In February 2022, the U.S. federal government was in danger of a shutdown, as government spending was set to expire on the 18th. However, President Joe Biden signed a temporary spending bill, and a long-term spending package is now due on March 11, 2022.
The long-term spending bill had a previous deadline of December 2021, but it was pushed back, as the government has not been able to reach a bipartisan agreement on the federal budget. While these delays are likely to negatively affect the U.S. economy overall, the outcome of the omnibus spending package could affect the EB-5 investment industry in a significant way.
Potential EB-5 Investment Industry Reform
Many industry stakeholders predict that an EB-5 reform bill will be included in the omnibus spending package. A draft of the bill was leaked on February 3, 2022, and it included significant changes to the EB5 investment industry, including an increase in the minimum investment threshold. Currently, the minimum investment for an EB-5 project is $500,000. According to the leaked bill, that amount could increase to $700,000. It’s important to note that this threshold affects projects in targeted employment areas (TEAs).
However, not all of the proposed EB-5 reforms will hinder investors. In fact, the majority of the changes would lead to improvements in the EB-5 industry. These include measures to prevent fraud and the long-awaited reauthorization of the regional center program. This program, which was once the most common EB-5 investment, has been defunct since June 2021, causing many investors and their families to be left in processing limbo. United States Citizenship and Immigration Service (USCIS) has paused adjudication on all I-526 petitions from regional center investors, with no signs of if or when their processing will be able to continue. For many investors, this could mean the loss of their family’s life savings and a halt to their plans of obtaining U.S. permanent resident status.
While industry stakeholders hope that the EB-5 investment reform will be included in the upcoming omnibus spending package, there is no guarantee that this will be the case. In addition, the March 11 deadline may be pushed back once again, causing even further delays. Regardless of the decision made on the spending bill, it is important that foreign nationals who have already invested in regional center projects be allowed to continue their process and have their EB-5 visas adjudicated. This will help the EB-5 investment industry maintain its reputation as a safe route to U.S. citizenship and experience increased participation from foreign investors in the future.