Overview

The EB-5 Immigrant Investor Program was established in the Immigration Act of 1990 (P.L. 101-649) to attract new foreign capital investment to the United States and generate employment.¹ EB-5 is the fifth of five permanent, employment-based (EB) visa preference categories that provide lawful permanent resident (LPR) status under the Immigration and Nationality Act (INA).² The Immigrant Investor Program Office (IPO) within the Department of Homeland Security's (DHS's) U.S. Citizenship and Immigration Services (USCIS) administers the program.

Unlike most EB categories,³ EB-5 investors do not require an employer sponsor. Rather, EB-5 immigrants must invest a specified amount of capital in a new commercial enterprise (NCE) in the United States that creates or preserves at least 10 jobs. Investments in targeted employment areas (TEAs)—rural and high unemployment areas—as well as those in infrastructure projects, qualify for a lower investment amount.

Investors may choose from two pathways: the standalone (or standard) program and the Regional Center Program, which allows an investor to pool their investment with others to fund a project in a specific geographic area. While standalone investments must create or preserve direct jobs (those held within the NCE), regional center investors may count some indirect jobs (those held outside the NCE) toward the requirement. Both standalone and regional center investments may be made in TEAs to qualify for the lower investment amount ($800,000). The Regional Center Program was established by Congress as a pilot program in 1992. It has become the primary pathway for EB-5 investors since 2008 and now accounts for most EB-5 investments (see Figure 3). Nevertheless, unlike the standalone EB-5 provision, which does not expire, the Regional Center Program must be regularly reauthorized. In 2021, the program's authorization lapsed for nearly nine months, during which time only the standalone option was available.

USCIS initially grants those admitted under the EB-5 category conditional permanent resident status for two years.⁴ Subsequently, investors and their derivatives must apply to remove the conditions on their status. If they have met the visa requirements (i.e., invested and sustained the required money and created the required jobs), they receive full LPR status. If a foreign national investor has not met the requirements or does not apply to have the conditional status removed, his or her conditional LPR status is terminated, and, generally, the foreign national is required to leave the United States or will be placed in removal proceedings.

Typically, there are 140,000 total employment-based visas made available each fiscal year across all EB categories, with 7.1% of that total (approximately 10,000) allocated to EB-5 investors and their derivatives (spouses and children)⁵. Admissions have fluctuated over the years: in some years, they have fallen well below their allocation; in others, they have reached the maximum allotted. Immigrant admissions under the EB-5 category were relatively low in FY2020 (3,966) and FY2021 (2,635) during the COVID-19 pandemic, down from 9,082 in FY2019 (see Figure 3). Admissions increased to 10,885 in FY2022, on par with pre-pandemic levels. New applications for the EB-5 program, however, remain low relative to recent years.

Some lawmakers, investors, and industry stakeholders representing a variety of perspectives on EB-5 have held long-standing concerns about the program and its operations. These include uncertainty and unpredictability of the Regional Center Program, which must periodically be reauthorized by Congress; TEA gerrymandering; instances of fraud in the EB-5 program; visa availability; and application processing times.

In recent years, EB-5 program requirements had been in flux. A 2019 federal regulation made the most substantive modifications to the EB-5 program since the Regional Center Program was introduced, including increased investment thresholds. However, a 2021 federal court decision vacated the rule and the program reverted to its previous requirements. Also in 2021, authorization for the Regional Center Program expired and the program remained lapsed for nearly nine months.

In March 2022, Congress passed the EB-5 Reform and Integrity Act of 2022 (RIA), marking the first major EB-5 legislation enacted in three decades. The legislation codified the Regional Center Program in the INA and reauthorized it for five years; established visa set-asides for investments in rural areas, high-unemployment areas, and infrastructure projects; set new investment requirements tied to inflation; codified new requirements for TEA designations; implemented new fees; and introduced new oversight measures.

EB-5 Investor Program Requirements

There are three primary elements to EB-5 program requirements: (1) the investment of capital (2) in an NCE (3) that results in job creation. Investors have two available pathways to gain LPR status through the EB-5 visa: the standalone pathway and the Regional Center Program. As noted previously, the overwhelming majority of investors invest through the Regional Center Program. Both pathways require the same investment threshold and job creation level. The primary differences between these pathways are the measure of job creation and the role of the investor in the enterprise. In both pathways, most investors choose to invest in TEAs, which require lower minimum investments.

