Quick recap: The EB-5 Regional Center Program (EB-5 RC) expired in June 2021. The program’s reauthorization is attached to the FY 2022 federal budget bill. FY 2021 ended on September 30 of 2021. Congress failed to reach consensus which led to the first Continuing Resolution (CR) passed in October, and the second passed in December. The 2nd CR is set to expire on February 18th, 2022.
According to the Wall Street Journal, the House of Representatives passed a legislation earlier this week to keep the government funded through mid-March. The 272-162 vote sends the bill to Senate pending for approval. This is an attempt from Congress to avoid the government shutdown that might happen in case that they fail to reach consensus on the fiscal year (FY) 2022 Federal Budget on the February 18th deadline. The three-week Continuing Resolution (CR) will keep the government funded through March 11th. Senate Majority Leader Schumer said Congress is making good progress and he is optimistic that both parties will arrive at a top-line deal for an omnibus bill.
As the Regional Center program is tied to the federal budget bill, this decision has also in turn pushed the reauthorization of the EB-5 Regional Center Program (EB-5 RC) to March 11th. It is crucial to note that it is not unusual for Congress to pass multiple CRs before finally reaching consensus. There is an average of 5 CRs passed each year between FY 1998 to FY 2019. This is a common practice as a way for Congress to push the deadline and get more time to agree on the terms. And again, as previously mentioned, Senator Schumer confirmed that both parties are making good progress towards reaching an agreement. Senator Shelby of the Republican party also said “We’re close” regarding the matter.
SOME POTENTIAL CHANGES WORTH NOTICING FROM INSIDE SOURCES
Reauthorization of EB-5 RC program
EB-5 RC will be reauthorized, and this will last until 2027.
Investment Amounts
$700,000 USD for TEA projects
$850,000 USD for non-TEA projects
Investment amounts will be automatically adjusted in $10,000 increments based on the Fixed Private Investment Index (calculated by the United States Economic Analysis) starting October 2023
Changes in Definitions
Definition of Targeted Employment Areas (TEA)
The original definition of TEA remains the same – either areas of high unemployment or rural areas.
Now the definition also includes “areas within the geographic boundaries of any military installation…based upon a recommendation by a Defense Base Realignment and Closure Commission.” and qualified opportunity zones.
Definition of high unemployment areas
High unemployment areas are limited to 16 contiguous census tracts with a weighted average unemployment rate of at least 150% of the national average.
Additional limitations might also be included.
Reserved Visas for TEA investments
30% of the total annual EB-5 visas will be reserved for qualified foreign investors who invest in projects within TEAs.
2/3 of this amount will be specifically for investments in rural areas.
1/3 of this amount will be either qualified opportunity zone TEAs or high unemployment TEAs comprising not more than two census tracts.
Priority Processing
Priority processing might be passed for projects in rural areas or infrastructure projects.
Regional Centers Regulations
Regional centers must file annual compliance certifications, including statements of compensation paid to agents, finders, broker dealers along with their contracts.
EB-5 Integrity Fund might be established to monitor, investigate and ensure compliance.
This Integrity Fund will be funded by a new annual regional center fee of:
$10,000 for regional centers with more than 20 investors in the preceding fiscal year.
$5,000 for regional centers with at least 1 and less than 20 investors in the preceding fiscal year.
Many of these changes are very close to what we have been reporting thus far. This bill may or may not be introduced to Congress. However, in the case that it is introduced, the changes would most likely go into effect immediately.
Advanced Parole
This will allow investors and their families to land in the U.S. on a temporary visa prior to getting their green cards. This will help investors from countries with retrogression issues. The temporary visas will let investors and their families live, work and study in the U.S. just as if they are green card holders.
We will continue updating you with the latest information.
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