On January 5, 2022, United States Citizenship and Immigration Services (USCIS) withdrew its appeal against the court ruling that overturned the EB-5 Modernization Rule. This decision will no doubt be well-received by the EB-5 industry, as the Modernization Rule had made several unwelcome changes to EB-5 regulations.
The June 22, 2021 court decision found that the Modernization Rule had been instituted improperly in November 2019 and that EB-5 regulations should revert to their previous status. USCIS’s appeal had been filed on August 23, 2021.
How Will This Decision Impact EB-5 Investors?
For the time being, it seems that EB-5 regulations will remain at their pre-November 2019 status. Specifically, this means that the minimum EB-5 investment amounts will remain at $500,000 for targeted employment area (TEA) projects and $900,000 for non-TEA projects; states will continue to be responsible for designating TEAs; and EB-5 investors will be unable to retain priority dates from previous visa filings.
Investors who have filed their I-526 petitions at $500,000 can be especially pleased with USCIS’s decision; this guarantees that the agency will continue to accept EB-5 investments made at the lower minimum amount. Moreover, the direct EB5 investment industry will be able to continue accepting investments of only $500,000, making the EB-5 visa more accessible to foreign nationals (under the Modernization Rule, the minimum amount was $900,000).
At the same time, it remains unclear if or when the U.S. government will reauthorize the regional center program, which had been the most popular EB-5 investment option. USCIS is no longer adjudicating I-526 petitions from regional center investors, leaving many visa applicants in processing limbo.
Analysts predict that, at the earliest, regional center investment could be revalidated as part of a February 2022 appropriations bill, but this view is only conjectural. Potentially, any reform made to the EB-5 investment industry in this bill could also raise the minimum thresholds and bring back other Modernization Rule regulations. Therefore, foreign nationals interested in the EB-5 visa should invest in a direct EB-5 project as soon as possible.