Investment of Capital

Capital is the investor's "cash and real, personal, or mixed tangible assets" valued at fair market value in U.S. dollars.⁶ Capital must be owned and controlled by the investor or held in a trust to which they maintain unrestricted access and it must be acquired through lawful means. The entire capital investment must be at risk for the purpose of generating a return.⁷ The investment in the NCE must be continuously maintained during the sustainment period, which consists of the investor's two years of conditional LPR status.⁸

Prior to the RIA, minimum investment requirements had remained unchanged from the 1990 legislation—$1 million or $500,000 in a TEA—until a 2019 federal regulation increased them to $1.8 million or $900,000 in a TEA.⁹ However, when that rule was vacated by a federal district court in June 2021, the amounts reverted to those in place prior to 2019.¹⁰

The RIA subsequently codified increased investment amounts, though to a smaller extent than the 2019 regulation. Under the law, for petitions filed on or after March 15, 2022, applicants must invest in an NCE a minimum of $1,050,000, or $800,000 in a TEA or infrastructure project.¹¹ The new amounts reduce proportionally the discount for TEA investments from 50% to 24% from the original amounts. Additionally, the law now requires that both investment amounts be adjusted for inflation, as measured by the Consumer Price Index for All Urban Consumers (CPI-U), every five years.

The RIA also changed the designation process for TEAs. Previously, state-level officials could designate TEAs. There were widespread concerns that the census tracts combined to create TEAs were gerrymandered, or deliberately manipulated, so that projects in wealthy areas could reach the qualifying unemployment rate.¹² For example, for some projects located in affluent neighborhoods, TEA designations—which qualify investors for the lower investment amount—relied on pairing those projects' census tract with adjacent, economically distressed ones. These concerns were addressed in the now-vacated modernization rule, which had implemented a change requiring that only DHS could designate TEAs and specified that only census tracts related to EB-5 projects could be included in groupings.¹³ The RIA implemented a similar requirement.

A New Commercial Enterprise (NCE)

An NCE is generally one established after November 29, 1990.¹⁵ The law defines an NCE as "any for-profit organization formed in the United States for the ongoing conduct of lawful business," and includes the following business forms:

• sole proprietorship,
• partnership (whether limited or general),
• holding company and its wholly owned subsidiaries (provided that each subsidiary is engaged in a for-profit activity formed for the ongoing conduct of a lawful business),
• joint venture,
• corporation,
• business trust, and
• limited liability company.¹⁶

Investors must submit evidence that they are or will be engaged either in the "day-to-day" management of the NCE or in "policy formulation" (e.g., the investor shows evidence that he/she is a limited partner in a limited partnership agreement).¹⁷

Job Creation

Qualifying investments in an NCE must create a minimum of 10 full-time jobs.¹⁸ Depending on the type of investment (standalone or regional center), these may be a combination of direct jobs, indirect jobs, and induced jobs.

Direct jobs are those created directly by the NCE (i.e., there is a direct employer-employee relationship between the NCE and the employee). Investors using the standalone pathway (non-regional center investments) must create direct jobs.

Indirect jobs are jobs held outside of, but created as a result of, the NCE; for example, as a result of the project's spending on goods and services from suppliers in the geographic region. Indirect job creation must be calculated using "reasonable methodologies" such as economic models.¹⁹ Under the RIA, regional center investors may meet up to 90% of the job creation requirement through indirect jobs (the remaining 10% must be direct jobs).²⁰ Entities that receive and create jobs through capital received from regional center NCEs are referred to as job-creating entities (JCEs).

Induced jobs are a type of indirect jobs created from personal spending on consumer goods and services by direct and indirect employees. Regional center investors may count such jobs using reasonable methodologies. These jobs may be located outside the geographic boundaries of the regional center.²¹

If an immigrant invests in a troubled business, either directly or through a regional center, they may show preservation of jobs for at least two years, in lieu of creating new jobs.²²

Regional Center Program²³

Regional centers are intended to provide a coordinated focus of foreign investment on a particular project or projects by pooling investments across multiple investors²⁴ (see section entitled "What is a Regional Center?" for a detailed discussion). In order to receive investment from EB-5 immigrants, a regional center must be designated as such by USCIS.

