Investors and business owners in the EB-5 investment industry have had to remain flexible and adapt to changes. Some have been positive, such as the decrease in the minimum EB-5 investment threshold, which increased the accessibility of the EB-5 visa. Still, others, such as the expiration of the EB-5 regional center program in June 2021, were received less enthusiastically.
Now it seems that the EB-5 industry is headed for yet another change: reform with long-lasting effects.
Recently, on February 3, 2022, the draft of an EB-5 reform bill was leaked to the public. The draft includes major changes to the EB-5 policies, the most notable of which are the increase in the minimum investment for EB-5 visas and the reauthorization of the regional center program.
A Leaked EB-5 Reform Bill
The potential bill lists many changes that could affect EB-5 investors, specifically in terms of their investment threshold, which will range from $700,000 to $850,000, depending on the location of their projects. Investors with projects located in targeted employment areas (TEAs) would have a minimum threshold of $700,000, while those with projects outside TEAs would now have a minimum investment requirement of $850,000. Both of these amounts are a sharp increase from the current $500,000 minimum investment threshold. It is evident that United States Citizenship and Immigration Services (USCIS) and the Department of Homeland Security (DHS) are interested in once again raising the minimum amounts, as both agencies have appealed the court ruling that lowered them in the past.
In 2021, Congress failed to reauthorize the EB-5 regional center program and has since failed to provide an alternative to industry stakeholders. One of the other significant changes in the potential EB-5 reform bill is the revalidation of this investment model for several more years, potentially until 2027. As many investors have I-526 petitions that are currently in processing limbo, the revalidation of the program would be a welcome change. In fact, many industry stakeholders predict that projects sponsored by the regional center program may face serious legal troubles if there are no steps taken to retroactively approve those investors or, indeed, revalidate the program.
The EB-5 potential reform bill also included updated rules for designating TEAs, which would allow for new kinds of areas to be considered TEAs. However, there would be stricter requirements for high-unemployment TEAs.
How Should Interested Investors Proceed?
The potential EB-5 reform could be included in an appropriations bill that is due on February 18, 2022, which means that foreign investors who are interested in investing at the current threshold of $500,000 should contact an immigration attorney and find a suitable EB-5 offering. They now have a small window in which to file their I-526 petitions. The bill, if passed, may even increase the EB-5 investment requirement ever so often. Not all is negative, however, as there are several direct EB-5 investment offerings currently on the market that offer financial safety and are USCIS-compliant.
There is also a possibility that the passing of the bill could be pushed to a later date or not take place at all. In addition, the proposed changes in the draft could be entirely different from the final draft approved by Congress. Regardless of the events leading to its passing, reform will likely be beneficial to the EB-5 industry in some way, making EB5 investment funding an invaluable asset to the economy in the United States.