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For the EB-5 visa program, the latter half of 2021 ushered in a period of instability that is the first of its kind since the inception of the program in 1990. Since the hiatus of the regional center program, members of the EB-5 industry have had to adjust to numerous legislative changes and policy revisions. It is in the best interests of both existing industry members and prospective participants of the EB-5 visa program to keep up to date with the latest changes that have taken place so they can be prepared for any similar occurrences in the future.
Two Critical Modifications to EB-5 Rules
The EB-5 Modernization Rule was deauthorized. The Modernization Rule, which came into effect in 2019, was a previous unwelcome modification of EB-5 policies that raised the minimum EB-5 investment amount from $500,00 to $900,000. However, a federal district court ruled that the Modernization Rule was implemented improperly, making the minimum EB-5 investment amount $500,000 once more.
Unfortunately, the dismantling of the Modernization Rule came only a few days before the regional center program expired in June 2021. Since then, industry members have faced troubles and inconveniences related to the program’s suspension. A spending bill due in December 2021 was delayed until March 11, 2022; this bill had supplied hope that EB-5 reform would come to pass and that the regional center program would be reinstated. Many have criticized the prolonged delay on the part of the government, whose inaction has jeopardized roughly $15 billion worth of EB-5 funding.
The expiration of the program has been hardest on those foreign nationals who had previously invested in regional center-sponsored projects. There was further discontent when United States Citizenship and Immigration Services (USCIS) decided to cease to process of pending I-526 petitions from regional center investors. These investors had no way of moving forward despite careful adherence to EB-5 policies and regulations; there was no assurance that they will be able to continue with their EB-5 visas. On a larger scale, this situation could potentially dissuade other foreign nationals from becoming participants and be greatly detrimental to the program’s overall image.
The Return of the Regional Center Program
Fortunately, EB-5 reform was included in the 2022 omnibus appropriations package that President Biden signed into law on March 15. As a result, the regional center program will finally resume operations in mid-May 2022.
Despite the many difficulties caused by the suspension of the regional center program, the EB-5 visa process has continued to operate successfully due to the option of direct EB-5 investment. The direct EB-5 model offers its own unique benefits and allows all investors to begin the EB5 investment process regardless of the regional center program’s authorization. With the reauthorization of regional center investment, the future of the EB-5 industry remains positive and will surely continue to appeal to foreign nationals and bring significant capital to the U.S. economy.
