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Since its creation in 1990, the EB-5 Immigrant Investor Program has helped thousands of foreign nationals permanently immigrate to the United States. The program allows foreign nationals to receive a U.S. green card in exchange for a qualifying investment in an EB-5 project. Two years after the EB-5 program was created, the EB-5 Regional Center Program was authorized and has since become the most popular route for foreign nationals to complete an EB-5 investment.
Investing through an EB-5 regional center is popular because of the many advantages that it offers to the investor. When investing through a regional center, an investor gets to work with experienced EB-5 professionals who boast experience running new commercial enterprises (NCEs) and navigating the EB-5 process. This additional experience and security is especially appealing to foreign nationals who lack business experience. Additionally, if an EB-5 investor chooses to invest through a regional center, they are not required to be involved in the day-to-day managerial tasks of the NCE, which frees the investor up to live somewhere that the NCE isn’t located. Regional center investments also allow for relaxed job creation requirements, allowing the investor to count indirect and induced jobs toward the requirement.
Although the regional center program is popular among EB-5 investors, the program is not permanent. Therefore, those who choose to invest through an EB-5 regional center run the risk of the EB-5 Regional Center Program being terminated, putting their EB-5 investment in jeopardy.
The History of EB-5 Regional Center Program Reauthorizations
The EB-5 Regional Center Program brings billions of dollars of foreign capital into new U.S. businesses, helping to boost the economy and create new jobs for U.S. workers. With the success that the program is having, it is unlikely that it will be terminated anytime soon. However, it is important that anyone involved with a regional center EB5 investment be aware of the possibility that the program could suddenly end.
When the EB-5 Regional Center Program was created in 1992, it was authorized for five years. The program was then continuously reauthorized by Congress every few years. In 2015, the program began being authorized for shorter and shorter time periods, often just a few months at a time. This was a result of the regional center program getting bundled in with other immigration programs in government funding bills, condemning the successful regional center program to a bumpier reauthorization process.
Generally, since 2015, the program has been reauthorized for short periods or until the upcoming September 30, the date that ends the fiscal year. In December 2020, the program was reauthorized again, extending the program until June 30, 2021. Because this expiration date is separate from the other programs in the appropriations bill, it is possible that Congress will begin evaluating the regional center program on its own, which could result in the program being authorized for a longer time frame. However, the EB-5 industry will have to wait and see how Congress chooses to handle the reauthorization of the program.
What If the EB-5 Regional Center Program is Terminated?
With the reauthorizations of the regional center program remaining unpredictable and somewhat irregular, many investors are questioning what would happen if the program were suddenly terminated. This question was asked in a stakeholder meeting in January 2012, to which United States Citizenship and Immigration Services (USCIS) provided a disappointing answer, stating that they did not have a response at the time. Then, in May 2012, the question was posed again, and USCIS answered that in the case of the program’s termination, all regional centers would be terminated, all regional center designations would expire, and USCIS would no longer issue any new regional center designations.
While this lack of a well-thought-out plan may seem frightening, it can also be viewed as a positive. The fact that there is not any clear policy regarding the termination of the EB-5 Regional Center Program suggests that Congress does not have any plans to terminate the program. If the program did end abruptly, thousands of EB-5 investments would be ruined, resulting in numerous lawsuits from exasperated foreign nationals involved with a regional center EB5 investment.
IIUSA to Host Webinar
Invest in the USA (IIUSA), an industry trade association, will be holding a free webinar on February 3, 2021. The webinar will address how government affairs might affect the EB-5 program, updates to legislation, and the proposed EB-5 reform bill. Those interested in attending the webinar can also email questions in advance to info@iiusa.org. The event will also discuss the EB-5 Regional Center Program that is set to expire on June 30, 2021.
