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The EB-5 Plays a Significant Role in the U.S. Economic Recovery Despite Recent Changes

Business Immigration | E-5 Direct Investment | Economic Recovery
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Paul Monson

Director & Partner of Joorney Business Plans

The EB-5 Immigrant Investor Program is often referred to as the most flexible immigration program in the world. While it requires a hefty investment, the EB-5 is unique because there are no restrictions based on age, business experience, English-language ability, or country of origin. 

When people think about the EB-5 program, they often think about regional centers – large investment opportunities where multiple foreign investors pool money together to help fund a building, municipal, or other approved project that requires tens or hundreds of millions of dollars, if not more. But EB-5 can also be direct, where individuals invest a sum of money into a new business, or buy a distressed business, and through that can ultimately get their green card and eventually even U.S. citizenship.

The COVID-19 crisis has created unique opportunities for potential EB-5 investors. Unfortunately, businesses across the globe have struggled to stay afloat during these difficult times, but an EB-5 investment can be a win-win for both the investor and the business. An investor can infuse capital into the U.S. in a smaller, more local way, and a business can stay afloat, weather the storm, keep people employed, and contribute to the U.S. economy.

This visa has always been popular, but due to recent changes, the EB-5 has been an even hotter topic than usual!

Here’s everything you need to know about the EB-5 program, including some of the big changes recently and from the past two years. Even in the wake of recent changes, this visa pathway can help small businesses during difficult economic times and, ultimately, aid in the U.S. recovery.

What is the EB-5 Immigrant Investor Program and how did it change?

There are two main types of the EB-5 visas. One of them is the EB-5 Regional Center Program. Although part of the same visa classification, the Regional Center Program was never made permanent and, until recently, had been tied to Congress’ omnibus spending bill. In a nutshell, this means the program was automatically renewed annually when Congress approved a new budget.

All of this changed in December 2020 with the passing of the Consolidated Appropriations Act, 2021. Though this decoupled Regional Center Program from the annual budget, it also extended it through the middle of 2021. Despite hard-pressed efforts from organizations like the IIUSA and the bipartisan EB-5 Reform and Integrity Act, which failed to pass with unanimous consent, the Regional Center program unsuccessfully renewed or rolled into other legislation. This means that it expired on June 30, 2021, and its fate remains uncertain.

While the Regional Center Program makes up more than 95% of all EB-5 investments, there is also a second type of EB-5: Direct Investment. The Direct Investment EB-5 option remains available and was not impacted by the expiration of the Regional Center program.

The Direct Investment EB-5 option has also recently undergone significant, yet potentially temporary, changes. In 2019, USCIS published the EB-5 Immigrant Investor Program Modernization Final Rule. This included an increase in minimum investment amounts from $1 million to $1.8 million and $500,000 to $900,000 in Targeted Employment Areas (TEA), which are rural or high unemployment areas which can benefit the most from EB-5 investment. It’s important to note that these investment minimums applied to both Regional Centers and Direct Investment.

On June 22, this was undone in a U.S. District Court case, Behring Regional Center LLC v. Wolf. The court’s decision was that the rule had been instated improperly and was therefore void. In other words, the investment minimums returned to $900K or $500K for TEA.

USCIS has accepted these changes for now but it is unclear whether they will attempt to issue new rules in the future to restore at least some part of the original rule, including the higher investment amount.

Despite changes, EB-5 can contribute greatly to the economic recovery of the U.S.

Like other visa options, the EB-5 is not a perfect immigration avenue. However, it provides significant value to the economy by attracting foreign investment into new and existing businesses. It also facilitates job creation or retention and, ultimately, has the potential to be a driving force in our post-pandemic economic recovery.

I recently touched on this in my feature in EB5 Investors Magazine Top 5 Business Plan Writers:

“While it’s unfortunate to see the number of distressed businesses that have resulted from the pandemic, it has opened up opportunities for EB-5 investors… It seems several EB-5 investors have been able to find deals on promising businesses while saving jobs that may otherwise be lost. I think EB-5 investors are likely to play a significant role in our economic recovery.”

Joorney is ready to assist with EB-5 applications

While the fate of the EB-5 Regional Center program remains unclear, the Direct Investment option continues to move ahead without interruption and, at least temporarily, at the lower investment amount.

No matter what happens to either of these investor immigration options, Joorney is here to support our partners and their clients with the business documents they need. We are still writing EB-5 direct investments business plans but are able to assist with regional center business plans when – hopefully – the program is reinstated. 

If you’re interested in learning more about how we partner with immigration attorneys or want to get started on your EB-5 project contact us or visit the Joorney website to learn more!

Disclaimer: Joorney is a business plan and document preparation firm focused on immigration – we are not a law firm. This article is meant for informational purposes only and should not be considered legal advice. You should consult a licensed immigration professional to address questions about your specific immigration case or eligibility under the E-2 or any other business immigration program.

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