It’s time for Congress to allow EB-5 to reach its full potential by creating a permanent version of EB-5’s most successful initiative.
Since 1990, the EB-5 Immigrant Investor Program has stimulated the U.S. economy by attracting investment from foreign nationals seeking permanent residency in the United States. By investing in job-creating business enterprises, these investors can pursue new lives in America while also impacting American communities.
The most popular method for investing in EB-5 is through the Regional Center Program, where investor funds are pooled for deployment into large-scale projects. Though the Regional Center Program attracts the vast majority of EB-5 investment, it technically isn’t a permanent part of the program, requiring periodic reauthorization by Congress to continue functioning.
When these temporary authorizations expire, the industry comes to a standstill, as investors can no longer put their capital toward job-creating projects. That’s what happened in 2021, until the EB-5 Reform and Integrity Act of 2022 (RIA) reauthorized the Regional Center Program for five years, through September 30th, 2027.
As we have in the past, JTC is working with industry leaders to educate lawmakers and the public about the benefits of EB-5 and why the Regional Center Program should be reauthorized beyond 2027. Another short-term renewal would help us avoid another lapse, but what the industry really needs is a permanent version of the Regional Center Program.
The Regional Center Program has existed long enough to prove its worth. Now that we know just how integral it is to the documented success of EB-5, it’s time for it to be reauthorized for good. As we make this case to lawmakers, here are just a few of the reasons the Regional Center Program deserves permanent reauthorization by Congress.
Clear demand among investors and project developers
The dormant period that preceded the passage of the RIA was long enough to have a significant impact on EB-5 stakeholders. There were legitimate questions as to whether the uncertainty brought on by this period of inactivity, combined with skyrocketing filing fees and increased compliance requirements, would cause developers and Regional Center operators to leave the industry, or if investors would shy away from the program because of increased minimum investment amounts.
Instead, the opposite has happened. Since the RIA’s passage, over $4 billion has been invested through the EB-5 Immigrant Investor Program, mostly through Regional Centers. I-526E filings have already returned to pre-pandemic levels. Reports have also shown hundreds of pending Regional Center and project applications, which should lead to even more investor petitions once those projects hit the market.
Investors from China and India are taking advantage of the expedited processing times for petitions in reserved visa categories, with more than $874 million already committed to rural projects and $1.7 billion to projects in urban high-unemployment areas. EB-5 isn’t some out-of-date program, and investors aren’t discouraged by the high minimum investment amounts. They want to participate in EB-5.
The newest version of the program is just getting started
If you looked at the data from 2022, you might have concluded that EB-5 had failed to recover from the pre-RIA period of inactivity. But that’s because it took time for the industry to navigate the ambiguities of the new law.
After the RIA was passed, clarification from USCIS was slow. Guidance on some points, such as the two-year sustainment period, wasn’t published until more than a year after the law was enacted. There are still legal issues surrounding certain aspects of the law that have yet to be resolved. It’s taken the industry and USCIS some time to adapt to the new era of EB-5, but as recent data shows, the lackluster period didn’t last long. In fact, FY2024 saw more visas issued than in any year in EB-5’s history.
There was an especially sharp learning curve for rural projects, which are guaranteed 20% of EB-5 visas under the RIA. Regional Centers had to learn how to evaluate and market rural projects, which have seen significant investor demand because of priority processing, but come with their own unique challenges. Set-aside visas have proven so popular that many in the industry see these categories filling up in the future.
Direct investment alone can’t meet EB-5 demand
Without the Regional Center Program, investors could still participate in EB-5 via direct investment. With direct investment, a foreign national can invest individually – without pooling capital with other investors – in a job-creating project. But with direct investment, induced or indirectly-created jobs can’t be counted, making it more difficult to meet the job-creation requirements.
It can also be difficult for immigrant investors, especially those with little experience in business – let alone business in the U.S. – to evaluate the viability of potential direct projects or to be actively involved in their operation. Based on what we saw during the pre-RIA lapse, it’s simply impossible to think that there could ever be enough direct EB-5 opportunities to meet investor demand.
That’s why the Regional Center Program was created: investors needed an easier way to find projects that could reliably create jobs. Given that 95% of all EB-5 investment comes through Regional Centers, it’s clear this is how immigrant investors want to participate in EB-5.
With a Regional Center investment, direct, indirect, and induced jobs can be counted; and with pooled investment, the types of institutional-quality development projects that create a large number of good jobs become available to EB-5 investors. Regional Centers can also help with oversight, compliance, and due diligence, things that can be difficult for investors because of distance or language barriers.
