Sam Silverman, Managing Partner of EB5AN, a national EB-5 visa firm, is involved in assisting foreign investors from over 60 countries to secure permanent residency in the U.S. through the EB-5 Immigrant Investor Program, established by Congress in 1990. This program requires foreign investors to invest a minimum amount in a new commercial enterprise that creates at least ten full-time jobs for U.S. workers in order to qualify for an EB-5 visa.
One of the main requirements of the EB-5 program is that investor funds must be placed “at risk,” meaning there are no guaranteed returns, to ensure that the investment is contributing to the U.S. economy. Silverman emphasizes the importance of staying informed about industry developments, including specific legislative changes such as the recent EB-5 Reform and Integrity Act of 2022 (RIA), and how they impact investors.
The RIA introduced amendments to the sustainment period rule for EB-5 investments, allowing investors to sustain their investments for a minimum of two years without having to wait until the end of their conditional residency period. While this change was welcomed by many investors, it raised questions regarding when the two-year period begins and how it affects pre-RIA investors. The United States Citizenship and Immigration Services (USCIS) provided a policy update to clarify its interpretation of the RIA amendment in late 2023.
Invest In the USA (IIUSA), an EB-5 industry trade association, filed a federal lawsuit against USCIS challenging the new sustainment period policy, arguing that it was implemented without following proper procedures and public input. IIUSA proposed establishing a new five-year sustainment period through formal rulemaking procedures to maintain the program’s integrity. The outcome of the lawsuit could impact investors from backlogged countries, particularly those facing retrogression, as it may require them to keep their investments at risk for a longer period.
To avoid the need for redeployment of funds, Silverman advises foreign investors to choose rural projects with a minimum five-year investment term. These projects typically have lower investment thresholds and benefit from priority processing, reducing the risk of redeployment due to processing delays. Seeking guidance from experienced industry professionals and investing in large real estate development projects that do not solely depend on EB-5 funds can help mitigate risks for investors.
In conclusion, the debate surrounding the investment sustainment period in the EB-5 program remains uncertain, and investors are encouraged to stay informed about statutory regulations to navigate the immigration process smoothly. While the outcome of the IIUSA lawsuit may impact investors, it is essential for them to remain vigilant and seek legal advice if needed to ensure a successful EB-5 investment journey.