An Overview of the New EB-5 Integrity Fund

What is the EB-5 Integrity Fund?

On March 15th, 2022, President Biden signed into law the EB-5 Reform and Integrity Act (RIA) of 2022. Among the major updates introduced was the EB-5 Integrity Fund. This Fund is to be used by the Department of Homeland Security (DHS) for the following purposes:

• Ensuring EB-5 investment capital is obtained from a lawful source via lawful means;
• Detecting and investigating fraud and other criminal activity;
• Determining whether EB-5 regional centers, new commercial enterprises (NCEs), job-creating entities (JCEs), and EB-5 investors comply with U.S. immigration laws;
• Conducting audits and site visits.

The Integrity Fund may also be used for other purposes as the DHS deems necessary. In essence, the Fund serves to combat fraudulent activity within the EB-5 program and ensure that all involved entities, from regional centers to foreign investors, comply with U.S. law.

The EB-5 Integrity Fund Fee

The RIA stipulates that the Fund is to be financed through the collection of an annual fee paid by EB-5 regional centers. This fee depends on how many investors a regional center has had in its NCEs within the preceding fiscal year. The standard amount is set to $20,000, while regional centers with fewer than 20 investors during the previous year pay a reduced fee of $10,000.

For FY2024 and each year thereafter, the Integrity Fund annual fee must be paid between October 1st and October 31st of the same year.

Regional center investors are also affected by the Integrity Fund. The filing fee for Form I-526E, which is filed by EB-5 regional center investors, has been raised by $1,000 to incorporate the Integrity Fund fees, meaning it now costs $4,675 to file this petition.

How Does the EB-5 Integrity Fund Affect Previously Approved Regional Centers?

When the RIA was first enacted, USCIS announced that all existing regional centers were considered deauthorized, making it necessary for all regional centers to reapply for designation via Form I-956. Following this announcement, several EB-5 regional centers and Invest in the USA (IIUSA) filed a lawsuit against USCIS for this decision.

On August 24th, 2022, USCIS reached a settlement with the plaintiffs and rescinded its decision to deauthorize previously approved regional centers. Instead, regional centers were simply required to file Form I-956 by December 29th, 2022 to retain authorization.

This decision allowed regional centers to continue operations and smoothly transition to new regulations without losing their certifications.

In October 2022 USCIS stated that it “…has not determined what will happen to regional centers that choose not to file Form I-956” and “whether any of the RIA requirements apply to them”.

However, with the release of the latest Integrity Fund fee policy, the policy assumes the new requirements apply to regional centers designated under the RIA and those that have not.

Who Qualifies as an Investor Under the Fee Policy?

As mentioned earlier, EB-5 regional centers must pay a different annual Integrity Fund fee depending on the number of investors in its NCEs during the previous fiscal year. Naturally, this gave rise to the question of who counts as an investor for the purposes of fee calculation.

Generally speaking, USCIS adjudicators evaluate how many investors a regional center has in a given fiscal year on a case-by-case basis. This is done with the understanding that the number of investors for purposes of fee calculation is the total number of investors who have invested (or are actively in the process of investing) in the regional center’s NCEs in the respective fiscal year.

Furthermore, USCIS generally considers an individual to be an investor from the point of filing an I-526/I-526E petition through the point of filing Form I-829.

As such, USCIS may intend to calculate the number of total investors in a regional center in any given fiscal year by subtracting the number of I-829 forms filed on or before September 30th of that fiscal year (including filings from prior fiscal years) from the total number of pending and approved I-526/I-526E forms filed on or before September 30th of that fiscal year (including filings from prior fiscal years).

It is important to note that I-829 petitions filed by an investor’s eligible family members are typically excluded from this calculation.

The above method is intended to be a general guide for USCIS adjudicators. USCIS adjudicators retain discretion to evaluate the owed Integrity Fund fee and the number of investors on a case-by-case basis. They must account for any additional facts or evidence during this process, including evidence put forth by a regional center that believes it has greater or fewer total investors.

Stay Up-To-Date with EB5AN

With many new regulations under the RIA, EB-5 industry members—investors, attorneys, regional centers, and promoters—must stay up-to-date with the latest USCIS policies.

As one of the leading information centers for the EB-5 industry, EB5AN’s website contains numerous various resources on the EB-5 industry. To learn more about any of the new rules under the RIA, schedule a free consultation today.