EB-5 Investments are a popular way of raising capital for franchise expansion. So it came as a bit of a shock last week the EB-5 Program was rocked by two major developments.

EB-5 Modernization Rule Struck Down (For Now)

On June 22, 2021, Magistrate Judge Jaqueline Scott Corley from the U.S. District Court for the Northern District of California ruled that the EB-5 Modernization Final Rule was not lawfully promulgated because the former-acting Department of Homeland Security Secretary Kevin McAleenan was not properly serving in his position. As a result, the November 21, 2019 regulations have been vacated thereby reinstating the EB-5 minimum investment amount for TEA investments, temporarily, to $500,000.

It is unclear how long the lower investment amounts will last. It is possible that Department of Homeland Security will appeal the decision and it is likely Secretary Mayorkas will seek to finalize the regulations. Until then, the earlier investment amounts of $500,000 for TEA investments and $1 million for non-TEA investments remain in place. Potential EB-5 investors should review the benefits and risks associated with filing an I-526 after this order. There are a number of considerations worth discussing with immigration counsel.

EB-5 Regional Center Program Not Authorized (Yet?)

The EB-5 Regional Center Program will expired at midnight June 30, 2021, because Congress has not reached an agreement on reauthorization.

An attempt by Senators Chuck Grassley and Patrick Leahy to pass the EB-5 Reform and Integrity Act of 2021 was blocked by Senator Lindsay Graham. Despite the lapse, it is expected negotiations will continue although there is much uncertainty surrounding the timing and outcome of the negotiations. It is important to note the lapse in authorization does not affect EB-5 petitions filed by EB-5 investors seeking benefits outside the Regional Center Program.

Today, U.S. Citizenship and Immigration Services (USCIS) issued guidance on how the agency will handle EB-5 Regional Center filings during the lapse:

• Form I-924, Application for Regional Center Designation Under the Immigrant Investor Program: USCIS will reject Form I-924 applications received on or after July 1, 2021 except when the application type indicates that it is an amendment to the regional center’s name, organizational structure, ownership, or administration. USCIS will place any pending applications as of July 1, 2021 on hold.
• Form I-526, Immigration Petition by Alien Investor: USCIS will reject Form I-526 petitions received on or after July 1, 2021 when it indicates the petitioner’s investment is associated with an approved regional center. USCIS will place any pending applications as of July 1, 2021 on hold.
• Form I-829, Petition by Investor to Remove Conditions on Permanent Resident Status: USCIS will continue to accept and review Form I-829 petitions, including those filed on or after July 1, 2021. These petitions will not be affected by the expiration of the Regional Center Program.
• Form I-485, Application to Register Permanent Residence or Adjust Status: USCIS will begin rejecting Form I-485 applications and any associated Form I-765, Application for Employment Authorization, and Form I-131, Application for Travel Document, based on an approved Form I-526 associated with an approved Regional Center. The agency will be unable to act on any Form I-485 based on an approved Form I-526 associated with an approved regional center unless the Regional Center Program is reauthorized. Further clarification from USCIS is needed as to how USCIS will handle pending Form I-765 and Form I-131 applications associated with a pending Form I-485.

Additionally, after June 30, 2021, the U.S. Department of State (DOS) will not issue immigrant visas to applicants seeking immigrant visas pursuant to an approved Form I-526 at U.S. consulates abroad.

Ali Brodie blogs about immigration issues at Immigration View, where this information first appeared.

With Ali Brodie

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