EB-5 Reform and Integrity Act of 2022
The EB-5 program inaugurated by Congress was created to stimulate the U.S. economy by offering Immigrant Investors a way to become lawful permanent residents through job creations and capital investments in U.S. businesses. This program, governed by the US Citizenship and Immigration Services (USCIS), grants Canadians conditional permanent resident status for the first two years once the EB-5 Visa is approved. Following the two-year mark and conforming to the regulations of the investment immigration program, investors can apply to have these conditions removed and become an authorized permanent resident in the United States, and after five years, these Green-Card holders may apply for United States citizenship. Another valuable aspect the program offers EB-5 investors, is the opportunity to bring over their spouses, and their children who are under the age of twenty-one. Spouses and children benefit from the same visa status as the principal applicant, allowing them a privileged opportunity to keep their families together.
Petitioning Investors are presented with two avenues to attain an EB-5 visa. They can invest directly into a newly created American business that creates jobs for 10 American citizen. This program is suited for applicants who want to invest in the industry of their choice so long as the business meets the program’s requirements; It also gives the Immigrant Investor better control over the business and its daily operations.
The EB-5 Investor can alternatively invest in a state-authorized Regional Center that merges investments made from several different investors to develop a single project. This path is suitable for investors who prefer a passive investment over an investment which requires overseeing the business’ daily activities. The enticement towards this program is linked to job creations. Through this avenue, the Regional Center is permitted to calculate direct job creations by the EB-5 project as well as the indirect jobs created. As opposed to direct EB-5 investment, which only accounts for jobs created through the business and is exhibited in its payroll records.
Throughout the years, capitalizing in government-approved Regional Center became a favorable way to secure the EB-5 visa. However, this path ended in June 2021 as the program never had permanent authorization and needed to be periodically reinstated by Congress, which they failed to do. Before its expiry, U.S. Senators Chuck Grassley and Patrick Leahy attempted to obtain unanimous approval for their EB-5 reform act that would have reauthorized the EB-5 Regional Center Program until 2023. However, that attempt unfortunately failed.
In March 2022, President Biden signed into law the new EB-5 legislation. Thus, the program’s Regional Center program will now be available through September 30, 2027. The package includes imposing requirements for audits and investigations, reviews, and on-site inspections to reduce the program’s corruption. As such, the judicial authority the Regional Center was previously centered on, has now been repealed and they have created a new Regional Center.
- Grandfathering – if there is a future lapse in the reauthorization of the Regional Center Program, it will protect existing investors who have filed before September 30th, 2026.
- Increase of the minimum investment amount – before the investment amount required for a targeted employment area was USD $500,000 and USD $1,000,000 non-TEA investment. The new required amount for a targeted employment area is USD $800,000 and USD 1,050,000 non-TEA investment. This will also apply when investing directly into a new U.S. company.
- Now, only the Department of Homeland Security can make determination on whether areas are qualified for high unemployment or as infrastructure, which will be effective for 2 years.
- Targeted Employment Area is identified in three aspects: 1) rural area – 2) distressed urban area project, and 3) infrastructure projects.
- Limitations regarding job creations, meaning only a certain number will count – 2,000 for rural, 1,000 for high unemployment, 200 for infrastructure.
- Regional Centers will need to comply with standard requirements; A regional center will be required to file documents related to their development before an Immigrant Investor is permitted to file their I-526.
- Concurrent adjustment of status or subsequent adjustment of status for those in the United States, for I-526 petitions. Which proposes green cards for those who are in the United States, and it allows them to get Employment Authorization Document (EAD) and Advanced Parole whilst their I-526 and I-485 is pending.
- Relocation is now accepted anywhere in the United States, not only within the Regional Center’s vicinity.
- Section 245 (k) INA protection is now in force for EB-5 investors. This allows an Immigrant Investor up to a certain amount of unauthorized employment or out of status that does not prohibit adjustment.
- Child status protection – those who have conditional green card status, and their I-829 denied. The parent can refile and the child who was over 21 can still be considered a child based on that new investment within one year of termination.