On June 30, 2021, the United States residency by investment programme, called the EB-5 immigrant investor programme, lapsed due to a lack of reauthorisation from Congress. With the pause of the programme, the US Citizenship and Immigration Services (USCIS) announced that no new petitions from foreign investors would be accepted under the EB-5 Regional Center Programme. The American Legal Center, a team of US licensed lawyers and professionals specialising in the EB-5 programme, based in Dubai, predicts the programme will once again be renewed by Congress and investors will have a short window of opportunity to file their applications for US residency at $500,000.
The EB-5 Programme was created by Congress as part of the Immigration Act of 1990 to stimulate the US economy through job creation and capital investment by foreign investors. The programme provides investors the opportunity to obtain US residency by investing $500,000, with which a minimum of 10 jobs must be created for US persons. The programme has gone through a flurry of changes over the course of the past two years.
On November 21, 2019, the US Department of Homeland Security (DHS) implemented new rules increasing the investment amount required for the programme from $500,000 to $900,000. The increased amount made it tremendously difficult for middle-class families to partake in the programme and realise their goal of achieving the American dream. With the strong reluctance to invest at $900,000, the programme was no longer a viable option for families who did not have sufficient funds to participate. Those who could afford the programme at $900,000 were families in the upper echelon of global earners, who were reluctant to partake due to exposure to global taxation.
Given the many benefits of the programme, both for the US economy and for foreign investors seeking to secure the future of their families in the United States, many fought and lobbied for the 2019 rules to be vacated. On June 22, 2021, the efforts of the EB-5 industry were rewarded when a US federal court vacated the 2019 rules and brought back the investment amount to $500,000. With the decrease of the required capital and the upcoming deadline for the programme, foreign investors rushed to file their applications. With the sudden rush of applicants, projects in which foreign nationals could invest nearly sold out. The Legal Director of The American Legal Center, Shai Zamanian, had consistently urged those interested to be prepared for the announcement of the capital requirement reduction. Those who had listened were able to seamlessly file their applications, but a handful of interested applicants once again missed the chance to take advantage of the short window of opportunity. Nevertheless, Zamanian is once again giving hope to interested applicants and urging them to prepare their documents and have their funds ready for investment when the next window of opportunity arises. “Our team has a unique solution to help those that missed the deadline but are still interested to file. Contact us for a consultation about your situation. We would be happy to offer a solution that works for you and your family,” says Zamanian.
Industry insiders claim one of the reasons the reauthorisation did not take place was due to varying lobbying groups within the industry. On one side, New York City developers lobbied for an extension of the programme in order to have access to low-cost money flowing to luxury urban projects and developments, and on the other side, Congressmen representing rural America see the migration of foreign investors as a threat to job security in the United States. This view is not only inaccurate, but also against the entire purpose for which the programme was initially created in 1990, as a way to stimulate job creation through the use of foreign investment.
The American Legal Center predicts that the EB-5 programme will once again be renewed by September 2021. While the USCIS is currently implementing EB-5 regulations that were in place prior to the 2019 rules meaning that the required investment is at $500,000, it is likely that DHS will once again increase the required investment to $900,000. Although there is great uncertainty around the investment amount, The American Legal Center predicts that prospective investors will still have the opportunity to file their applications at $500,000, however, this is not expected to last and therefore those interested must act now. To catch the short window of opportunity, those interested should prepare their source of funds documents, subscribe to a government pre-approved EB-5 project, and make an initial deposit to secure their spot. As soon as the programme is reauthorised, those that are prepared can be the first to get their applications filed with USCIS.