There has been a lot of news about the EB-5 program in the past few days with both the Federal court ruling and activity on Reauthorization in the Senate. We want to be sure you are getting a balanced view.
$500,000 Investment Level
On June 22, 2021, in a ruling in Behring Regional Center, LLC v. Chad Wolf, the US Northern District Court of California ruled that the November 2019 EB-5 Modernization Regulations were not correctly implemented. This Federal court ruling means that any filings after June 22 need to be completed according to the previous regulations which included the $500,000 investment level.
For immigration attorneys and the adjudicators at USCIS, this creates questions that will need to be answered by guidance from USCIS as to how the ruling will be implemented. Until guidance is provided, investors that are interested in filing at the $500,000 level may face a more difficult process as there is a greater likelihood of petitions being returned for more information.
June 30 Sunset & Program Lapse
In the Senate, an effort to pass a Reauthorization of the Regional Center program on June 24 was not successful. There was strong bi-partisan support for new legislation that included added protections for investors, but it was blocked, and there is the need for more negotiation.
This means that on June 30, the program will lapse. We do not expect USCIS to return new applications, but they will stop processing them until Congress reconvenes and passes new legislation, which may well take negotiations through the end of the fiscal year in September.
Implication for Investors & Clients
Clients who have already filed will need to be patient. We expect this lapse will cause added delays, but we do not believe Congress intends to discontinue the program. USCIS should issue guidance shortly on how they plan to manage petitions in each stage of the process.
New investors need to understand that filing at this time is more risky and will most likely require additional legal work as guidance is received. For those that understand these risks and are still interested to invest, LCR has worked with RPC, the project developers for the Legacy Hotel & Residences in Miami, and our lawyers to create an Amendment to the project documents that will allow clients to file before June 30. We are also working with IRG and the Hall of Fame Village to have the ability to file at $500,000 because there is the possibility the program is reauthorized but the regulations are not updated. This will extend the $500,000 window.
We always recommend our investors consult with their immigration attorneys for legal advice before taking a decision. We expect new legislation will be finalized before the US Government fiscal year ends on September 30, 2021.
If the $500,000 window opens again, we are committed to working with both of our partners to make the necessary supplements available as we have done this past week. Our expectation is the program will be reauthorized and have a strong foundation to provide better processing times and more protections for investors.
Webinar July 7th
LCR will be holding a webinar on July 7th at 10:00 am Eastern time with Aaron Grau from IIUSA and Ron Klasko from Klasko Immigration Law Partners to discuss the current situation and next steps.
If you would like to attend our webinar, please register here.