U.S. EB-5 Immigration Program: What has changed in 2022?

The grand old investment immigration scheme of the United States, known as the EB-5 Immigrant by Investment Program, has been in existence for over three decades. Throughout its history, the EB-5 immigration visa program has undergone a series of adaptive updates and changes, sometimes benefiting the government and sometimes for the general sake of investors. However, the cardinal rule has been the same since the inception of the program: devising principles for the ultimate benefit of the U.S. economy by encouraging a greater influx of foreign investments to local businesses, enhancing infrastructure, and generating mass employment for the people of the US.

The latest news regulations were announced on March 15, 2022, under the EB-5 Immigration Program Reforms and Integrity Act (RIA) as part of the Consolidated Appropriations Act. This legislation introduces a significant update to the EB 5 Immigrant Investor Program.

To help you understand the evolutionary trajectory of the EB-5 program, I have outlined the main changes between the old and new regulations in this article.

What does the EB-5 Program Updates as a Result of the EB-5 Reform and Integrity Act of 2022?

The EB-5 Reform and Integrity Act of 2022 (“RIA”) allows for further deployment of capital anywhere in the United States or its territories. Therefore, including for petitions filed pre-enactment, further deployment is not required within the same regional center or any regional center’s geographic area. Below, you can learn about the impact of the new EB-5 Visa Rule.

Increase in Minimum Investment Required

Under the EB-5 Reform and Integrity Act new regulations, the minimum investment amount for the U.S. EB-5 Visa program has increased from $500,000 USD to $800,000 USD for the targeted employment area projects and from $1,000,000 USD to 1,050,000 USD for projects outside the TEAs.

Targeted Employment Area (TEA) Classification

Any rural area or an area experiencing an unemployment rate of at least 150% above the national average is classified as a targeted employment area. Previously, individual states were responsible for designating TEAs in their jurisdiction for the respective projects. These TEA certifications were then provided to the United States Citizenship and Immigration Services (USCIS) for reference. To encourage uniformity, USCIS now determines if a particular project falls under the TEA or not. TEA classifications are determined by USCIS and are valid for two years from the project request filing, renewable in two-year increments. This classification will be established beforehand for the applicants’ reference, which is helpful for them in making the investment decision.

Introduction of Reserved Visa Categories

Each year, 10,000 visas are issued under the EB-5 Immigration Program. Regulations under the new law permit 20% reservation of U.S. EB-5 visas for applicants investing in rural area projects. In addition, 10% and 2% reservation of the U.S. EB-5 visas are also allocated for applicants investing in the high unemployment area projects and infrastructure projects respectively. Any unused visas that fall under the aforementioned categories for a particular year can be carried forward to the following year and allocated to all of the investment classes.

Priority for Investors in Rural Areas

Distinction in the processing of the U.S. EB-5 Visa petitions has been established based on the classification of the projects. Under the new law, applications from investors in rural area projects are prioritized. Previously, there were a few selective projects that were considered relevant and important from a national and state point of view; only these were eligible for fast-track processing through a national expedite. Now, rural projects will also receive priority processing, to encourage the flow of capital into rural areas of the country.

EB-5 Investor Grandfathering

The latest EB-5 regulations prohibit any retroactive impact on the EB-5 visa petitions already filed with the USCIS. The eligibility rules in place during the filing of the petition will remain applicable until the completion of the immigration process of the respective applicant, preserving the eligibility of all investors who had filed the I-526 or EB-5 petition before the implementation of the new regulations. This also means that those who are filing at present will not be impacted by any regulation changes in the future.

Regional Center Affiliation Mandatory for Pooled Investments

Post-enactment of the new law, any project or business that invites investment from multiple applicants must be affiliated with an EB-5 Regional Center (RC) to qualify for the investment under the EB-5 visa  program. Previously, pooled investments were also allowed under the direct category of the EB-5 program where multiple applicants were able to directly invest in a common business. Under the new regulations, simple direct pooled investments will no longer qualify under the EB-5 program. Likewise, a single investor will not be able to benefit from indirect job creation, even if the business is affiliated with an RC.

Greater Protection for Investors’ Interests

The new law contains a wide array of compliance requirements for the EB-5 stakeholders. These requirements must be strictly complied with by EB-5 stakeholders to operate lawfully under the U.S. EB-5 Immigration Program. Regional Centers must apply with USCIS before accepting funds from foreign investors. The applications need to elaborate on the business plan comprehensively and include a range of documents, such as job creation economic analysis, and offering documents that will be issued to the investors (including the assessed investment risks and any filings with the Securities and Exchange Commission or state securities regulators). Regional Centers must keep records and will undergo USCIS audits every five years. Site visits of the Regional Center and projects by the Department of Homeland Security are also instructed under the new regulations. Regional Centers are additionally required to submit detailed annual statements that include certifications of compliance with laws, accounting details of the accumulated investor capital, ongoing litigations, etc. Punitive measures are in place to penalize Regional Centers upon non-compliance with the applicable regulations. Previously, such elaborate legislation was not in place to safeguard the investors and thus, the EB-5 program was associated with a greater risk element which is now mitigated to a much greater extent.

Quicker Entry into the US under the EB-5 Visa Program

Another change that has come into effect is the allowance for concurrent filing of the I-485 Adjustment of Status application during the pendency of the I-526 conditional green card application (EB-5 Application). At present, there are two options for receiving the U.S. green card and adjusting status if the applicant is already in the U.S. on a valid visa status (dual intent visas such as H1B and L1, or non-immigrant visas after 90+ days of continuous stays in the U.S.). This means the applicant can file papers to receive the green card from within the U.S. without having to leave. This filing also includes an employment authorization document (EAD) and a travel document (Advance Parole), which will authorize the applicant to work anywhere in the U.S. and travel in and out of the U.S. upon approval.

Introduction of an Additional Fee for The Applicants

In addition to the government filing fees that were charged earlier, an additional fee of $1,000 USD (termed as the ‘EB-5 Integrity fee’), will also be paid by the applicant along with the other USCIS filing fees during the submission of the initial I-526 petition. 

Will This EB-5 Change Become Permanent?

These EB-5 changes look to be permanent, however, as with all immigration programs, they are subject to change at any given time. As it stands, the EB-5 Visa is one of the most reliable visa programs if you want to live and work in the United States as a resident.

Immigration Consultancy in Dubai

If you would like to participate in the new EB-5 Program with a set of new and improved protection regulations for investors, please get in touch with me any time. As the leading EB-5 consulting and immigration advisory firm in the UAE, we currently have projects available in all categories to suit each and every individual investor. Our vast legal and EB-5 network allows us to provide not only expert service but also exclusive projects, including those where we have successfully received approvals on expedited processing requests for many clients. 

Our lawyers are happy to sit down with you and put a plan in place for your unique U.S. EB-5 journey. Under the aegis of myself (a U.S. lawyer who has specialised in the U.S. immigration statutory framework), we have a 100% track record of approvals and over 13 years of experience in the EB-5 industry, making us well-positioned to provide clients with the expertise necessary for success.

If you’re interested in the EB-5 program or would like to have a more general chat around the new U.S. EB-5 Immigration Program regulations, please get in touch with me at preeya@stepglobalgroup.com.

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