The EB-5 visa can be a valuable opportunity for foreign nationals to obtain permanent resident status. However, with many opportunities come caveats of a time-consuming and difficult nature, and this program is no different.
For example, the first application in the EB-5 process, the I-526 petition, can take a long time to be adjudicated. Another critical aspect of the program and a major contributor to its popularity is the now-defunct regional center program. Since June 30, 2021, the suspension of the program has left many investors floundering, and many of the filed I-526 petitions now have no way of being approved.
Before the expiration of the regional center program, investors rushed to file their I-526 petitions before what most had anticipated to be a brief suspension. However, with Congress having failed to reauthorize the program in December, possible reinstatement has been officially pushed back to February 18, 2022—at the earliest. What are the ramifications of this prolonged delay?
The Effect on EB-5 Projects
With the suspension of the program dragging on, there’s a likelihood that regional center investors will attempt to get back their capital. Another less likely scenario is that those with pending I-526 petitions after the June 30 suspension will have their applications denied. This situation could lead to legal action against EB-5 projects. In terms of the bigger picture, continued uncertainty could diminish the trust investors put in the EB-5 investment program and tarnish its overall reputation.
Which Way Forward?
Will the regional center program ever be reauthorized? Congress’s revalidation of the program would be the most straightforward solution to the aforementioned issues, but because the U.S. government has frequently been unable to reach a consensus on policymaking for the EB-5 program, it is unclear when regional center investment will be reauthorized.
With the program’s future out of their hands, many foreign nationals have been seeking alternative methods to have their I-526 petitions adjudicated and proceed with their EB-5 investments regardless of the legislative state of the regional center program. There remains some tentative hope on this front: in December 2021, United States Citizenship and Immigration Services (USCIS) released a statement assuring investors that they were actively reassessing their policy of not processing petitions affiliated with regional centers.
However, USCIS’s decision on that front is still pending. For foreign nationals still interested in the EB5 investment program, it is imperative to recognize that the regional center program is only one option. Another viable option for them is direct investment, which differs from the other EB-5 investment model primarily in its calculation of job creation.
Investors should be aware that direct investments must create at least 10 jobs towards satisfying the employment creation requirement. Logistically, these directly created jobs are usually operational duties that involve the day-to-day maintenance of the business. Additionally, the investor themself would be expected to contribute to the running of their project.
In the past, investors have enjoyed a certain amount of flexibility in terms of job creation criteria when investing through the regional center program. Unfortunately, the program’s current disuse can make it seem like a less reliable option. In contrast, the direct EB-5 investment method boasts a number of benefits and, more importantly, can always be counted on as its legitimacy is not contingent on legislative approval.