At long last, it appears Congress has heeded the call of anxious EB-5 investors, regional centers (RCs), developers, and other EB-5 industry stakeholders. The “EB-5 Reform and Integrity Act of 2022” is attached to a massive spending bill that is likely to be passed this week to fund the U.S. government. It thus appears that the EB-5 regional center program will be extended through September 30, 2027, with significant changes. This is great news for both existing and future investors.
The EB-5 reform bill runs to nearly 40 pages. We highlight here some of the major provisions and how they may impact various EB-5 stakeholders:
- Pending I-526 petitions will not be subject to the new rules or higher investment amounts.
- Adjudication of I-526 petitions and adjustment of status applications, and consular processing will resume upon enactment of the bill.
- The required investment amount will go up to $800,000 for targeted employment areas (TEAs) or “infrastructure projects”. Otherwise, the investment amount will be $1,050,000.
- Grandfathering provisions direct USCIS to continue to process EB-5 petitions if there is a future EB-5 program lapse, as long as the EB-5 petition is filed by September 30, 2026.
- the bill sets aside 20% of total EB-5 visa numbers for investments in rural areas, 10% for investments in high unemployment areas, and 2% for investments in infrastructure projects.
- Protection for dependent children aging-out in certain circumstances.
- Concurrent adjustment of status filings permitted with I-526 petitions.
- Gifts still permitted, and not limited to familial relations.
- Source of funds requirements apply to capital investments, administrative fees, and any fees “associated” with the investment.
- There is a mechanism for switching projects if a regional center or new commercial enterprise (NCE) is terminated.
- Caps placed on indirect and construction jobs.
- An I-924 application must be filed before individual I-526 petitions may be submitted.
- TEA letters are valid for 2 years.
- RCs must be audited by USCIS at least every 5 years.
- (Possibly) redeployment permitted outside RC geography (subject to regulations).
- Prohibitions on RC involvement for persons who have committed certain crimes or have been subject to orders or sanctions by certain state or federal enforcement agencies.
- Disclosure required of third-party agent fees and involvement in a project.
- Direct and third-party promoters must register with the USCIS.
- New rules on RC/NCE “funds administration”.
The bill contains many other noteworthy provisions, such as an EB-5 Integrity fund which, among other things, requires USCIS to investigate “program related events and promotional activities” outside the US.
While this legislation is far from perfect, it is sure to be a boost for the EB-5 regional center program for several years. Miller Mayer will continue to analyze the impact of this important legislation, and the regulations and guidance that will flow from it, on EB-5 investors, regional centers, and project developers.