Overview of the Revisions Made to the EB5 Program06 Apr 2022
The employment-based, fifth preference (EB5) immigrant investor program was established to help stimulate the U.S. economy though job creation and capital investment by foreign investors. Under this program, a foreign national investor is eligible to apply for permanent residency if the person invests the requisite amount in a new commercial enterprise in the United States that creates at least 10 full-time jobs for U.S. workers.
The fiscal year 2022 spending bill signed into law by President Biden on March 15, 2022, includes a provision to reauthorize the regional center portion of the EB5 program. This new law also implements a number of significant changes to the EB5 program. A summary of some of the major changes to the EB5 program are provided here for the benefit of MurthyDotCom readers.
Regional Center Program Reauthorized
Ordinarily, to meet the EB5 program’s job creation requirement, the commercial enterprise must directly hire at least ten U.S. workers. However, indirect jobs can also be used to satisfy the job creation requirement if the investment is made in a regional center. The regional center portion of the EB5 program had expired in the summer of 2021. With the passage of this recent law, the program will be reauthorized effective May 15, 2022, and continue until at least September 30, 2027.
In passing this law, Congress has also added protections for future regional center investors, in case Congress fails to reauthorize the program before the September 30, 2027, expiration date. The statute provides that, if a foreign national files an I-526 petition by September 30, 2026, based on an investment in a regional center, and then the regional center program expires, the USCIS is obligated to continue processing the case based on the law that existed at the time the I-526 was filed.
There are several other changes made to the regional center program, which should improve transparency within, and oversight of, regional centers. The law also prevents foreign nationals from pooling EB5 investments into a single commercial enterprise other than investments made in regional centers.
Increase in Minimum Investment Requirements
The minimum investment requirement under the EB5 program has been increased to $1,050,000. If, however, the investment is made in an infrastructure project or a targeted employment area (TEA), the investment requirement is reduced to $800,000. An infrastructure project is a project that is administered by a federal, state, or local agency, and must meet certain other requirements. A TEA is an area of high unemployment or a rural area. Under the new law, only the U.S. Department of Homeland Security (DHS) is authorized to determine whether a location meets the requirements to qualify as an area of high unemployment.
“Grandfather” Clause Protections
The law clarifies that the changes to the EB5 program largely do not apply to any EB5 investor who filed an immigrant petition by alien entrepreneur (form I-526) prior to March 15, 2022. Accordingly, the increased investment requirements and changes in how TEAs are designated will not impact cases filed prior to these changes in the law.
Concurrent I-485 Adjustment of Status Filings Permissible
The new law allows an EB5 investor who is in the U.S. in valid status to file an adjustment of status application (form I-485) while the I-526 is still pending if the priority date is current. The law also makes EB5 investors eligible for forgiveness of up to 180 days of status violations when filing the I-485 application, pursuant to INA section 245(k). More details on these protections are available in the MurthyDotCom NewsBrief, Green Card Possible After Status Violation: 245(k) Benefit (28.Mar.2022).
Relief from Long Processing Times
For many years, the EB5 program has been plagued by extremely long USCIS processing times of these petitions. Congress aims to address this by requiring the USCIS to study the problem and set filing fees for EB5 petitions at a level where the USCIS will be able to hire enough staff to adjudicate these cases within a reasonable timeframe.
As of the time of this writing, the USCIS had not yet published updated guidance on how the various changes in the law will be implemented. MurthyDotCom will provide additional information when the USCIS releases more detail.
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