Did the EB-5 Reform and Integrity Act just revive the Regional Center Program that lapsed in June 2021, or did it create a whole new program?
This question has led to a fresh round of uncertainty and confusion for Regional Centers in the US and EB-5 investors across the world.
This question is key to determining whether Regional Center authorizations issued under the now-lapsed program will continue under the new law.
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USCIS Mandates Reauthorization For All Regional Centers
The USCIS surprised investors and industry watchers by announcing in mid-April that all the 600+ Regional Centers in the US will have to file a fresh I-956 and wait for approval before accepting EB-5 investments.
Further, the USCIS announced that RCs not filing the fresh I-956 will lose their authority to operate as Regional Centers.
Investors Challenge USCIS’ Interpretation
Investors were quick to challenge the interpretation that a fresh I-956 was mandatory.
Apart from the economic hardship argument, investors are claiming the text of the law does not support the excessively harsh and rigid stance adopted by the USCIS.
The court has stayed the USCIS decision, which means Regional Centers that were designated and authorized under the previous law will continue to remain so and can accept investments from bona fide EB-5 investors.
However, this is does not settle the question because it is not a final judgment and the USCIS could appeal.
Net Impact: Unnecessary and Avoidable Uncertainty
The past two years have been a rough ride for EB-5 investors. The 2019 Modernization Rule hiked minimum investments by 80 percent. The courts struck down the Modernization Rule on a technical flaw in its enactment.
The government chose not to appeal the reversal but, at the same time, allowed the Regional Center Program to lapse.
The enactment of the EB-5 Reform and Integrity Act seemed to finally settle all issues and brought hope of some much-needed stability to the program.
However, the USCIS decision to rigidly interpret the law has resulted in unnecessary and completely avoidable uncertainty all over again.
This issue is important because more than 90 percent of all EB-5 investors prefer the Regional Center route to apply for the EB-5 visa.
Investors will have to invest at least $1.05 million (in a non-Targeted Employment Area) or $800,000 in a TEA and create at least ten full-time jobs to qualify for the green card.
The Regional Center route is popular because it allows investors to pool their funds and invest in big-ticket projects. Further, even indirect jobs created by the RC project count towards the job-creation requirement, which is a significant plus over the direct jobs requirement applicable to those using the direct investment route.
The court-ordered stay is positive news for investors and Regional Centers but whether the issue has been completely settled remains to be seen.