- Demonstrating Compliance with the EB-5 Reform and Integrity Act of 2022
- Biometrics and Background Information
- Justifying the Regional Center’s Economic Impact and Geographic Coverage Area
The result of a lawsuit filed against United States Citizenship and Immigration Services (USCIS) has established the right of existing EB-5 regional centers to retain their certification under the EB-5 Reform and Integrity Act of 2022. On August 24, 2022, USCIS reached a settlement with the plaintiffs—EB-5 trade association Invest in the USA and several regional centers—and in doing so, has withdrawn its efforts to force all existing regional centers to undergo a lengthy recertification process.
The lawsuit was originally filed on April 22, 2022, after USCIS announced on its website that existing regional centers were considered deauthorized in the wake of the recently-enacted Reform and Integrity Act. The agency had adopted a stringent interpretation of the Reform and Integrity Act, arguing that it repealed the previous EB-5 Regional Center Program and replaced it with an entirely new program, making it necessary for all regional centers to reapply for designation. However, the court proceedings made it clear that it was never the intent of Congress to force existing regional centers to cease operations; rather, regional centers were meant to make a smooth transition into the new regulations without losing their certification.
Judge Vince Chabria had already ruled in favor of this reasonable interpretation of the Reform and Integrity Act on June 24, 2022, when he approved a motion for a preliminary injunction that allowed all existing regional centers to resume operations. Judge Chabria argued that, in implementing the Reform and Integrity Act, USCIS had “kicked out all the existing members [of the regional center program], assuming that Congress forced its hand,” and concluded that “the agency was wrong to act based on that assumption … The agency must continue treating the existing members as members of the newly revamped club [the regional center program].”
What Does the USCIS Settlement Mean for Existing Regional Centers?
USCIS’s decision to withdraw opens the door for existing regional centers to continue operations unhindered by the possibility of having to recertify. Had USCIS won the lawsuit and required all regional centers to go through the recertification process, it may have been months or years before regional centers were able to resume operations and accept new EB-5 investment funding. Numerous EB5 investment projects across the United States would have lost access to a valuable funding source, and EB-5 investors from around the world would have been unable to begin the immigration process.
Fortunately, EB-5 regional center projects can now accept new EB-5 investments and I-526E petition filings from investors. Both the U.S. economy and the EB-5 program will be bolstered by funding from EB-5 visa applicants after a nearly year-long expiration of the regional center investment model.
Regional Centers Must File a Form I-956 Amendment
All existing regional centers must file Form I-956, Application for Regional Center Designation, as an amendment to retain their designation as USCIS-approved regional centers and to sponsor new EB-5 projects and investors. USCIS has set December 29, 2022, as the deadline for existing regional centers to file Form I-956. Existing regional centers that submitted Form I-956 before the USCIS settlement are not required to resubmit.
Regional centers that lose their USCIS designation will be unable to raise EB-5 investment funding. At the same time, EB-5 investors who filed their immigrant petitions before the Reform and Integrity Act was signed into law on March 15, 2022, will have their petitions adjudicated even if their regional centers do not submit an I-956 amendment.
Demonstrating Compliance with the EB-5 Reform and Integrity Act of 2022
An I-956 amendment must demonstrate the regional center’s compliance with the numerous reporting and accountability requirements introduced in the Reform and Integrity Act. To this end, regional center owners must craft a procedures and policy manual that outlines in detail how the regional center will follow EB-5 program and securities regulations.
The new policies introduced in the Reform and Integrity Act include verified annual financial reports submitted to each regional center’s EB-5 investors and records of all fees paid to migration agents. Regional centers are also required to notify USCIS of all significant changes to their sponsored projects.
Biometrics and Background Information
In Form I-956, regional center owners must “identify all natural persons involved with the regional center,” including “any person in a position of substantive authority to make operational or managerial decisions.” Regional center owners, officers, board members, and agents would all be considered as having “substantive authority.”
Moreover, each individual with substantive authority must submit a separate Form I-956H, Bona Fides of Persons Involved with Regional Center Program, with additional background information. USCIS may terminate a regional center that fails to identify any person with substantive authority, and only U.S. citizens and permanent residents can be involved with a regional center.
Justifying the Regional Center’s Economic Impact and Geographic Coverage Area
USCIS will defer to the prior approval of existing regional centers’ economic impact studies and geographic coverage areas. However, considering the substantial filing fee of $ 17,795 for Form I-956 and regional center annual fees starting at $10,000, existing regional centers filing an I-956 amendment may find it practical to expand their coverage areas to the extent possible. Doing so may save on future costs and enable regional centers to raise funding from more EB-5 projects.
In Form I-956, a regional center must demonstrate its ability to create jobs and promote economic growth throughout its targeted geographic coverage area. This section of Form I-956 must be supported by “economically and statistically valid and transparent forecasting tools.” These can include economic impact studies, job creation projections, and business plans for the regional center’s EB-5 projects.
A regional center’s business plans and job creation projections are particularly important in demonstrating its ability to promote economic growth; these documents should describe the kinds of projects the regional center will sponsor and the nature of the jobs to be created.
New Regional Center Projects Must Submit Form I-956F
New regional center-sponsored EB-5 projects must file Form I-956F, Application for Approval of an Investment in a Commercial Enterprise, before accepting EB-5 investment and I-526E petition filings. New projects will be able to raise EB-5 funding even if their I-956F petitions have not yet been approved.
Benefits of EB-5 Regional Center Funding
The EB-5 Regional Center Program is the most popular investment vehicle for EB-5 visa applicants; Invest in the USA estimates that 93.4% of all EB-5 visas have been awarded to investors in regional center projects. Investors tend to prefer regional center projects for their flexible job creation criteria and increased immigration and financial safety.
Numerous commercial enterprises across the United States have benefitted from the accessible, below-market funding raised by regional centers. In addition, EB-5 investors typically receive a lower rate of return because they place greater importance on the immigration component of their investments. In this way, regional center projects have the ability to raise inexpensive funding relatively quickly.
Prepare Your Form I-956 Amendment with EB5AN
Existing regional centers should prepare and submit their I-956 amendments as quickly as possible to ensure their continued designation. Given the high filing fee of $17,795 and significant new compliance requirements, regional center owners should prepare their I-956 amendments carefully to increase their chances of approval. Still, compiling all the necessary documentation can be time-consuming and challenging, especially given the strict regulatory environment created by the Reform and Integrity Act.
EB5AN is offering consulting services for regional centers preparing their I-956 amendments. For a one-time fixed cost, regional centers can work with one of the EB-5 industry’s leading regional center operators and consultancies to prepare their I-956 applications in just weeks.
EB5AN has created more than 100 regional centers with a USCIS approval rate of 100%, and our EB-5 projects have helped more than 2,000 EB-5 investors begin the immigration process. We closely monitor EB-5 industry trends and the latest regulations to ensure compliance with USCIS policies. In fact, we submitted an I-956 application of over 1,000 pages only one day after this new form was released by USCIS. Our goal is to help regional centers ensure compliance with the new USCIS requirements and help them prepare convincing business plans, job creation projections, and economic impact studies to maintain their designation.
For more information on how EB5AN can help you prepare Form I-956 and raise EB-5 funding from regional center projects, schedule a free meeting with our team.