Legislative Changes to the EB-5 Immigrant Investor Program

Legislative Changes to the EB-5 Immigrant Investor Program

INSIGHTi

Legislative Changes to the EB-5 Immigrant
Investor Program
Updated July 26, 2023
The EB-5 immigrant investor program provides lawful permanent resident (LPR) status to foreign
investors (and their spouses and unmarried children under age 21) who invest a specified amount of
capital in a new commercial enterprise (NCE) in the United States that creates at least 10 jobs. The
program is administered by U.S. Citizenship and Immigration Services (USCIS), a component of the
Department of Homeland Security (DHS). Investors who choose a targeted employment area (TEA)—a
rural area or area of high unemployment—qualify for reduced investment amounts. The law permits the
admission of approximately 10,000 investors/qualifying relatives annually (7.1% of all employment-
based visas).
EB-5 offers two pathways. In the standard or stand-alone pathway, foreign nationals invest in a new or
existing enterprise that uses the capital for direct job creation. The second and more common pathway, the
Regional Center Program, allows investors to pool investments into an NCE, which are typically used to
fund a separate job-creating entity (JCE). Regional center investors may count indirect jobs toward the
job creation requirement. Regional centers must be designated by USCIS to be eligible for EB-5
investments; USCIS may terminate designations for those not in compliance.
The Regional Center Program was initially authorized as a pilot program and has never been made
permanent; it must be regularly reauthorized. On June 30, 2021, its authorization expired and the program
remained lapsed for nearly nine months, during which time USCIS did not process pending applications
and rejected new applications associated with regional center investments.
EB-5 Reform and Integrity Act of 2022
In March 2022, Congress passed the EB-5 Reform and Integrity Act of 2022 (hereinafter, “2022 Act”) as
part of an omnibus funding package (P.L. 117-103). The legislation, codified in Section 203(b)(5) of the
Immigration and Nationality Act (8 U.S.C. §1153), reauthorized the Regional Center Program, and
implemented a number of changes and requirements for investors and regional centers.
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Capital Investment Requirements
Prior to the 2022 Act, investment requirements remained unchanged from 1990 ($1 million/$500,000 in a
TEA) until a 2019 federal regulation increased them ($1.8 million/$900,000 in a TEA). However, in June
2021, that rule was vacated by a federal district court and amounts reverted to those in place prior to
2019.
The 2022 Act set new requirements: minimum investments of $1,050,000, or $800,000 in a TEA or
infrastructure project (see “TEAs,” below). The new amounts reduce proportionally the discount for TEA
investments from 50% to 24%. These amounts are to be adjusted for inflation every five years beginning
January 1, 2027.
TEAs
Since the EB-5 category was enacted, the law has defined high unemployment areas as those that have
experienced at least 150% of the national average unemployment rate. In the past, state officials would
designate geographic or political subdivisions as areas of high unemployment. Certain such designations
were subject to gerrymandering allegations.
Under the 2022 Act, only USCIS may designate high-unemployment TEAs, which include the census
tract or contiguous census tracts in which the NCE is principally doing business. The act specifies that the
weighted average of the unemployment rate for the census tracts must be at least 150% of the national
average.
Rural areas are areas outside Metropolitan Statistical Areas, as designated by the Office of Management
and Budget (OMB), or areas outside of cities and towns with populations less than 20,000, based on the
most recent decennial census. The 2022 Act specifies that USCIS shall prioritize processing and
adjudicating EB-5 petitions for regional center investments in rural areas.
The 2022 Act specifies certain EB-5 immigrant visa set-asides for those who invest in TEAs, including
the following:
• 20% for qualified immigrants who invest in a rural area,
• 10% for qualified immigrants who invest in a high-unemployment area, and
• 2% for qualified immigrants who invest in an infrastructure project.
The 2022 Act defines an infrastructure project as a “capital investment project in a filed or approved
business plan, which is administered by a governmental entity (such as a Federal, State, or local agency or
authority) that is the job-creating entity contracting with a regional center or new commercial enterprise
to receive capital investment ... as financing for maintaining, improving, or constructing a public works
project.”
Regional Center Program
The 2022 Act re-authorizes the Regional Center Program through September 30, 2027. As a result,
USCIS resumed processing regional center-based applications. Applications are subject to the law in
place at the time of filing (e.g., investment requirements). In the event of a future lapse, the act directs
USCIS to continue processing petitions filed before the expiration date. It also specifies parameters for
indirect jobs, which may count toward 90% of the job creation requirement.
USCIS interpreted the 2022 Act to mean that all previously designated regional centers were no longer
authorized and required them to reapply for designation. Litigation regarding regional centers ensued. In
June 2022, a federal district judge ordered USCIS to allow previously designated regional centers to
continue participating in the EB-5 program while the litigation was pending, stating that USCIS’s

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interpretation “was almost certainly legal error.” In a subsequent settlement agreement, USCIS agreed to
allow previously designated regional centers to retain their designation.
Oversight Measures
The 2022 Act includes a number of oversight measures, primarily targeted toward regional centers, that
address concerns that had been raised about fraud and abuse in the program. It establishes an EB-5
Integrity Fund, funded by annual regional center fees ($20,000, or $10,000 for those with 20 or fewer
investors) and $1,000 fees from each Immigrant Petition by Regional Center Investor filed.
USCIS must use the fund for investigations, including detecting and investigating fraud and other crimes
related to the program, determining compliance, and conducting regional center audits (every five years)
and site visits (for each new NCE or JCE). The 2022 Act sets requirements for fund administration,
business plans, and annual statements. DHS may sanction those who submit fraudulent statements. The
2022 Act also sets rules and standards for third-party promoters of a regional center, NCE, or JCE.

Author Information

Holly Straut-Eppsteiner

Analyst in Immigration Policy

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