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An Easy Read Summary of the EB-5 Reform and Integrity Act of 2022

by | Apr 6, 2022 | EB-5, Immigration, News

Note: This article is for educational purposes only and does not constitute legal advice or the creation of any attorney and client relationship. Legal advice must be obtained for specific questions from your immigration lawyer after formal engagement.

On Tuesday, March 15, 2022, President Biden signed an omnibus spending package that included an EB-5 bill that provides, effective immediately, for a 5-year reauthorization of the Regional Center Program and other program changes. Several updates replace and/or amend the existing law and regulations promulgated thereunder. 203(b)(5) of the Immigration and Nationality Act (8 U.S.C. 1153(b)(5)). The EB-5 Regional Center industry has been waiting many years for these changes.

The following is a summary of the provisions of the EB-5 Reform and Integrity Act of 2022 (“RIA”):

Investment Amount in Equity
a.       Base amount $1,050,000 increased from $1,000,000 (and decreased from the $1,800,000 required in late 2019).

b.      Targeted Employment Area (TEA) investment amount of $800,000 increased from $500,000 (and decreased from the $900,000 required in late 2019).

c.       Investment amounts will be adjusted for inflation every five (5) years, starting January 1, 2027.

d.      The new investment amounts and TEA definitions are effective immediately “on the date of enactment of this Act.”

e.      TEAs are defined as

i.            Single-census-track high unemployment areas of that experience an unemployment rate of at least 150% of the national average;

ii.            Census tracts that qualify as a TEA by combining adjacent high unemployment tracts; and

iii.            Rural area with a population of less than 20,000 people.

f.        Investment amount and TEA changes apply prospectively.

g.       The petitioner must establish eligibility when filing the Form I-526 Petition. If the Form I-526 Petition is valid when filing, the petition is valid when it is adjudicated.


Annual Reserved Visa Categories
a.       20% allocated for investments in rural areas (about 2,000 visas).

b.      10% allocated for investments in areas designated by the secretary of homeland security as high employment unemployment areas (about 1,000 visas).

c.       2% allocated for investment into infrastructure projects (about 200 visas).

d.      Unused visas from the reserved categories in any given year will carry over to the following year.


Job Creation
a.       Each EB-5 investment is required to create at least ten (10) qualified full-time positions/employees.

b.      Only 90% of jobs may be created indirectly.

c.       For projects that take less than two (2) years to complete, construction jobs can only qualify for up to 75% of the jobs determined by valid methodology.

d.      Tenant occupancy can count towards the total required number of employees if the employees are new hires and not transferred to the project.


a.       Cases filed prior to the RIA will be adjudicated under the existing law at time of filing, not the new law.

b.      The expiration of the Regional Center Program on June 30, 2021 shall not impact the cases that were timely filed and pending on June 30, 2021. The pending cases are grandfathered for completion.

c.       No increased investment or new TEA rules will apply to pending grandfathered cases.

d.      If the Regional Center program sunsets in the future, investors will not suffer uncertainty and pauses in processing.

e.      Cases timely filed before the new sunset date of September 30, 2026 will be grandfathered to completion, notwithstanding program expiration.


Source of Funds (SOF)
a.       SOF rules are mostly intact but stricter in some regards.

b.      Gifted and loaned investment funds must

i.            be made in good faith;

ii.            not be gifted to circumvent any limitations in law;

iii.            only come from lawful sources; and

iv.            not be proceeds of illegal activity.

c.       Unless the loan comes from a bank, lawful sources of funds must be proved.

d.      Seven (7) years of tax returns must be submitted as a part of the SOF report. It was often difficult, if not impossible, to get to the previous requirement of five (5) years of tax returns. Carefully crafted filing information and full explanations for any deficiency, if credible, have often been accepted by USCIS.


Prohibited Redemption & Debt Arrangements
a.       Numerous USCIS interpretations under prior law are locked in by statute, including prohibited redemption and debt arrangements, and gifted and loaned investment funds.

b.      Any right granted to the investor to redeem the investment at a fixed amount is not valid.

c.       Any authorization for the NCE or JCE to acquire the interest of the investor is binding and permissible.

d.      There is no change in the regulation that the investor is permitted the return of his/her investment secured by the assets of the enterprise (NCE/JCE/project).

e.      Purchase of publicly available bonds (municipal or for profit) no longer qualifies.


Form I-485 Adjustment of Status (AOS)
a.       Investors can now concurrently file the Form I-485 AOS with the Form I-526 Petition.

b.      The Form I-485 AOS can now be filed while the Form I-526 Petition is still pending.

c.       Investors can now file after the Form I-526 Petition is approved and before the priority date is current on the Visa Bulletin.

d.      The investor must be lawfully in the US and QUALIFIED to file AOS.


Direct Hire Investments & Pooled Investing
a.       Single individual investments may not utilize regional center employment creation provisions.

b.      Pooled investments of two (2) or more investors requires a regional center to sponsor the project and EB-5 investors, even if all ten (10) employees per investor are directly hired on payroll by the project (NCE and/or JCE).


Regional Center Ownership, Control & Management
a.       U.S. citizens or lawful permanent residents may be “involved” with ownership, control, and management of regional centers.

b.      No foreign governments are permitted.

c.       It is not yet clear if new or supplementary filings must be made to enable a regional center to continue operating how it did prior to the RIA.


