Thousands of foreign nationals from all over the globe have invested their time and energy – and millions of dollars – in EB-5 Immigrant Investor Program projects annually since the early 1990s. This program has paved the way for innumerable foreign investors to attain U.S. permanent residency status for themselves and qualifying family members over the years. As long as their minimum EB-5 investment of $1.8 million in a program-approved project – or $900,000 when located in a targeted employment area (TEA) – has met the appropriate requirements, they have successfully secured U.S. green cards.
Part of what makes this U.S. immigration program so popular among foreign nationals is the flexibility it offers investors. Their EB5 investment may be applied directly to a qualifying project or indirectly through an EB-5 regional center. Both direct and indirect EB5 investment paths lead to the same destination, but the program requirements are slightly different, and they each offer their own advantages. That said, the EB-5 regional center investment pathway is overwhelmingly the more popular option.
Reasons for EB-5 Regional Center Program’s Popularity
The primary reason investors prefer investing in EB-5 regional centers is that they can choose varying degrees of involvement. Those who prefer a more hands-on approach due to substantial project management expertise are more likely to elect to participate in a direct EB5 investment project so that they may participate in the daily management of the new commercial enterprise (NCE). A related advantage of this option is the ability to exercise more control over their capital.
On the other hand, investing in a regional center requires less involvement in the NCE’s day-to-day handlings when the investor chooses to sign on as a limited partner. Furthermore, EB-5 investment projects through a regional center are more likely to be located in a TEA, which allows investors to opt in at half the minimum investment amount ($900,000). Another huge investment benefit of EB-5 regional centers? Lighter job-creation requirements. Both indirect and induced jobs can be counted toward the 10 full-time job minimum.
The issue is that the EB-5 Regional Center Program was never solidified as a permanent fixture of the EB-5 investment program. Since the program’s inception, the government is required to continuously renew it and has done so for varying periods of time over the years. September 30, 2020, marked the latest expiration date for the EB-5 Regional Center Program, and while most program participants remained unconcerned because the program has always been renewed, the current administration was well within its rights to forego renewal. Fortunately, that did not happen.
The House Passes New Spending Legislation
Late September 2020, a bipartisan vote resulted in the House’s overwhelming support for a continuing resolution bill. The Continuing Appropriations Act covered the continued allocation of government funding for a number of critical initiatives, including the EB-5 Regional Center Program. Additionally, legislation addressed necessary fee increases for a handful of processing activities to protect United States Citizenship and Immigration Services (USCIS) from going under in the wake of difficulties attributed in large part to immigration pauses during the COVID-19 pandemic. This funding further fortifies USCIS’s successful efforts to reduce expenditures and increase revenues over the summer of 2020, which ultimately helped them avoid a massive furlough in August.
EB-5 Regional Center Program Extended to December 11, 2020
A week following the House vote, the U.S. president finally signed the spending resolution on September 30, 2020, thereby extending the EB-5 Regional Center Program was through December 11, 2020. This extension allows the agency to skirt a shutdown (along with the rest of the government) – a shutdown that critics believe could be disastrous during this time of crisis.
For now, regional center managers and their EB-5 investors can breathe a little easier. Come December 2020, though, things could change. Investors, developers, regional center owners, and all other EB-5 Regional Center Program participants should tune in again for the latest EB-5 news to make sure they aren’t caught unprepared.