EB-5 REGIONAL CENTER PROGRAM IS REAUTHORIZED
On March 9, the House of Representatives has an EB-5 bill that reauthorizes the Regional Center Program and made other significant changes to EB-5 law.
On March 10, the Senate passed the EB-5 Bill, and the EB-5 Reform and Integrity Act of 2022 now becomes effective law after President Joe Biden signed it on March 15, 2022.
A summary of the major changes to the EB-5 program is provided below for your convenience and understanding:
Grandfathering
- Preserves eligibility of investors as of the time they filed their I-526, i.e. investors who filed by March 11 will be processed based on old rules.
Adjustment of Status
- Investors and family already legally in the U.S. and eligible for a visa number may concurrently file applications for adjustment of status (avoiding consular visa processing) along with or while awaiting adjudication of the investor’s I-526 petition.
Investment Amounts
- Effective immediately upon enactment of Act:
- $800,000 in Targeted Employment Areas (TEAs) – rural and high unemployment areas
- $1,050,000 in non-TEAs
- On Jan. 1, 2027, and every five years thereafter, investment amounts adjust for inflation.
Pooled Investors
- Only 1-to-1 Projects for Direct EB-5.
- Multiple EB-5 investors must do so through regional center.
Regional Center Program Reauthorization.
- Reauthorized through September 2027, beginning 60 days after enactment of act (i.e. beginning in May)
TEAs
- TEAs are to be determined only by USCIS (and not state or local authority) and are valid for two years from project exemplar filing, renewable in two-year increments.
Reserved EB-5 Visas
- Set-asides are a percentage of the 10,000 EB-5 visas available every year.
- 20% for rural projects
- 10% for distressed urban area projects
- 2% for infrastructure projects
- Unused visas “carry over” in the same category in the immediately following year
- Unused visas in any category made generally available for any project, in the year immediately following the “carry-over” year
Indirect Job Limits
- Can count for no more than 90% of the jobs
- Only 75% of jobs can be from impacts from construction lasting less than two years (and those count only to the extent of the fraction of a two-year period).
Project Requests
- A Regional Center must file an application for project approval with USCIS, but investors can file I-526 petitions once the required project request is filed.
- USCIS to perform a site visit prior to each project, giving at least 24 hours’ notice.
Increased Regional Center Oversight and Regulations
- Endure a USCIS audit every five years
- Demanding applications and annual reports must include broad certifications of securities and other compliance and conditions, including all marketing fees paid.
- Sanctions for misstatements or noncompliance including suspension, fines up to 10%of capital raised, debarment of individuals, or termination
Integrity Fund
- To support a new “integrity fund,” in addition to all filing fees for application, each Regional Center must pay an annual fee of $20,000, or $10,000 for those with 20 or fewer investors per year, and each Regional Center investor must pay $1,000 with a I-526 petition.
I-829 Changes
- Investors filing I-829 petitions still may be “actively in the process of creating the employment required,” but the investor must make an additional filing a year later showing that the jobs have been created.
Filing Fees
- The legislation directs USCIS to charge what it takes to process various filings between 90 and 240 days, with the shortest times for investors filing I-526 petitions after project requests by RCs.
Innocent Investor Protection.
- Investors who are victims of NCE/JCE/Regional Center termination or debarment because of the NCE/JCE/Regional Center’s fault or fraud have relief available to protect their priority date. They will have to reinvest within 180 days with another entity to protect their priority dates.
Material Change
- Regional Centers must report any material changes to their projects in their annual reports and disclosures to investors.
Promoters
- Promoters, including migration agents abroad, must register with USCIS, fully disclose all fees, and follow USCIS guidelines for immigration and securities compliance.
For more information about the EB5 new law or any EB5 investing opportunity, schedule a consultation or email info@smslawfirm.us.