Read this before you tell anyone about the EB-5 Immigrant Investor Program

By Gordon Quan and Kathryn N. Karam, Quan Law Group, PLLC

Your clients may have seen advertisements for obtaining US permanent residency visas by investing in real estate projects in the United States, but you need to be careful advising would-be investors about it, as Congress has just made significant changes to the popular Regional Center Program as part of its reauthorisation.

While the EB-5 programme received a long-term reauthorisation through September 2027, the reauthorisation involves several major changes to the EB-5 Regional Center Program. Approximately 90% of foreign investors, under what is commonly referred to as the “EB5 program”, invest in regional centre projects. In the past, this programme has allowed developers to pool several investors’ funds and has permitted investors to demonstrate the creation of at least 10 full time jobs by counting indirect and induced jobs resulting from the investment project versus having to show that the investment funds created 10 direct full time employees of the project.

As part of its most recent omnibus spending bill, Congress agreed on changes to the programme with major implications for investors seeking to apply for green cards (permanent resident visas) through the EB-5 programme. Before you talk to potential investors about the EB-5 program, it is wise to review the new EB-5 legislation and note the new requirements for EB-5 investors and regional centres.

Key requirements and criteria include the following:

• A minimum required investment amount of USD 800,000 in a Targeted Employment Area (which may be a rural area or a high unemployment area), or USD 1,050,000 in other areas.
• The “high unemployment area” criterion for TEAs (targeted employment area) is now defined more narrowly and will be determined by USCIS. The determination will be valid for two years with the option to renew in 2-year increments.
• While individuals may still invest in “direct investments” that create at least 10 directly hired US workers, any pooled investments (investments involving two or more investors) must be sponsored by a Regional Center and cannot be direct investment projects.
• Investors in EB-5 Regional Center projects will have new limits on how job creation is counted.
• Regional Centers must file exemplar project proposal applications for review and approval, but investors may file EB-5 petitions while the exemplar is pending.
• Investors no longer qualify for immigration through the EB-5 programme based on the purchase of publicly available bonds (either for-profit or municipal).
• Regional Centers will now be responsible for additional reporting requirements and fees.
• The new EB-5 law requires promoters and immigration agents abroad to register with USCIS and follow specific guidelines for immigration and securities compliance, including disclosing all fees to investors in writing which will be included in the EB-5 petition.

Prior to the recent reauthorisation of the EB-5 regional center programme, initial EB-5 petitions were taking 24- 36 months for adjudication. The new legislation specifically directs USCIS to charge whatever filing fee is required to process filings in 90-240 days, with the shortest processing times for initial investors filing after exemplars have been filed by their regional centres.

The new law grandfathers in investors who filed their applications prior to these changes, considering them still eligible under prior regional centre legislation. However, it is not clear at this time whether the new regional centre law requires all regional centres to file new regional centre applications or amendments to confirm the identity of all persons involved in the regional centre, or if they must show proof that they have developed policies and implemented procedures that comply with integrity rules introduced in the new regional centre law.

With the added documentation requirements and compliance measures for regional centres, the new law, and promoters and immigration agents overseas, advisors should be wary of encouraging clients who seek immigration to the US by the investment of funds.

Gordon Quan

GGI member firm
Quan Law Group, PLLC
Law Firm Services
Houston (TX), USA
T: +1 713 625 9200
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W: quanlaw.com

Quan Law Group, PLLC is a full-service US immigration law firm located in Houston, Texas. They understand that each immigration case is different, and each client’s situation and needs are different. They offer a personalised approach as the optimal strategy for successfully representing their clients.

Gordon Quan is the Founder and Managing Partner of Quan Law Group LLP, one of the largest immigration law firms in Texas. He has received a Lifetime Achievement Award from Texas Lawyer Magazine, and is AV Rated as Preeminent by Martindale Hubbell. Gordon has practised US immigration law for over 45 years.

Kathryn N. Karam

GGI member firm
Quan Law Group, PLLC
Law Firm Services
Houston (TX), USA
T: +1 713 625 9200
E: This email address is being protected from spambots. You need JavaScript enabled to view it.
W: quanlaw.com

Kathryn N. Karam is a Senior Associate with the Quan Law Group LLP in Houston, TX. Kathryn is Board Certified in Immigration and Nationality Law by the Texas Board of Legal Specialization, and has been listed as a Rising Star by Texas Monthly Magazine.

Published: Global Mobility Solutions Newsletter, No. 01, Spring 2022 l Photo: SeanPavonePhoto - stock.adobe.com