EB-5 Reform and Integrity Act
What is an EB-5 Visa?
The EB-5 visa category allows entrepreneurs to apply for a green card if they make a substantial investment in a commercial enterprise in the U.S., and plan to create or preserve ten permanent full-time jobs for qualified US workers. Immigrants can invest directly in a job-creating business, or they can invest through Regional Centers approved by USCIS to promote economic growth in designated areas.
The EB-5 program has been recently overhauled by the EB-5 Reform and Integrity Act (the “RIA”), which was signed into law by the Biden Administration last March 2022. On a general level, the RIA makes the EB-5 program more attractive to potential investors.
Following the passage of the RIA, the minimum EB-5 investment thresholds are:
A) $800,000 in:
a Targeted Employment Area (TEA), which is either: rural area (any area outside a metropolitan statistical area or outside the boundary of any city or town having a population of 20,000 or more); or a high unemployment area (any area experiencing an unemployment rate of at least 150% of the national average rate).
Infrastructure Projects, which are administered by a government entity that receives EB5 investments to develop public projects even if not located in a TEA.
USCIS is required to reserve 20% of eb5 green cards for investors in rural areas, 10% for investors in high unemployment areas, 2% for investors in infrastructure projects. Unused reserved visas carry over to the following fiscal year.
B) $1,050,000 for investments neither in TEAs nor in Infrastructure Projects.
One of the most welcome novelties for investors introduced by the RIA regards the so-called “Adjustment of Status” (AoS): those who are legally present in the United States and file an EB-5 I-526 or I-526E can now file concurrent applications for AoS. As a result, an AoS applicant would receive in most cases a work permit and advance parole while the main EB-5 I-526 or I-526E petition is pending. In other words, this means that the AoS applicant would be allowed to work and travel without restrictions even before the main application is approved.
Another significant change from the previous legislative innovation is that EB-5 investors are no longer required to have created all the minimum number of jobs (10) at the time of filing form I-829, which is the petition to be submitted by investors within two years from receiving the conditional green card following the approval of form I-526 or I-526E. The RIA now grants investors an additional year to show that 10 permanent jobs have been created, thus addressing those common situations where the development of the project is slower than expected.
How Does the EB-5 Reform and Integrity Act Help Investors?
In addition to creating a more friendly environment from an immigration standpoint, the RIA intends to offer financial protections to investors, following many instances from previous years where EB-5 funds had been mishandled.
Regional Centers, which are those entities approved by USCIS to pool and manage funds from multiple EB-5 investors, will now have increased reporting requirements to show compliance with US securities law. Specifically, EB-5 commercial enterprises, which are entities using the funds with the goal to create at least 10 permanent jobs, will have to obtain audited financial statements or to retain third-party fund administrators. Furthermore, every EB-5 project sponsored by a Regional Center will now be primarily submitted to USCIS before investments can be secured.
EB-5 promoters/brokers must now register with USCIS and records of all the fees paid with investors’ funds shall be maintained to increase transparency and align the interests of all the participants.
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