On October 11, 2023, USCIS announced two major interpretations of the EB-5 Reform and Integrity Act of 2022 (RIA).
Key Takeaway Point 1: Two-year investment period for RIA investors
There is a significant change to the sustainment requirement for RIA investors. USCIS indicated that “the INA [the Immigration and Nationality Act] now requires only that the investment must be expected to remain invested for at least two years, provided job creation requirements have been met.”
Pre-RIA investors, however, must still sustain their investment throughout their conditional residence.
The two-year period begins on the date the full amount of the required investment is made, including being made available to the job-creating entity. If invested more than two years before filing the I-526 or the I-526E, USCIS indicates the investment should remain at the time the I-526 or the I-526E is filed so that USCIS can evaluate eligibility.
This announcement is expected to have significant implications for the EB-5 project market, as investors will compare projects according to the feasibility of capital repayment in two years. At the same time, investors will also need to factor in the possibility of this interpretation being overturned.
Key Takeaway Point 2: Good faith investor protections apply to both pre-RIA and RIA investors
The RIA introduced new expansive protections for investors in terminated regional centers and debarred new commercial enterprises (NCEs). The October 11 guidance indicated these protections would apply to pre-RIA investors as well as RIA investors. USCIS also indicated that it will use “the procedural flexibilities” provided under the provisions at INA 203(b)(5)(M) (“Subparagraph (M)”) to extend the 180-day deadline for investors to establish continued eligibility notwithstanding termination or debarment of their associated regional center or NCE.
The new guidance distinguished terminations for “purely administrative noncompliance” from “substantive reasons.” Where a regional center is terminated for “substantive reasons,” USCIS indicated that it would not extend applicable response deadlines and implied that these reasons may also affect investors’ continued eligibility.
There are many questions surrounding this distinction, not the least of which is relevance to investor eligibility. Note also that as expansive as Subparagraph (M) protections are, the job creation requirement remains.
At the same time, USCIS released an update to its EB-5 Questions and Answers, covering the new guidance and other new updates including the filing order for regional center applications and associated investor petitions.
Carolyn Lee PLLC will be covering these sea-changing announcements during our upcoming Investment Immigration Conversations webcast, scheduled for October 18, 2023, at 2 pm ET. The registration link is here. Questions in advance are welcome.
2023/10/23 Update: The video recording of the October 18, 2023 “Investment Immigration Conversations” on this topic is now available here.