DHS WITHDRAWS APPEAL OF BEHRING REGIONAL CENTER LLC V. ALEJANDRO N. MAYORKAS, ET AL. & ENACTMENT OF THE EB-5 REFORM & INTEGRITY ACT of 2022: HOW WILL THESE DEVELOPMENTS IMPACT EB-5 VISA APPLICANTS?

What is the EB-5 Visa Classification?

USCIS oversees the EB-5 Immigrant Investor Program, which was created by Congress in 1990 to help stimulate the United States economy by granting immigrant visas to foreign nationals who either start new commercial enterprises, or invest in existing businesses in the U.S. In order to qualify, investments must be made in any for-profit activities formed for the ongoing conduct of a lawful business. The new commercial enterprise must directly create full-time positions for at least ten (10) qualifying employees. Qualifying employees can be U.S. citizens, lawful permanent residents, or other immigrants authorized to work in the United States. Full-time employees must work a minimum of 35 hours per week. These jobs must be considered permanent full-time jobs. This can include jobs that are expected to last at least two (2) years.

The EB-5 investor can either invest on their own, or they can participate in regional center programs and invest with other EB-5 investors in various designated projects.

Under the current program, the Minimum Capital Investment amount is $1,000,000.00 in High Employment Areas and in all other areas, excluding Targeted Employment Area (TEA). When investing in TEA, the required investment amount is reduced to $500,000.00 to stimulate the economy in a rural area or an area experiencing high unemployment at least 150% of the national average.

Brief Overview of the Latest Developments to the EB-5 Investor Program

On January 5, 2022, the Department of Justice (DOJ) filed an unopposed motion to dismiss DHS’ appeal of Behring Regional Center LLC v. Alejandro N. Mayorkas, et al., putting an end to the USCIS’s plans to revise the EB-5 Immigrant Investor Program by raising the minimum investment amount for TEA investment to $900,000.00 and $1.8 million for non-TEA investments.

Earlier, in August 2021, DHS had timely appealed the U.S. District Court for the Northern District of California’s decision to vacate the November 2019 EB-5 Immigrant Investor Program Modernization Final Rule, which had raised uncertainty among immigrant investors as to whether DHS was still going to raise those investment amounts, even after the District Court had vacated those rules on June 22, 2021.

By dropping the appeal on Behring Regional Center LLC v. Alejandro N. Mayorkas, et al, it ensures that pre- November 2019 EB-5 regulations remain in effect. Therefore, the Minimum Investment Amount and the High-Employment Area Investment Amount remain at $1,000,000.00 and the TEA Investment Amount remain at $500,000.00 for now.

However, in the latest development, the EB-5 Regional Center Program has been re-authorized as part of the new EB-5 Reform and Integrity Act of 2022 (“RIA”). On March 15, 2022, President Biden signed into law the Consolidated Appropriations Act 2022, which includes the EB-5 Reform and Integrity Act of 2022. As a result, there are key changes and updates to the EB-5 program impacting both Direct and Regional Center investments. However, there remains some confusion as to when certain provisions of the RIA would take effect. Some provisions would take effect upon enactment, but some other provision take effect 60 days after that date.

As of the writing of this blog post, USCIS has only issued a general statement announcing that it is still in the process of reviewing the new legislation and it will provide additional guidance at a later date. So, we recommend reader to check back with us regularly for any updates from the USCIS.

What does this mean to the future of the EB-5 investor program?

For now, the EB-5 direct investors who filed their Form I-526 Immigrant Petition by Alien Entrepreneur either before June 30, 2021 or after June 30, 2021, all those petitions will now be adjudicated under the pre-November 2019 EB-5 regulations. This includes petitions that qualify under the TEA certification rules, including TEA letters issued by local and state agencies, and petitions that qualify with the $500,000.00 minimum investment amount.

However, despite the significance of this key court ruling that keeps the minimum investment amount and high-employment area investment amount at pre-November 2-19 EB-5 regulations levels, the enactment of the EB-5 Reform and Integrity Act of 2022 on March 15, 2022 brings forth key changes to the EB-5 investor program that will impact both the EB-5 Regional Center Program, as well as to the EB-5 Direct Investors.

Some of these changes are listed below:
1. The EB-5 Regional Center program will be reauthorized through September 30, 2027.
  - o If Congress does not reauthorize the Regional Center program beyond September 20, 2027, then the USCIS may continue to process cases received on or before September 30, 2026;
2. The legislation includes ‘grandfathering’ for all investors who have an I-526 on file, or who file or have filed their I-526 petitions prior to September 30, 2026. Those investors will be able to complete the EB-5 process, even if the regional center program were to lapse again.
3. The investment amounts for EB-5 investor program will increase as follows:
  - $800,000.00 for a targeted employment area (TEA) investment, and
  - $1,050,000.00 for a non-TEA investment,
4. Starting in 2027, the minimum investment amounts will be automatically adjusted for inflation every fifth year starting on January 1, 2027 for the higher dollar amount, and the lower amount will be calculated at 75% of the higher amount.
5. These new dollar amounts are supposed to become effective immediately upon the enactment of the law on March 15, 2022 and it would also affect “direct” non-Regional Center investments.
  
  But note that the EB-5 Regional Center program will not be officially reauthorized for 60 days. And during that time, regional centers and regional center investors will not be able to file new petitions with the USCIS.
  
  And as of the writing of this blog post in April 2022, the USCIS also has not formally announced when EB-5 investors – including direct investors - should start to follow the new investment amounts. So, for now, it is presumed that EB-5 applicants should still rely on the current investment amounts for TEA ($500,000.00), and non-TEA ($1,000,000.00). This fluid situation requires close monitoring for any new announcement by USCIS in the coming days.
6. TEAs will be re-defined in three ways (with new special visa set asides for these types of projects):
  - rural area;
  - distressed urban area project; and
  - infrastructure projects;
7. Only Department of Homeland Security can designate a TEA, which will be valid for 2 years. This means the individual states will not be designating TEAs.
8. Job creation via an economic model will change, with new requirements for “direct” jobs;
9. Concurrent filing of Form I-485 will become available for all EB-5 investor applicants who are presently in the U.S., and who have pending and approved I-526 petitions, while also providing 245(k) protections to them.
10. Establishes new reporting and disclosure requirements by RCs to both USCIS and sponsored investors.
11. Requires promoters and overseas agents to register with USCIS and report fees collected from RCs and sponsored investors. ;
12. Requires Regional Centers to pay an annual “EB-5 Integrity Fund” fee to be used by USCIS to fund investigations and site visits of regional center operators, new commercial enterprises (NCEs) and job creating entities (JCEs).

Call to Action

USCIS is still in the process of preparing guidelines on how to implement the changes to the EB-5 immigrant investor program. And in the short run, the lack of guidance and materials to these changes, some of which are quite significant, would mean confusion for investors on their eligibilities and adjudication uncertainties from the USCIS’s side. We advise readers to keep an eye out for any such developments in the coming days and visit our site regularly for updates. Should you have questions about the EB-5 immigrant investor visa program, or if you have specific questions about your case matter, we encourage you to contact our office and schedule a formal consultation so we can assist you further.