The Regional Center Program differs from the standalone program in three ways. First, although both pathways require individual investors to create at least 10 jobs, in the regional center context, as described above, 90% of those jobs may be indirect. Second, unlike with the standalone EB-5 program, foreign nationals investing in a regional center are unlikely to be involved in the management and daily activities of the commercial enterprise. Third, the standalone EB-5 program is permanent, while the Regional Center Program must be reauthorized.²⁵

Foreign nationals may invest in any of the regional centers currently approved by USCIS to qualify for conditional LPR status.²⁶ Although a regional center does not have to be in a TEA, almost all foreign nationals applying for EB-5 status invest with regional centers whose defined boundaries constitute a TEA.

In recent years, reauthorization of the Regional Center Program had occurred primarily through short-term continuing resolutions, typically in consolidated appropriations bills, leading to uncertainty for regional center investors.²⁷ On June 30, 2021, authorization for the Regional Center Program expired and remained lapsed for nearly nine months, during which time USCIS did not process pending applications and rejected new applications associated with regional center investments.²⁸

In March 2022, the RIA repealed the original pilot program and reauthorized the Regional Center Program through September 30, 2027, by amending Section 203(b)(5) of the INA (8 U.S.C. §1153(b)(5)), and implemented new program requirements.

What is a Regional Center?

A regional center is "any economic unit, public or private, which is involved with the promotion of economic growth, including increased export sales, improved regional productivity, job creation, and increased domestic capital investment."²⁹ More simply, the term regional center refers to an entity (often a limited partnership or a limited liability corporation) where investment from multiple foreign nationals and non-EB-5 investors (e.g., U.S. citizens) can be pooled to fund a broad range of projects.³⁰ Regional centers must "operate within a defined, contiguous, and limited geographic area ... with the purpose of concentrating pooled investment" within that area.³¹

Regional centers can be privately owned, publicly owned (operated by a city, county, state, or economic development agency), or a public-private partnership.³² There are many different models for regional centers. For example, in the lending model, the NCE is a lending entity that provides loans to a JCE seeking funding for business activities, such as new construction or expansions of their operations. Regional centers can also use an equity model, where pooled EB-5 investments are used to purchase equity stakes in a project company (i.e., job-creating entity). In addition, regional centers have been created for direct investment to build a variety of projects, such as hotels, a ski resort, convention centers, arenas, and retail and mixed use developments. Certain state³³ and local governments have also established their own regional centers or public-private partnerships (e.g., City of Dallas Regional Center and Philadelphia Authority for Industrial Development).

Since the inception of the Regional Center Program in 1992, the number of USCIS-approved regional centers has increased substantially across the United States. In FY2007, there were 11 approved regional centers.³⁴ As of April 2023, there were 640 USCIS-approved regional centers.³⁵

The proportion of immigrant investors using regional centers, specifically those in a TEA, has been increasing, especially since FY2007. Since FY2008, immigrants investing in regional centers and their family members (derivatives) have represented by far the largest proportion of EB-5 visas issued and adjustments of status, representing 94% over the last five fiscal years of available data (FY2017-FY2022; see Figure 3 below).

Regional Center Designation

The RIA introduced new requirements for regional center designation by USCIS. Regional centers seeking USCIS designation must file Form I-956, Application for Regional Center Designation, and submit proposals that describe the defined, contiguous, and limited geographic area of the regional center; how the pooled investments will promote economic growth in that area; the jobs that will be created directly or indirectly; the amounts and sources of capital that have been committed to the regional center; policies and procedures to monitor NCEs and JCEs and ensure program compliance; and information about all persons involved with the regional center.³⁶ The proposal must also establish that the regional center will have a "substantive economic impact" on the regional or national economy and be supported by valid forecasting tools. The filing fee for Form I-956 is $17,795.

