Most members of the EB-5 investment industry would certainly agree that 2021 has been a turbulent year, perhaps one of the most eventful periods in the EB-5 Immigrant Investor Program’s 31-year history. This year saw major changes to EB-5 policies and regulations.
To begin with, the EB-5 Modernization Rule, which had made many controversial changes to EB-5 investment regulations, was invalidated by a June 22, 2021 court ruling. This move reversed the minimum EB-5 investment thresholds back to their pre-November 2019 amounts of $500,000 for targeted employment area (TEA) projects and $1,000,000 for projects outside TEAs. The EB-5 industry as a whole welcomed this change enthusiastically, but the program would soon suffer a major blow. Just a few days later, on June 30, the regional center program expired. Congress failed to pass a bill that would have reauthorized the regional center investment model and made other reforms to the EB-5 program.
Despite this setback, many EB-5 investors and project developers were confident that the lapse in regional center EB-5 investment would be brief. Unfortunately, they were mistaken—as of December 2021, the regional center program remained unauthorized. Many had hoped that Congress would include EB-5 reform in an appropriations bill that was due in December 2021, but it now seems that regional center investment will not be revalidated until February 2022—at the earliest.
As 2022 begins, members of the EB-5 industry and foreign nationals interested in the EB-5 visa may wonder what the future holds for the EB-5 program.
Direct Investment Will Likely Remain Popular
Even though most EB-5 investors used to choose projects sponsored by regional centers due to their flexible job creation criteria, direct EB-5 investment is now the sole option for EB-5 investors. This investment model offers several distinct advantages, often granting investors increased managerial responsibilities and higher returns. Perhaps the greatest advantage to investing in a direct EB-5 project is knowing that direct investment will never suffer a legislative lapse—direct EB5 investment is an inextricable component of the EB-5 program. As such, it does not require periodic reauthorization. Many investors have found suitable direct EB-5 projects in 2021.
What Will Happen to Regional Center Investors?
Due to the expiration of regional center investment, tens of thousands of foreign nationals who had filed their I-526 petitions now find themselves unable to continue with the EB-5 process. United States Citizenship and Immigration Services (USCIS) is no longer processing I-526 petitions from regional center investors; the agency is unlikely to resume adjudication on such petitions unless Congress revalidates the regional center program.
Therefore, regional center operators and investors hope that EB-5 reform, including reauthorization for regional center investment, will be included in the appropriations bill that is due on February 18, 2022. The possibilities of a bill that exclusively addresses the EB-5 program to be passed in Congress are very low.
It may be that the EB-5 industry will find an alternative way to rescue regional center EB-5 investors from processing limbo, such as proposing legislation that would require USCIS to process regional center visa petitions even if the program is suspended. It is clear that the lapse in regional center investment has not only been detrimental to the EB-5 industry—it has also deprived the U.S. economy of much-needed investment capital.
Despite these potential issues, the EB-5 visa remains an ideal way to relocate to the United States, and it has injected billions of dollars of funding into U.S. businesses. 2022 will likely be another eventful and busy year for the EB-5 industry.