Indians have received the second highest number of visas under the program after China in FY 2020
By Shilpa Menon
The EB-5 Immigrant Investor program witnessed two key developments in June. To begin with, the District Court for the Northern District of California set aside the final rule for the modernization of the EB-5 program on June 22.
Among other things, this brought the minimum investment amount for the program down to $500,000, from the amount of $900,000 that had been in effect since November 2019.
The other, and perhaps even more important, development was the lapse of the regional centre EB-5 program on June 30. Historically, over 95% of EB-5 investors have preferred the regional centre program due to the cumbersome nature of the latter route.
So while the direct EB-5 Immigrant Investor program continues to accept applications, the lapse in the regional centre program has left many potential EB-5 investors unsure about the steps to be taken next.
Read: A window opens to get EB-5 visa with lower investment (June 23, 2021)
What does this mean for the potential investor?
Investors can take some comfort from the fact that this is not the first time that the regional centre EB-5 program has lapsed. The program has seen lapses in the past, and has been extended more than 25 times.
However, there is a slight nuance this time around, as previously the regional center program extension was tightly coupled to the US Budget bill and was therefore passed along with it.
For the very first time though, the EB-5 bill is no longer attached to another larger bill, and therefore needs to be either passed on a standalone basis, or needs to be attached to another bill such as the US infrastructure bill.
These decisions lie with the US Congress and most observers believe that the program will be reauthorized in the coming months.
Furthermore, the ruling of the District Court may or may not be overturned by a higher court such as the US Court of Appeals for the 9th Circuit, reinstating the earlier rules or leaving the current rules unchanged.
There is also a possibility that the US Citizenship and Immigration Services (USCIS) passes a new regulation increasing the investment amount and changing the definition of the targeted employment area (TEA).
What can the potential investor do?
The EB-5 program has a proven track record in providing international investors all the benefits afforded by a US green card.
In the Financial Year 2020 itself, more than 3,600 visas were issued under the program, with India being issued the second highest number of visas after China.
Indians have also invested heavily through the program and India has held a position within the top 10 countries to be issued EB-5 visas over the past decade.
However, given that the USCIS is no longer accepting new applications under the regional center program, the potential investor will have to wait a few months until the program gets reinstated.
This does not mean that there isn’t anything that the investor can do during this interim period.
There is speculation regarding the opening of a short window, where investors would be able to file at $500,000 in case the regional center program gets reauthorized before the regulations are updated.
However, if investors are to take advantage of such an opportunity, they would need to have done the pre-work around their filing well in advance. Investors should also keep in mind that the chances of the amount being revised upwards, sooner or later, is high.
The pre-work typically includes selecting a Regional Centre and a good quality EB-5 project to invest in.
Investors would also be well placed to consult with an immigrant attorney in advance, and begin the documentation process related to their source of funds, as all of this requires a good amount of planning.
The services of US-based advisory firms that specialize in EB-5 investments can prove to be quite advantageous at this juncture, as they help investors plan every step of their application.
All in all, there is a lot of optimism with regards to the future of the program and the associated reforms, but the application process itself will need to be handled with a healthy amount of patience and prudence.
(Shilpa Menon is Senior Director, India, LCR Capital Partners — a global private investment and advisory services firm for US immigration and investment. Prior to joining LCR, she was Vice President, Products & Advisory at Avendus Wealth Management in India, where she oversaw the firm’s global investment products.)