Every year, thousands of foreign nationals from around the world pour their dreams—and $1.8 million, or $900,000 if their selected project is in a targeted employment area (TEA)—into the EB-5 Immigrant Investor Program. Since 1990, the program has allowed countless foreign investors to obtain U.S. permanent resident status for themselves, their spouse, and their unmarried children younger than 21, as long as they invest enough money in a qualifying EB-5 project and meet various program requirements, including the creation of at least 10 full-time jobs for U.S. workers.
Program participants can choose to make their EB-5 investment directly in a project or indirectly via an EB-5 regional center. While both pathways, if successful, lead to the same outcome—a U.S. green card—the requirements differ slightly, and both pathways offer different advantages. Those with substantial managerial expertise may prefer to make an EB5 investment directly in a project because it allows them to participate directly in the day-to-day management of the new commercial enterprise (NCE) and exercise more control over their capital.
EB-5 regional center investment is, however, overwhelmingly the more popular option. Not only are regional center EB-5 projects more likely to be in TEAs, qualifying the investor for the lower investment amount of $900,000, but they also generally eliminate the need to be heavily involved in the NCE’s management by simply signing the investor on as a limited partner. Another major benefit of EB-5 regional center investment is softer requirements for job creation—indirect and induced jobs can be counted toward the 10-job requirement.
It is important to note that the EB-5 Regional Center Program is not a permanent program—since its instantiation, it has simply been renewed continually, for varying lengths of time. The EB-5 Regional Center Program was set to expire on September 30, 2020, but as the date approached, most EB-5 participants weren’t concerned—historically, the program has always been renewed.
Spending Legislation Passed by the House
On September 22, 2020, the House overwhelmingly passed a continuing resolution in a bipartisan vote. Called H.R. 8337, the Continuing Appropriations Act, the bill dealt with continuing government funding for a variety of critical government programs, including the EB-5 Regional Center Program. The legislation also encompassed the Emergency Stopgap USCIS Stabilization Act, which proposed expanding premium processing fees for some types of immigration. Such fee hikes are necessary to help United States Citizenship and Immigration Services (USCIS) stay afloat during a difficult time in which immigration has been largely halted due to the COVID-19 pandemic. USCIS already narrowly avoided a massive furlough in August 2020, scraping by thanks to reduced expenditure and increased revenue and receipts.
EB-5 Regional Center Program Extended to December 11, 2020
Late September 30, 2020, President Trump finally signed the continuing resolution the House had passed a week earlier in an overwhelming bipartisan victory. With that, several government programs were extended until December 11, 2020, including the EB-5 Regional Center Program. The passing of this bill allows the government to skirt a shutdown, which could be disastrous during a time of crisis catalyzed by the COVID-19 pandemic.
EB-5 investors and regional center managers may now breathe a sigh of relief, expected as this extension may have been. Come December 2020, investors, project developers, regional center owners, and others involved in EB-5 investment should tune into the latest EB-5 news to see whether the EB-5 Regional Center Program will be extended once again.