EB5 Regional Center Reauthorization!
EB5 Regional Center Reauthorization awaits President Biden’s signature, as you may have heard. The changes to the program, as copied from a recent notice from Regional Center CMB, are summarized as follows, with my comments in italics:
The Regional Center Program will be reauthorized through September 30, 2027 (5.5 years). This is obviously a good thing. Stability has been lacking for a long time.
The legislation includes ‘grandfathering’ for all investors who have an I-526 on file, or who file their I-526 petitions prior to September 30, 2026. Those investors will be able to complete the EB-5 process, even if the regional center program were to lapse again. It is understandable that this was an issue for many. Frankly, I never accepted the proposition that USCIS could legally reject previously filed and compliant petitions, but the industry was loathe to push that position through litigation. Happily, the issue is resolved.
The new minimum investment level will be $1.05 million, which will be reduced to $800,000 if the project is located in a qualified high-unemployment or rural area, or is an infrastructure project. This is a big jump from the previous TA minimum of $500,000, but not a huge jump when adjusted for inflation from the inception of the RC program.
The new investment amounts will take effect immediately, but the regional center program will not be officially reauthorized for 60 days. During this time, regional centers and regional center investors will not be able to file new petitions with the USCIS. The frenzy among the big Regional Centers to sign everybody up as soon as possible is already seen in their notices and ads. Yes, you may get an earlier priority date, and maybe you should jump if you want to get into a project that could close, but there is no rush. Finally, you have 5 years!
The minimum investment amount will be automatically adjusted for inflation every fifth year beginning on January 1, 2027 for the higher dollar amount, and the lower amount will be calculated at 75% of the higher amount.
New visa set-asides have been implemented: 20% of all visas will go to investors who invest in projects that qualify as rural, 10% will be reserved for high unemployment areas investments as defined under the new law, and 2% will be for infrastructure projects. As a practical matter, this creates, as does the minimum investment amount hike, more work for service providers. Investors should suggest that business plans and SOF reports will be a little more expensive, because the mounters and the work are higher.
Investors that are already in the United States on another visa can now file their I-526 and their adjustment of status petition (I-485) at the same time. Again, this is extra work, and lawyers will adjust their fee structures accordingly.
New integrity measures are established that will protect investors by adding more reporting requirements for regional centers and their operators, and requiring disclosures of all fees paid. While this looks good on its surface, it will have the effect of pushing marginal regional Centers out of the industry. The big dogs are gathering all the choice cuts for themselves. From an investor standpoint, it may not have much affect, and the larger well-established centers have good track records, but investors should expect less flexibility and higher administrative fees, all in all.
Things that are unknown include: whether there have been any changes in the adjudication capacity in the Investor Program Office, and what the reauthorization and resumption of Regional Center adjudication will do to direct investment cases currently in the queue, that might have otherwise been adjudicated soon.