The EB-5 Immigrant Investor Program has been operating continuously since 1990, and thousands of foreign nationals now enjoy U.S. Green Cards as a result. In contrast, the regional center investment model, which allows for more relaxed EB-5 job creation criteria, depends on periodic reauthorization. As the regional center program has for many years been the cornerstone of the EB-5 investment industry, its reauthorization is crucial to many business owners across the United States and to foreign investors.
Even though it had never been suspended for an extended period, the regional center program entered a months-long expiration starting in June 2021. The lapse was detrimental to the United States’ immigration and economic development. It came as a relief when a bipartisan agreement on EB-5 policies was finally reached in early 2022, and President Biden reauthorized the regional center program as part of a wider omnibus appropriations package.
The Importance of the Regional Center EB-5 Industry
Invest in the USA, a major trade association for the EB-5 industry, published a report in August 2021 that demonstrated the importance of the regional center program and the urgency of reauthorization. The study found that up to $15 billion in EB-5 investment capital might have been lost if regional center investors whose I-526 petitions were pending had received USCIS denials. Moreover, approximately 486,900 jobs for U.S. employees were in jeopardy. From an immigration standpoint, 32,600 foreign nationals who had invested in a regional center-sponsored project would have been unable to apply for Green Cards even though their funds were already committed.
If the above scenario had taken place, regional centers and their sponsored projects might also have been the target of serious litigation; understandably, disgruntled investors may have tried to get their EB-5 investment capital back. The image of the EB-5 visa as a transparent and relatively low-risk immigration option would have been tarnished.
Now, however, the most popular EB5 investment option has returned. Investors can once again benefit from the flexible job creation criteria that regional center projects enjoy—they can count indirect and induced job creation as well as standard W-2 positions.
What Will Regional Center Projects Look Like Under the New Rules?
To the great benefit of the EB-5 industry, Congress included a bill reauthorizing regional center investment and introducing new integrity measures in the recent appropriations bill. By far, the most important provision made by the EB-5 Reform and Integrity Act is to reauthorize the regional center program through September 30, 2027. However, only investors who file their I-526 petitions on or before September 30, 2026, are guaranteed to have their applications processed.
USCIS will now oversee regional centers more closely. These entities will be required to submit annual reports to their investors outlining their activities, and each regional center project will need to submit a request to USCIS before its investors can submit Form I-526. These new requirements will likely do much to root out poorly structured, suspicious, and even fraudulent regional center projects.
All EB-5 projects, either direct or regional center-sponsored, will also have to hire a third-party fund administrator or obtain audited financial statements from a certified public accountant (CPA). Investors can have more peace of mind knowing that their funds are being handled responsibly.
It is important to note that the regional center program will only be able to resume operations beginning in mid-May 2022, which gives regional center administrators time to make the necessary changes in compliance with the Reform and Integrity Act. In all likelihood, the regional center investment model will come to be regarded as an even safer and more desirable immigration option.