EB-5 Investor Visa Update January 10, 2022 – Work Visas


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A decision on January 5, 2022 by the Department of Homeland
Security (DHS) to drop an appeal hopefully provides some
clarification to confusion and uncertainties about the minimum
required investment caused by a June 22, 2021 Federal Court
Decision.

In this Article we will provide more details about that and an
update about the EB-5 Regional Center Program which expired on June
30, 2021.

EB-5 is not for the faint hearted, and certainly not for those
who cannot easily afford to have the funds tied up for a long time
and a potential loss of the amount invested. Here are the
details.

EB-5: Amount of Investment

The program was created in 1990 and the law specified that the
standard amount required was $1 million, but if the investment was
in a targeted employment area (TEA), the required amount was
$500,000. The 1990 law contained a process by which the Secretary
of Homeland Security could increase the standard amount. On July
21, 2019, then-Acting Homeland Security Secretary Kevin McAleenan
signed a Final Rule, which among other things, increased the
standard investment threshold to $1.8 million and the reduced
investment threshold to $900,000 effective November 21, 2019. On
June 22, 2021, in Behring Regional Center, LLC v. Wolf, et
al.
, the U.S. District Court for the Northern District of
California held that there was a procedural defect in the July 21,
2019 regulation and therefore the increase was not legal. As the
July 21, 2019 regulation was no longer effective, the required
amount would revert to $1 million and $500,000. But the story did
not end there. DHS filed an Appeal which could have potentially
overcome the Court decision and reverted to the higher amount. Now
that DHS has dropped its Appeal, the minimum investment for
investors who create ten jobs in a Targeted Employment Area (TEA)
is back to $500,000. It also confirms that states have the
authority to designate an area as a TEA.   

EB-5 Regional Center Program Law Expired June 30, 2021

It is very important to remember that there are two EB-5
programs. The 1990 law created what is commonly called the
“EB-5 Direct Jobs Program” or “Stand-Alone
Program.” That program does not expire and continues.

However, only the second program, the one commonly known as the
“Regional Center Program,” is the one which expired and
needed reauthorization. The Regional Center Program was introduced
as a “pilot program” for 5 years in 1992 and allowed for
the jobs requirement to be satisfied by counting not only the full
time jobs directly created by the enterprise, but also the indirect
jobs created by the investment. Most EB-5 investors had used the
Regional Center Program because of the ability to count indirect
job creation and pool investments from multiple applicants.

After the initial 5 year term in 1992, Congress extended the
Regional Center Program more than fifteen times in both long- and
short-term increments for almost 29 years with the last one
extending validity of the RC Program through June 30, 2021. Since
then, USCIS has followed its prior policy of holding action on any
pending Regional Center based EB-5 applications until Congress is
able to pass appropriate legislation. Even for Regional Center
based approved EB-5 Petitions, USCIS is holding action on pending
Adjustment of Status applications. The State Department is likewise
not issuing the immigrant visas for those Consular processing the
EB-5 Regional Center based immigrant visas.

For now, Direct EB-5 investments are very attractive at $500,000
for TEA investments and $1 million in other areas.

Most commentators anticipate that either USCIS or Congress will
seek to increase the minimum investment amount back to a higher
number. In the meantime, Regional Center investors continue to hope
for Congressional reauthorization of the Regional Center
program.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.

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