April 15, 2022

The EB-5 Reform and Integrity Act (enacted March 15, 2022) both revives and narrows the Immigrant Investor visa category. This is a brief summary of some of its key highlights, and some of the blank spaces and open questions.

First, effective dates: this Act allows direct investment cases to be filed immediately as of enactment, and reauthorizes the Regional Center program as of 60 days later – but May 14 is a Saturday, so new Regional Center cases actually cannot be filed until Monday, May 16, 2022. Regional Center cases are nominally authorized through September 30, 2027, but it says that USCIS will continue to adjudicate petitions and allocate visas for any RC filings through September 30, 2026 – so it’s already unclear when it ends. An exemplar will be required from the Regional Center prior to filing any new I-526 Immigrant Petition for Alien Entrepreneur.

New investment thresholds: The new minimum investment in a Target Employment Area or an infrastructure project is $800,000; the new minimum investment for all other EB-5 case types is $1,050,000. Minimum investment amounts will go up every five years, to adjust for inflation.

“Pooled direct investments” are no longer allowed: all investments by two or more EB-5 investors must be in a Regional Center, even if they are actively co-managing the new enterprise.

Burdens have ramped up: All Regional Centers will be audited by USCIS at least every five years. Any amendments to RC project plans or administration must be filed 120 days ahead of changes being implemented. In addition to petition and application filing fees, all Regional Centers must pay an annual fee of $20,000 into an “integrity fund” for the EB-5 program (reduced to $10k if the RC has fewer than 20 investors per year), and each individual RC investor must also pay $1,000 into this fund when filing Form I-526.

Reserved visas: The EB-5 annual statutory quota is set in the INA at 7.1% of the total for employment-based visas (140,000 x .071= 9,940), plus 7.1% of any unused family-based immigrant visa numbers from the previous year, for a total normally around 10,000. Of this total, the Act reserves 20% for investments in rural Target Employment Areas, which also get priority in processing; 10% for investments in high unemployment Target Employment Areas; and 2% for investments in infrastructure projects. USCIS defines “high unemployment” TEAs, and the determination is valid for two years from the project request filing (not from date of decision, so actual validity is less than two years).

Job creation requirements: While the Immigrant Investor program has always required the investment to create at least ten full-time jobs for US workers unrelated to the investor, this Act scales back which jobs count. For EB-5 direct investments, and for solo investments in a Regional Center, no indirect or induced jobs count: all ten must be direct jobs at the new enterprise itself. For pooled investments in a Regional Center, indirect jobs created outside the investment enterprise itself may be no more than 90% of the total jobs created, and no more than 75% can be impacts from construction lasting less than two years.

More investment restrictions codified: In addition to barring debt secured by assets of the EB-5 enterprise, the Act also bars any gifted or loaned investment funds, redemption arrangements, and the purchase of publicly-available bonds no longer qualifies.

Grandfathering: The Act preserves eligibility for all petitioners and dependents with an I-526 petition filed prior to enactment, moots litigation based on past lapses in EB-5 program authorization, and proposes to do the same into the future. But what becomes of already-pending or new Form I-829 Petitions by Investor to Remove Conditions on Residence where the investment qualified under the old standards? Will all the previously approved Regional Centers have to file for reauthorization under the new standards? We don’t know yet.

Some good news on Adjustment of Status: Concurrent filing of Form I-526 with Form I-485 is allowed. EB-5 adjustment applicants are now covered by INA 245(k), just as all other employment-based applicants are, which forgives up to 180 days out of status prior to filing. Age-out policy has also improved – Children who were in Conditional Resident status and under age 21 when an initial I-829 was filed are covered by the Child Status Protection Act if that I-829 gets denied, but the parent re-invests and gets a subsequent I-829 approved.