Once designated, regional centers must submit a project application for each investment offering through an NCE, using USCIS Form I-956F, before an investor files a petition associated with that project. Each project application must include a business plan, a "credible economic analysis" showing estimated job creation, documents filed with the Securities and Exchange Commission (SEC) or state securities regulators, all investment and offering documents, and policies and procedures that demonstrate compliance with applicable securities laws.³⁷

Regional centers must demonstrate ongoing eligibility for USCIS designation each year by providing evidence of continued promotion of economic growth and filing a Regional Center Annual Statement, Form I-956G. Under the 2022 legislation, regional centers must pay annual fees to fund the EB-5 Integrity Fund (see the "EB-5 Reform and Integrity Act of 2022 (RIA)" section below). Regional centers with 21 or more investors must pay an annual fee of $20,000; the fee is $10,000 for those with 20 or fewer investors. USCIS may terminate a regional center's designation if it fails to submit the required information or demonstrate continued promotion of economic growth, does not pay the required annual fee, does not consent to an audit, or violates certain other requirements.³⁸

The EB-5 Petition Process

The EB-5 petition process requires various steps before an individual can obtain full (i.e., unconditional) LPR status. The first step of the process is filing USCIS Form I-526, Immigrant Petition by Standalone Investor, or I-526E, Immigrant Petition by Regional Center Investor, and paying the $3,675 filing fee.⁴⁵ The petitioner must prove that he/she meets the requirements for EB-5 classification, including that the capital has been or is in the process of being invested, the capital was obtained by lawful means, and he/she has presented a valid business plan or showed that the investment will go to a USCIS-approved regional center.

Once USCIS approves the I-526/I-526E, the foreign national must obtain a visa from the Department of State (DOS) to enter the United States if they are not currently in the country, or adjust status⁴⁶ to conditional permanent residence with USCIS if they are.⁴⁷ Most EB-5 investors and their derivatives are admitted from outside the United States.⁴⁸ Individuals not in the United States file Form DS-260, Immigrant Visa and Alien Registration Application, with DOS and individuals within the United States file Form I-485, Application to Register Permanent Residence or Adjust Status, with USCIS. At this stage, DOS and USCIS also check that the foreign national is not inadmissible under the INA's grounds of inadmissibility.⁴⁹ Those who adjust status within the United States receive their conditional residence once the I-485 is approved. Those who receive a visa from DOS receive their conditional residence once they are admitted into the United States. Under the RIA, if a visa is immediately available to the investor, he/she may file concurrently the I-526 and I-485.⁵⁰

An investor can petition to remove the conditional status after approximately two years by filing Form I-829 Petition by Investor to Remove Conditions on Permanent Resident Status.⁵¹ Form I-829 requires a $3,750 filing fee and $85 biometric fee.⁵² The investor must submit evidence that he/she has invested the required capital,⁵³ sustained the investment during their U.S. residence,⁵⁴ and that the NCE has created or is expected to create the required jobs.⁵⁵ If the I-829 is approved, the conditionality on the residency of the immigrant investor and his/her derivative family members is removed.

I-526 Petition Trends

After being largely underutilized in its early years, the EB-5 program grew in the wake of the 2008 financial crisis, which increased demand for EB-5 capital as an alternative funding source, particularly for real estate development projects.⁵⁶ Filings of Form I-526 (investor petitions) remained high through FY2017, and then dropped substantially through FY2022 (Figure 1), likely reflecting impacts from increased investment amounts under a now-vacated federal regulation (see the "EB-5 Immigrant Investor Program Modernization Regulation" section below), long processing times, uncertainty regarding the Regional Center Program, and the COVID-19 pandemic.

Figure 1. Forms I-526 and I-526E Received and Pending with USCIS, FY2013-FY2022

Source: DHS, USCIS, "All USCIS Application and Petition Form Types," multiple years. Note: The I-526E petition for regional center investors was introduced following passage of the RIA; previously, all investors used the I-526.

Until recently, Chinese nationals have driven new applications for the EB-5 program (Figure 2). In FY2013, Chinese nationals represented approximately 84% of I-526 petitions filed with USCIS. Chinese nationals' filings declined substantially in FY2018, to 38% of filings, driving a general decline in participation as USCIS proposed major changes to the program via regulatory action (see the "EB-5 Immigrant Investor Program Modernization Regulation" section below). Filings by Chinese nationals declined to 2.5% of the total in FY2022.