Project Applications (“Exemplars”)
a.       Known as “Application for Approval of Investment in a Commercial Enterprise”.

b.      Like previous I-924 “exemplar” filings, but with different content requirements.

c.       A request for project approval must be made before any Form I-526 Petition is filed for the project.

d.      It is not necessary to wait for government approval of the project application.

e.      However, new Form I-526 Petitions may NOT be filed before May 14, 2022.

f.        Supporting documents for the Form I-526 Petition that are already included in the approved project “exemplar” application can be referenced and no longer need to be copied/attached.


Material Change
a.       Changes to regional center and project plans must be filed 120 days before the proposed changes.

b.      Regional centers must report material changes to projects in their annual report including any disclosures to investors about the material change.

c.       The bill reinforces USCIS policy that a “material change” to business plans can result in the denial or revocation of investor petitions, without defining what a material change is.

d.      Investors should look for regional center projects developers who have a clear project plan, solid capital stack, and track record of completing projects as planned.


Site Visits, Audits, & Reporting
a.       USCIS must perform a site visit to each project, giving at least 24 hours’ notice.

b.      The Secretary of Homeland Security is tasked with auditing each regional center at least once every five (5) years.

c.       The Secretary of Homeland Security may terminate the designation of a regional center that does not consent to an audit or deliberately attempts to impede an audit.

d.      Each regional center must also submit an annual statement to Homeland Security.

e.      Failure to submit an annual statement will result in a sanction.


a.       The bill specifically recognizes “redeployment” of capital that gets paid back to the new commercial enterprise (NCE) before the end of the investor’s conditional residence.

b.      The RIA continues some existing policy requirements: all the required jobs were initially created, and redeployment is at risk in commercial activity.

c.       Relaxes one requirement: allows redeployment throughout the U.S. rather than only in the regional center’s approved geographic area.

d.      Sets some new demanding requirements: the original project was implemented without material change and the job creating entity has repaid the capital.

e.      If any of a regional centers’ NCEs violate the redeployment rules, USCIS is required to terminate the regional center.

f.        Regional centers will be terminated for not reporting project failures to USCIS.


EB-5 Integrity Fund
a.       New annual fee for regional centers: $20,000 for regional centers with over 20 investors and $10,000 for regional centers with 20 investors or fewer.

b.      A special fund is established to collect the annual Integrity Fund fee every October 1.

c.       This annual fee may be increased in the future to help fund program enforcement activities.

d.      Each EB-5 investor must pay $1,000 to the Integrity Fund when filing the Form I-526 Petition.

e.      It is unlikely that the above provisions will apply to existing projects. The new Integrity Fund rules will most likely only apply to cases filed after the RIA. every case going forward.


Innocent Investor Protection
a.       The RIA adds some protection for innocent investors who suffer RC, NCE, or JCE  termination or debarment.

b.      Investors are protected as long as

i.            their investment arrangements were generally qualified, within 180 days of such adverse action (and notice);

ii.            investors can associate with replacement entities and even make an additional investment (which may include proceeds from claims or recoveries) to meet investment and job creation requirements

iii.            without losing priority date or child status protection.

c.       Children of investors who gained conditional residence and then lost it by entity termination or debarment or I-829 denial may keep their child status with a second petition filed by the parents within one (1) year.


Fund Administration
a.       In the absence of audited financial statements shared with investors, NCEs must maintain EB-5 capital in “insured” separate accounts and retain a third-party fund administrator to ensure that the capital properly flows to the job-creating activity.


AAO & Judicial Review
a.       Except for national security and public safety denials, there is judicial review of most adverse EB-5 decisions. Judicial review only occurs after exhaustion of appeal to the USCIS Administrative Appeals Office (AAO). I-829 denials remain subject to motion to reopen or reconsider only, and appeals are only in the context of removal proceedings in the Immigration Court.


I-526 Provision Changes
a.       At the I-526 stage the investor may be “in the process of investing.”

b.       Upon admission as a conditional resident, the investor must have already invested and may not be in the process of investing.


I-829 Provision Changes
a.       The I-829 provision changes are only applicable to investors who file their Form I-526 Petition after the enactment of the RIA.

b.      The RIA changes the standards and process for the Form I-829 Petition to Remove Conditions.

c.       The investor filing a Form I-829 Petition may still be “actively in the process of creating the employment required,” but the investor must submit an additional filing one (1) year after their initial submission to show that the jobs have been created.

d.      Even “Acts of God” such as hurricanes and pandemic may not justify a delay in job creation.


Possible Increase in USCIS Filing Fees
a.       USCIS filing fees increase on a regular basis.


No Preferential Treatment or Communications
a.       Parties are prohibited from communicating with USCIS directly in person.

b.      Any communication must be conducted under very rigid recording and reporting procedures.


Regulations will Eventually be Published by USCIS
a.       Official USCIS regulations should clarify some of the open issues that currently exist when reading the RIA at this time.

b.      Regulations must be published within 270 days of enactment

c.       Based on the historic performance of USCIS, it is questionable whether the official regulations will be completed within this mandated time frame.