The EB-5 Immigrant Investor Program has experienced significant changes during 2021. There have been reforms of numerous legal and mechanical aspects of the program, leading to new regulations for the EB-5 investment industry. On June 22, 2021, the Modernization Rule, which had been in place since 2019, was repealed, meaning that the minimum EB5 investment threshold was lowered. This change was well received among the EB-5 community.
On the other hand, the EB-5 industry lost its most popular investment option, the regional center program, in the same month. Regrettably, a unanimous consent vote on the EB-5 Reform and Integrity Act was blocked by Senator Lindsey Graham. This act was intended to restore the regional center program.
These developments leave the future of the regional center program in suspense—the situation should not remain on hold indefinitely, as it will have a negative impact on the EB-5 industry. As of September 26, 2021, the regional center program is yet to be revalidated.
What is the Situation for Regional Center Investors?
It is now official that no more I-526 petitions from regional center investors will be accepted, as announced by United States Citizenship and Immigration Services (USCIS).
A rather alarming aspect of this regulatory change is that all petitions associated with regional centers that have already entered the system will be put on hold. This means that foreign nationals who have already made their EB-5 investment and submitted all the necessary documents will not receive their conditional residency until the regional center program is reauthorized.
For many EB-5 investors with existing regional center I-526 petitions, this policy change leaves them in an uncertain and uncomfortable position. If a solution is not found soon, billions of dollars in foreign investments are likely to be lost, as investors will lose confidence in the EB-5 investment program.
However, I-829 petitions are still being processed by USCIS. This means that foreign investors who have already had their I-526 petitions approved and completed the conditional residency period can apply for permanent resident status.
Could Reauthorization Take Place in the Short Term?
Several scenarios might lead to the reauthorization of the regional center program in the coming months. One possibility is for regional center reauthorization to be integrated into a larger body of legislation. This is likely the fastest way to revalidate regional center investments.
However, numerous stakeholders within the EB-5 investment industry are keen for more thorough reforms and improvements. Various changes have been suggested to benefit different parties, but the EB-5 industry as a whole is not united on what reforms should take place. Congress could always choose to accept these requests for reform, but achieving industry-wide compromise and consensus may take a long time.
The uncertainty brought about by this situation is putting all parties involved in the EB5 investment industry on alert. While reopening the regional center program is undoubtedly urgent, foreign nationals should note that the current regulations still allow them to make a direct EB-5 investment at only $500,000. As this minimum investment threshold is likely to be raised in the future, interested foreign nationals should consider starting the EB-5 process as soon as possible.