program accessible to more foreign nationals. As a whole, the EB-5 investment industry celebrated this decision.
However, on June 30, 2021, the regional center program, an essential component of the EB-5 investment industry, expired. The Senate failed to pass the EB-5 Reform and Integrity Act, which would have reauthorized regional center investments and introduced new EB-5 integrity measures. Because Senator Lindsey Graham blocked the unanimous consent vote, the EB-5 industry was left without its most popular and convenient investment option. As of September 16, 2021, the regional center program has not been reauthorized.
It is urgent for the regional center program to be reauthorized—if this investment option remains suspended for a prolonged period, the consequences for the EB-5 industry could be dire.
The Plight of Regional Center Investors
Due to the expiration of the regional center program, United States Citizenship and Immigration Services (USCIS) has announced that it will no longer accept I-526 petitions from regional center investors. Form I-924, Application for Regional Center Designation Under the Immigrant Investor Program, will also be denied. More importantly, the agency will no longer process any preexisting petitions associated with regional centers. Due to this policy, regional center investors who complied with all of the program’s regulations, made a qualifying EB-5 investment, and submitted Form I-526 will be unable to receive conditional permanent resident status until USCIS begins to process regional center petitions once more.
If regional center I-526 petitions remain in limbo for a prolonged period, the EB-5 industry could potentially lose billions of dollars. Regional center investors could lose hope that the regional center program will be revalidated and try to get their invested capital back. Moreover, if USCIS decides to deny existing regional center I-526 petitions, thousands of EB-5 visas could go to waste. The longer this situation drags on, the more likely it is for these unfortunate scenarios to take place.
Fortunately, USCIS is still processing existing I-829 petitions, which are used by investors to obtain permanent resident status. All regional center investors whose I-526 petitions were approved and who successfully completed their two-year conditional permanent residency can file Form I-829.
Could Reauthorization Be Imminent?
Most likely, the regional center program will only be reauthorized as part of a larger legislative vehicle. For this to happen, the EB-5 industry would have to lower its expectations for significant reform. Conversely, Congress may have to agree to EB-5 stakeholders’ requests for reform. The various parties in the EB-5 investment industry seem unable to agree on what reform would be most beneficial.
The regional center program’s expiration is the most urgent issue facing the EB5 investment industry. Still, foreign nationals are currently allowed to invest directly at only $500,000. The minimum EB5 investment amounts may be raised once more, so interested foreign nationals should take advantage of this unique opportunity.