In recent years, USCIS has been under scrutiny for its backlogs of pending petitions, including EB-5 petitions.⁵⁷ USCIS experienced a growing backlog of pending I-526 petitions through FY2017 (Figure 1), which then declined after the IPO restructured and hired more personnel. Pending petitions increased again between FY2019 and FY2020, then declined approximately 14% from FY2020 to FY2021 during the Regional Center Program lapse. Pending petitions have generally plateaued since FY2021, even though filings have declined substantially in recent years.⁵⁸ As of the second quarter of FY2023, 12,819 Forms I-526/I-526E were pending with USCIS.⁵⁹

USCIS publishes processing times covering six-month periods that show the mean time it took to complete 80% of petitions that were adjudicated during that six-month period.⁶⁰ For Form I-526, these include 56 months for all nationals other than those from China, and 85 months for Chinese nationals.⁶¹ USCIS historical processing data for the I-526 show a steady increase in median processing times from FY2018 (18 months) to FY2023 as of August 2023 (50 months), despite a general decline in filings during that period.⁶²

In recent years, USCIS has experienced processing backlogs for a range of immigration benefits, resulting from insufficient staffing and impacts from the COVID-19 pandemic.⁶³ The agency has responded with backlog reduction strategies.⁶⁴ For example, for Form I-526, USCIS is using a "visa availability approach" that prioritizes processing for investors for whom a visa is already available or will be available soon.⁶⁵

The RIA instructed USCIS to complete a fee study by March 2023 to determine how adjusting fees would allow the agency to complete applications more efficiently.⁶⁶ Separately, in 2023 the agency published a proposed rule with proposed changes to its general fee schedule that included several EB-5 fee increases. Among them, it proposed increasing filing fees for Form I-526/526E by 204%, Form I-829 by 154%, and Form I-956 by 168%.⁶⁷

Figure 2. Form I-526 Filings by Country, FY2013-FY2022

Source: Data provided to CRS by USCIS on July 6, 2023.

EB-5 Admissions

Each year, approximately 10,000 EB-5 visas are available for investors and their spouses and unmarried children under age 21.⁶⁸ From FY2003 to FY2005, the number of EB-5 visas issued grew five-fold (from 64 to 346), and then increased by seven-fold by FY2010 (to 2,480). As mentioned previously, the program grew in popularity after 2008, when U.S. financial crisis reduced the availability of commercial lending funds and made EB-5 an attractive alternative funding source.⁶⁹

Annual EB-5 admissions rose above 10,000 for the first time in FY2014 and again in FY2015, and remained just under 10,000 each year from FY2016 to FY2019 (Figure 3). Admissions dropped substantially in FY2020 and FY2021, likely reflecting impacts from the COVID-19 pandemic—which interrupted consular processing of immigrant visas abroad⁷⁰ and led to substantial USCIS processing backlogs⁷¹—and the 2021 lapse in authorization for the Regional Center Program, during which time USCIS paused processing EB-5-related petitions.⁷² In FY2022, admissions under the EB-5 category rebounded to 10,885.⁷³ For several years, the vast majority of immigrants admitted under the EB-5 category were regional center investors, including 94% of those admitted in FY2022.

Figure 3. Immigrant Investor (EB-5) Admissions by Pathway, FY2003-FY2022

Source: FY2013-FY2021: DHS, Yearbook of Immigration Statistics, Table 7, multiple fiscal years. FY2022: Department of State, Report of the Visa Office, Table V, Part 3. Notes: Includes principal investors and derivative family members (spouses and children). DHS Yearbook tables have some missing values within standard and regional center pathways, therefore, sums presented may fall short of actual admissions.

