On November 21, 2019 a new era of EB-5 began when the EB-5 Immigrant Investor Program modernization regulations were published as a final rule. The regulations increased minimum investment to $900,000 and $1,800,000 for non-TEA. Moreover, USCIS severally restricted the definition of a TEA and stripped states of the right to designate TEAs. As a result, we are now in a holiday slump but hopefully 2020 will see new legislation that will reform and revive the program:
1. Regional Center Extension, With No Legislative Changes. Congress has passed another short-term extension of the EB-5 Regional Center Program until September 30, 2020, without any legislative changes that might truly reform the program.
2. Adjudications Taking Longer. Average processing times for I-526, I-829, and I-924 adjudications exploded in 2019, and the number of mandamus lawsuits are increasing as frustrated investors seek adjudication.
3. EB-5 Market. There has been a precipitous decline of new I-526 filings since late November, but it is anticipated there will be an uptick in the new year as the market corrects and projects in compliance with the new regulations are rolled out. If not, the urgency for new legislation could not be more critical since the US will be losing billions in direct foreign investment and countless thousands of jobs.
4. I-924A Season. Every year Regional Centers are required to submit the Form I-924A, Annual Certification of Regional Center to USCIS on or before December 29, documenting capital investment and job creation. This year, USCIS issued a new form, without notice, and later corrected it. Regional Centers are allowed to use either the 12/23/16 edition or the currently posted 11/21/19 edition.
5. Regional Center Termination Binge. USCIS continues to terminate Regional Centers are a high rate and appears to require Regional Centers to continuously raise money for new projects. The fact that there are few takers for the increased amounts especially since Congress has failed to deal with Retrogression and massive backlogs in the waiting line. Requiring investors to commit huge amounts of capital for an indeterminable period of time and to have the money repeatedly placed “at risk” indicates an EB-5 framework that is poorly thought out. Senator Rounds and Senator Rand Paul have both introduced good bills but neither seem to be gaining traction. However, this presents operational challenges for many Regional Centers, and is a “perfect storm” for the EB-5 industry.
Wolfsdorf Rosenthal LLP is a full-service law firm that actively assists Regional Centers and immigration investors in EB-5.