Recent Changes in EB-5 Program and Why You Need to Know

EB-5 Immigrant Investor Program was created in 1990 to allow foreign investors to obtain their permanent residency in the U.S. Every year since the creation of the program, the government gives a considerable number of visas to qualified individuals who wants to make a significant investment in the country that can help generate jobs and will benefit the country’s economy.

Enhancement of the Program in 1992

In 1992, the program was enhanced by establishing Regional Centers Program. This was an additional way for foreign investors to obtain an EB-5 visa. This enhancement allows foreign investors to pool their investments to fund their projects within a specific geographic region. A great number of EB-5 visas were issued through the Regional Center Program enhancing the program a success.

EB-5 Reform and Integrity Act of 2022

On March 15, 2022, President Joe Biden signed the Omnibus Spending Bill. This law includes the reauthorization of the EB-5 Regional Center Program until September 30, 2027. The bill aims to address the issues regarding its ineffectiveness and prevent fraud. It also includes reforms toward regional centers –one of which is their requirement to be audited at least once every five years by the United States Citizenship and Immigration Services (USCIS).

Key Changes in the New Law

• Increase in the minimum amount of investment. Under the new law, the minimum amount required to invest was raised from $1,000,000 to $1,050,000 except for the Targeted Employment Areas which have a minimum requirement of $800,000.
• Revision of investment amount every five years. In the old law, the investment amount was unchanged but in this new law, investment amounts will be revised every five years.
• Requirements for investors. Investors need to prove that their capital investments were from lawful means though borrowed funds are still allowed.
• Reservations of visa. Under the new law, there will be a certain number of EB-5 visas reserved for different types of investments. 20% are reserved for investments in rural areas, 10% are for investments in high employment areas, and 2% are for infrastructure projects.
• Priority for rural investors. There will be a priority for investors in rural areas that will make the processing faster.
• Protection for investors. This includes annual reports, a notice of change in materials, certification of compliance and securities, and disclosure of marketing and promotional expenses.
• Redeployment of investors. If the project was completed even before the application was processed or if the regional center was terminated, the money invested may be redeployed anywhere in the United States and can still be qualified under EB-5.
• New fees for regional centers. There will be an annual fee of $20,000 or $10,000 if the number of investors they had the prior year is less than 20.
• Review of USCIS. If an application is denied, USCIS can provide an administrative appeal of the determination.
• Designation of TEAs. The new law allows the Secretary of The Department of Homeland Security to decide what constitutes Targeted Employment Area (TEA).

With the new regulations made in the existing law, it is expected that the issues of fraud and abuse will be resolved as well as protecting immigrant investors. Implementation of the new changes is expected to bring in more foreign investors to come to the United States and receive their green cards.

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