Nationals from a relatively small set of countries dominate participation in the EB-5 program. Due to 7% per-country limits under the INA,⁷⁴ the EB-5 category tends to be oversubscribed for nationals from China and India, meaning that foreign nationals from those countries who have been approved for a visa must wait for a visa number to become available. As of March 2023, 20,936 approved petitions from Chinese nationals and 1,133 from India were awaiting visa availability.⁷⁵

The INA contains an exception to the 7% per-country limit if the total number of available employment-based visas exceeds the number of immigrants eligible for those visas in a given year. In such cases, individuals from oversubscribed countries may receive more than 7% of visas.⁷⁶ In FY2022, nationals from China, India, and Vietnam comprised more than three-quarters of EB-5 admissions, with China alone representing 56.3% of all admissions. Table 1 below shows the number and percentage of admissions in FY2022 for the 10 countries with at least 100 EB-5 admissions. Even though Chinese nationals are filing fewer I-526 petitions (Figure 2), many have already been waiting in the queue for a numerically limited visa number to become available; therefore, their admissions under the program remain high relative to other nationals.

Economic Impact

Congress created the EB-5 visa category to increase investment and job creation in the U.S. economy. However, a lack of data has impeded comprehensive, longitudinal analyses of the program's economic impact and job creation, especially at the local level.⁷⁷ In 2013, the DHS Office of Inspector General (OIG) raised concerns⁷⁸ about the validity of USCIS estimates of economic impact.⁷⁹ In response to the OIG's recommendation, USCIS commissioned an economic impact study by the Department of Commerce Economics and Statistics Administration.

Published in 2017, the study examined EB-5 investor projects during FY2012 and FY2013. It identified $16.7 billion in total investment spending, of which $5.8 billion was generated by approximately 11,000 EB-5 immigrant investors (about $521,405 per investor, indicating that most had invested in TEAs at the discounted amount).⁸⁰ An estimated 174,039 jobs were generated through EB-5 related projects during this period—this included jobs generated with non-EB-5 investment spending. Most investment spending and jobs were generated through regional centers.⁸¹

Additional studies of economic impact have been published by stakeholder groups and other organizations not affiliated with the federal government.⁸² A 2019 economic impact study commissioned by two advocacy groups, the EB-5 Investment Coalition and Invest in the USA, examined projects during FY2014 and FY2015.⁸³ The study identified approximately $11 billion in capital investment through the Regional Center Program, which represented 2% of foreign direct investment in the United States during that period. Two-thirds of Regional Center Program investments were in the construction sector. Other sectors receiving these investments were hotels and motels; real estate; wholesale trade; architecture, engineering, and related services; and health care. Investments supported an estimated 355,200 jobs.

Although these studies have identified substantial capital investments, the EB-5 program has been scrutinized for the high proportion of investments that have gone to projects in affluent, urban areas,⁸⁴ including those made at the discounted rate for TEAs.⁸⁵ More recently, Congress tightened TEA requirements for high-unemployment areas (see the "EB-5 Reform and Integrity Act of 2022 (RIA)" section and Table 2 below). There are mixed findings in the scholarly literature on the impacts of EB-5 projects: some studies find that the program leads to urban revitalization in distressed areas⁸⁶ while others argue that it displaces residents in working-class communities of color.⁸⁷

Fraud and National Security Oversight within EB-5

Some Members of Congress and other observers have long expressed concerns about instances of fraud in the EB-5 program.⁸⁸ Reports by the Government Accountability Office (GAO) have identified two general types of fraud within EB-5: (1) immigration benefit fraud committed by visa applicants, by which foreign nationals obtain visas through the EB-5 category based on fraudulent information or misrepresentation, including document fraud and identify fraud; and (2) the defrauding of "good-faith" foreign national investors by third parties associated with regional centers, NCEs, or JCEs.⁸⁹

Multiple government entities and law enforcement agencies monitor the EB-5 program for fraud, misconduct, and national security concerns. Within DHS, these include USCIS's Fraud Detection and National Security Directorate (FDNS) and Immigration and Custom Enforcement's (ICE's) Homeland Security Investigations. Outside DHS, entities include the Department of State, the SEC, the Federal Bureau of Investigation, and the Department of the Treasury's Committee on Foreign Investment in the United States.⁹⁰

In a 2023 report, GAO acknowledged RIA provisions that address certain concerns about fraud, including codifying DHS's authority to deny or revoke EB-5 petitions predicated on fraud or misrepresentation and to terminate or sanction regional centers (see the "EB-5 Reform and Integrity Act of 2022 (RIA)" section below).