A good Regional Center can help investors avoid bad projects, get the information they need for their petitions, and ensure compliance with the RIA. These investors are putting significant amounts of capital at risk because they want to be a part of American life. We should give them the ability to invest in the best projects possible, and the Regional Center Program does that.
Other visa programs are insufficient
There are other routes foreign nationals can take in order to live in the United States, such as non-immigrant visas like the F-1 student visa or the H-1B program. But both of these restrict a visa holder’s ability to work or travel, and the H-1B program is so competitive that less than 15% of 2024 applicants successfully obtained a visa.
These programs limit the types of commerce an applicant can engage in while not offering a direct path to a green card for immigrants and their families. EB-5 is the best shot many individuals have at achieving their dream of settling in the United States permanently, and the Regional Center Program is a clear way for them to successfully reach that goal.
EB-5 benefits American communities
According to IIUSA, the EB-5 industry’s non-profit association dedicated to promoting the Regional Center Program, in FY2023, USCIS received 2,431 I-526E petitions. If each of those petitions involved the creation of 10 jobs (a conservative estimate, since some projects create more than the minimum), that means at least 24,310 jobs are being created by the Regional Center investments made in a single year.
That’s 24,310 jobs filled by American workers, supporting American families. These projects happen in American communities, and because of the incentives for rural projects and those in urban high-unemployment areas, many EB-5 projects are in distressed areas in need of revitalization.
EB-5 creates jobs and puts billions of dollars toward the areas of the country that need it most, all at no cost to American taxpayers. The Regional Center Program helps people who want to live out the American dream to pursue new lives in the United States while aiding their new country through crucial investments that stimulate the economy and create jobs.
Lapses hurt investors and the industry
As we’ve shown, there are plenty of individuals who want to make investments through the Regional Center Program. But during the nine-month period without authorization in 2021-2022, investors were denied that opportunity, and the U.S. lost out on investment and jobs at a time when the country sorely needed them.
To avoid another lapse, we in the industry have to spend a lot of time proving EB-5’s worth to Congressional leaders. Forcing us to do this every few years is a waste of everyone’s time when the value of the Regional Center Program should be obvious by now.
We saw how long it took after the RIA for the industry to get back to full strength. If we have another lapse followed by another temporary reauthorization with new parameters, we will be forced to endure another slow period. Even though we’ve gotten five years this time, the first couple years were spent seeking clarity on the new rules and adapting to the new realities of the business. And since only petitions filed by September 30th, 2026, will be guaranteed adjudication if the program is not reauthorized, the final year will be filled with uncertainty. Suddenly, that five years doesn’t seem like much time at all.
It’s also hard to plan ahead when the program is only temporary. How can Regional Center operators invest in their businesses or plan future long-term projects if their industry might come to a standstill before they can finish them? Investors are putting their capital into projects without knowing whether or not the program will exist by the time that capital is returned. This adds unnecessary stress for petitioners already taking on substantial risk.
For immigrant investors and U.S. communities to get the full benefit of the Regional Center Program, we need Congress and USCIS to stop implementing unnecessary hurdles. Too much time is spent adapting to each new version of the program, trying to get information out of USCIS, educating lawmakers about the positive effects of EB-5, and advocating for renewal, knowing we have to do it all again before the next sunset date.
The RIA has helped the program reach new levels of sophistication
While lawmakers may have some reservations about EB-5, those are largely based on outdated information. The RIA helped eliminate much of the fraud and abuse of investor trust that marred the reputation of the program, and reserved visas are helping to guide investment toward areas of the country that need it most. Concurrent filing of Adjustment of Status is allowing applicants from retrogressed countries who are already living in the United States to transition from H-1B or F-1 visas to EB-5, opening up new avenues to continue living in the U.S. while pursuing business opportunities.
By most metrics, the RIA has been a resounding success. Despite the challenges that come with EB-5 investment, the program is popular because it works for investors and for project developers. The Regional Center Program is what allows EB-5 to uplift American communities by providing jobs at no cost to taxpayers. A permanent version of the Regional Center Program will mean the country can continue reaping the benefits of EB-5 without unnecessary interruption.
JTC is heavily involved in efforts to make EB-5 even better and educate lawmakers about the importance of the Regional Center Program. Whether advocating for legislation to improve EB-5, bringing together industry leaders to share ideas, educating investors on how to find quality projects, or improving security and transparency through our commitment to best practices, JTC is determined to forge a new future for EB-5. If you care about creating American jobs, investing in American communities, and welcoming foreign nationals who are passionate enough about living in the United States that they’re willing to risk their savings to obtain an EB-5 visa, then you should join the fight for the permanent reauthorization of the EB-5 Regional Center Program.
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