In 2021, EB-5 investors and other stakeholders in the EB-5 Immigrant Investor Program industry have faced an uncertain future, with the EB-5 Regional Center Program scheduled to expire on June 30, 2021. The regional center program, which oversees a large network of EB-5 regional centers across the country through which foreign nationals can make more secure and regulated EB-5 investments, is an important aspect of the EB-5’s popularity and success. Because the program has not been made permanent, it has been subject to constant reauthorization over its three decades of existence, but historically, it has been coupled with an omnibus funding bill guaranteed to pass. With Congress divorcing the program from this bill when it reauthorized both in December 2020, the EB-5 Regional Center Program must now vie for reauthorization on its own, putting it in imminent danger of termination.
With only a month to go until June 30, 2021, EB-5 investment stakeholders from all corners of the industry are growing increasingly concerned about what may happen if the vital program fails to be extended. While expiration should by all means be avoided, it may not be as catastrophic as some believe. It’s impossible to say what could happen if the EB-5 Regional Center Program expires on June 30, 2021, but we can draw from historical examples to estimate the damage. Little known is the fact that the regional center program already expired—temporarily—at the end of 2018.
The EB-5 Regional Center Program’s Expiration in 2018
The expiration of the regional center program in 2018 wasn’t related to the regional center program itself—Congress simply failed to pass the omnibus funding bill it was tied to, resulting in a U.S. government shutdown and terminating the EB-5 Regional Center Program by association. Upon expiration, United States Citizenship and Immigration Services (USCIS) issued a statement clarifying the situation to panicking EB5 investment participants and stakeholders.
In the statement, USCIS warned that it would not accept new I-924 petitions to set up new regional centers as of December 21, 2018—the date on which the program officially expired—and that any pending I-924 petitions would be put on hold indefinitely. Regional centers were instructed to submit their I-924A form for FY2018 as normal, despite the official expiration of the program.
The letter went on to state that USCIS would continue to accept I-526 petitions—the first petition filed by a foreign national making an EB-5 investment—but as of December 22, I-526 petitions affiliated with regional centers would be put on hold indefinitely, even those received before the expiration date. Investors at the I-829 petition stage—the petition to remove the conditions from an investor’s conditional permanent resident status—were the only ones unaffected, even if they filed after the expiration date.
On January 25, 2019—roughly a month following the initial expiration—the U.S. government finally reached an agreement on the funding bill, and with that, the EB-5 Regional Center Program was also extended. Upon official resumption of the program, USCIS lifted its restrictions and began processing I-526 and I-924 petitions as normal. Thus, while the shutdown resulted in processing delays—indeed annoying—it was by no means a catastrophe.
Could This Time Be Similar?
The divorcing of the EB-5 Regional Center Program from the government spending bill is a point of concern for many in the EB5 investment industry. If the regional center program does expire on June 30, 2021, and pending I-526 petitions are put on hold, the U.S. government may not prioritize its reauthorization, considering it’s now a standalone program. This is a valid concern, but there’s also reason to be optimistic—the EB-5 program has contributed more than $41 billion in foreign capital to the U.S. economy, creating more than 820,000 new jobs for U.S. citizens and permanent residents at no cost to U.S. taxpayers. The EB-5 program also enjoys strong bipartisan backing, evident in the political support for the EB-5 Reform and Integrity Act that has been introduced to the House and Senate and embraced by EB5 investment stakeholders as a pathway to reauthorization, so the program shouldn’t fall victim to partisan bickering.
The threat of expiration is real, and the EB-5 industry should do everything possible to avoid this outcome—but don’t panic. Though many politicians are reluctant to loudly voice support for the EB-5 program, many still recognize the myriad of benefits it provides to the United States at no cost. Even if the program expires temporarily, in all likelihood, processing delays will be the worst outcome—the U.S. government is unlikely to definitively terminate a program as valuable as the EB-5 program.