The report specifies a number of steps taken by IPO and FDNS to address risks of fraud in the immigrant investor program in recent years, including conducting fraud and national security assessments, establishing a Compliance Division to review regional centers' compliance with program requirements, conducting site visits to NCEs and JCEs, and sponsoring fraud and national security trainings.

GAO's analysis also identified certain shortcomings with regard to national security and fraud. For example, GAO's analysis of USCIS data found that although the agency documented a general increase in national security concerns associated with the program from FY2016 through FY2021, it did not have readily available data on fraud or national security trends, such as specific reasons for denying petitions or terminating regional centers.⁹¹

For years, lawmakers concerned about instances of fraud and national security risks in the program called for legislative reforms to it, and, in some instances, for termination of EB-5.⁹²

EB-5 Immigrant Investor Program Modernization Regulation

Prior to the RIA in 2022, the most significant changes to the EB-5 program in decades were made by executive action under the now-vacated DHS EB-5 Immigrant Investor Program Modernization regulation.⁹³ The regulation, proposed in January 2017 and implemented in November 2019, represented the most substantial overhaul to the EB-5 program since Congress introduced the Regional Center pilot program in 1992. It

• increased minimum capital investment amounts from $1 million, or $500,000 in a TEA, to $1.8 million, or $900,000 in a TEA;
• removed states' authority to designate areas of high unemployment as TEAs; and
• allowed applicants to retain priority dates of approved I-526 petitions for a subsequent application (e.g., if the investor's application was approved but the regional center in which they invested was terminated for reasons outside their control).

In December 2020, the Behring Regional Center, LLC, sued DHS alleging in part that then-Acting Secretary Chad Wolf had been improperly appointed and, therefore, the rule was in violation of the Administrative Procedure Act (Behring Regional Center, LLC v. Wolf et al.). On June 22, 2021, the U.S. District Court for the Northern District of California granted plaintiffs' motion for summary judgement and vacated the rule. As a result, as of that date, the regulations that were in place before November 19, 2021, went back into place. USCIS initially appealed the decision but later withdrew its appeal.

EB-5 Reform and Integrity Act of 2022 (RIA)

In March 2022, Congress passed the RIA within the Consolidated Appropriations Act, 2022 (P.L. 117-103, Division BB).⁹⁴ Legislative reform to the EB-5 program had long been awaited by many lawmakers, industry stakeholders, and other observers, particularly after the 2019 modernization rule was vacated and the Regional Center Program lapsed for an extended period in 2021.⁹⁵

The table below outlines some of the major changes made by the RIA, some of which were discussed previously in this report, and compares them with the provisions in place prior to the RIA (note that the table does not account for changes made under the modernization rule, which was vacated).

Regional Center Oversight Provisions

The RIA enacted several new oversight measures for the Regional Center Program. The legislation repealed its former authorizing provision, Section 610 of the Departments of Commerce, Justice, and State, the Judiciary, and Related Agencies Appropriations Act, 1993 (P.L. 102-395). It codified the Regional Center Program in INA Section 203(b)(5)(E) and authorized it through September 30, 2027.

The legislation established the EB-5 Integrity Fund, comprised of 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 with immigration laws, and conducting regional center audits (every five years) and site visits (for each new NCE or JCE).

The RIA also requires that

• DHS audits each regional center at least once every five years;
• DHS conducts at least one site visit to each NCE or JCE;⁹⁶
• regional centers submit a comprehensive business plan, a credible economic analysis showing estimated job creation, and other financial and policy documentation prior to any individual investor's application based on that regional center; and
• regional centers submit annual statements indicating their compliance with program requirements and accounting for collected fees.

The legislation established requirements for record keeping, fund administration, and annual statements and sets rules and standards for third-party promoters of a regional center, NCE, or JCE, who must now register with USCIS. DHS may sanction regional centers that fail to submit annual statements, submit fraudulent statements, or deviate from their business plans in a manner that violates their designation under the law. The RIA authorizes DHS to establish sanctions including fines, temporary suspension from program participation, permanent bars from program participation, and terminating regional center designations. It forbids the involvement in regional centers of persons who have committed fraud or certain other criminal offenses, persons who are not U.S. nationals or LPRs, and foreign governments.