The ongoing legal dispute between the U.S. Department of Homeland Security (DHS), the U.S. Citizenship and Immigration Services (USCIS), and Invest in the USA (IIUSA) concerning the EB-5 program’s sustainment period has many EB-5 attorneys concerned.
It’s been a year since the IIUSA sued the DHS and USCIS in the U.S. District Court for the District of Columbia over their interpretation of the EB-5 Reform and Integrity Act of 2022 (RIA) regarding the investment sustainment period.
The core issue focuses on regulating the sustainment period, a crucial factor for EB-5 investors.
The sustainment period refers to the duration an EB-5 investor’s funds must remain “at risk” in a U.S. business to qualify for permanent residency. During this time, a minimum of 10 jobs for U.S. workers must be created.
Today, according to the USCIS interpretation, this period is two years after the money is invested in the EB-5 project. However, IIUSA argues that this understanding violates federal law and industry practices and harms current and future EB-5 deal-making.
IIUSA requests that USCIS repeal the existing 2-year period and establish a 5-year alternative, claiming it is responsive to key reliance interests shared by all EB-5 investors and stakeholders.
The parties have submitted two joint status reports explaining their arguments, one in February and another in late March. They have yet to reach an on-or-off-court agreement.
Lack of resolution creates uncertainty, EB-5 attorneys say
As Rakesh Patel from Patel Law Group states, “The lack of an agreement really hinders the program, specifically investors. It is disappointing that outside forces are dictating what is best for the investor.”
The EB-5 attorney emphasizes the situation’s urgency, saying, “I truly hope a quick resolution is coming soon. We have had so many calls with investors worried about what the result of this ruling may be.”
He adds that confusion in the EB-5 marketplace is not beneficial for anyone involved, and believes that “we will see a result that will satisfy all parties, but not before a lot of wasted time and energy.”
As Joseph Barnett from WR Immigration points out, this uncertainty has not stopped Chinese and Indian EB-5 investors in the U.S. from investing because “many understand there is no choice but to file before Final Action Dates prevent the ability to file an adjustment concurrently. The filing of the Form I-485 is so important that the moving target of sustainment requirement may not even be top of mind.”
For those who are worried about the lack of resolution, “their biggest concern is if the judge rules in favor of IIUSA on its motion for summary judgment, which argues that Congress intended to retain the existing (pre-RIA) calculation of the sustainment period, then their EB-5 capital would be required to remain “at risk” through visa backlogs and subject to redeployment uncertainties before meeting the full immigration requirements, or at least until new rule-making is finalized. Either way, there is uncertainty, and I think investors are mostly looking for secure investment, no matter what location, because they know it is a long-term process.”
EB-5 attorney Tammy Fox-Isicoff notes that while some investors may be apprehensive about the IIUSA’s challenge to USCIS’s guidance, the agency “cannot overcome a regulation with a note in a memo.”
She adds that the absence of a clear timeline for new regulations raises questions about the future of the EB-5 program. “We all know that the government has had difficulty issuing regulations,” and emphasizes that this uncertainty should be a cause for concern.
Another hurdle is the potential for limited funding. Fox-Isicoff points out, “It is doubtful that many projects will want EB-5 funding if the funding is limited to a two-year period.”
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