20 September

Old vs. New EB-5 Immigration Program: What has changed?

The grand old investment immigration scheme of the United States called EB-5 Immigrant Investment Program has been in existence now for over three decades. The program has undergone a series of adaptive changes during these foundation years, sometimes for the benefit of the government and sometimes for the general sake of investors. However, the cardinal rule is same since the inception of the program and that is devising principles for the ultimate benefit of the U.S. economy in terms of encouraging greater influx of foreign investments to flourish local businesses, enhance infrastructure and generate mass employment for the people of U.S. The U.S. Congress has passed a legislation in the month of March, 2022 to subject the EB-5 program to systematic modifications with the primary objective of making it more monetarily lucrative for the U.S. economy and securing the interest of investors by introducing measures to safeguard their investment and immigration interest. The latest regulations were announced on March 15, 2022 under the EB-5 Reforms and Integrity Act, 2022. It is easier to understand the evolutionary trajectory of the program by drawing below a simple comparison between the old and new regulations.

Higher investment amount required: Under the new regulations, the minimum required investment amount for the EB-5 program is increased from the old set investment amount of $500,000 USD to $800,000 USD for the Targeted Employment Area projects and $1,000,000 USD to 1,050,000 USD for projects outside the TEAs.
Targeted Employment Area classification: Any rural area or an area experiencing unemployment of at least 150% of the national average rate is classified as a Targeted Employment Area (TEA). Earlier States were in a practice to designate TEAs in their jurisdiction for the respective projects. TEA certifications were issued by the States for the USCIS (United States Citizenship and Immigration Services) reference. In order to bring uniformity in this process, now USCIS is allowed to determine if a particular project falls in the TEA or not. TEA classification will be determined by USCIS and shall be valid for two years from project request filing, renewable in two-year increments. This classification will be established beforehand for the applicants’ reference which will be helpful for them in making the investment decision.
Introduction of reserve visa categories: Regulations under the new law permits 20% reservation of EB-5 visas for applicants investing in the rural area projects. In addition to this, 10% and 2% reservation of the EB-5 visas are also allocated for applicants investing in the high unemployment area projects and infrastructure projects, respectively. Any unused visas under the abovesaid categories for a particular year shall be carried forward to the following year and shall be allocated to all the investment classes.
Priority for investors in Rural areas: Distinction in the processing of the EB-5 petitions has been established on the basis of the classification of the projects. Under the new law, applications of investors in rural area projects shall be prioritized. Earlier there were only a few selective projects which were considered relevant and important from a national and state point of view and these were only eligible for fast-track processing.
Grandfathering: Latest regulations prohibit any retroactive impact on the EB-5 petitions already filed with the USCIS. The eligibility rules during the filing of the petition will remain applicable until the completion of the immigration process of the respective applicant. It preserves the eligibility of all investors who had filed the I-526 or EB-5 petition prior to the implementation of the new regulations. Also, those who are filing at present shall 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 by multiple applicants shall be affiliated with a Regional Center (RC) to qualify the investment under the EB-5 program. Earlier, 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. Now, 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 instructs a wide array of compliance requirements for the EB-5 stakeholders. The same shall be strictly complied with by such EB-5 stake holders in order to operate lawfully under the EB-5 program. Regional Centers shall file an application with USCIS before accepting the investments by the applicants. The application shall elaborate on the business plan comprehensively and shall include a range of documents like job creation pertinent economic analysis, offering documents issued to the investors which must include the assessed investment risks and any filings with the Securities and Exchange Commission or state securities regulators. Regional Centers must keep records and shall undergo USCIS audit every five years. Site visits of the Regional Center and projects by Department of Homeland Security are 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 the Regional Centers upon non-compliance with the applicable regulations. Earlier such an elaborate mechanism 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 an extent.
Quicker Entry into the US under the EB-5 Program: Another change which 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). Presently, there are two options for receiving the green card and adjusting the If the applicant is already in the U.S. on a valid visa status (dual intent visas such as H1B and L1, or tourist visas after 90+ days of continuous stays in the U.S.) then he/she may file for Adjustment of Status. This means the applicant can file papers to receive the green card while within the U.S. without having to leave. This filing also includes work authorization (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 filing fees which were charged earlier, an additional fee of $1,000 USD termed as the EB-5 Integrity fee shall also be paid by the applicant along with the filing fees during the submission of the initial I-526 petition.

Those who would like to participate in the new EB-5 Program with a set of arguably new and better protections for investors, can get in touch with the Step Global Group. As the leading EB-5 consulting firm in the UAE, Step Global Group currently has 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 to properly put a plan in place for your U.S. EB-5 journey. Under the aegis of Ms. Preeya Malik who herself is a U.S. lawyer specialised in the U.S. immigration statutory framework, we have a 100% track record of approvals and over 12+ years of experience in the EB-5 industry, making us well positioned to provide clients with the expertise necessary for success. WHY CHOOSE STEP GLOBAL?