USCIS wants input from EB-5 stakeholders about three topics
By Anayat Durrani
The U.S. Citizenship and Immigration Services is gearing up to hold a virtual stakeholder engagement. The agency will provide a Q&A forum to hear questions, comments and feedback from stakeholders on three topics: direct and third-party promoters, investment period, and regional center operations.
“As an immigration practitioner, I welcome any open discussion between USCIS and stakeholders. I hope USCIS will give practitioners clearer guidance,” says Ying (Elissa) Lu, Attorney at Law, Law Office of Lu & Associates.
While the agency has said that they are interested in receiving overall feedback about the EB-5 program, the Q&A will largely focus on the three topics and will not address case-specific questions or topics beyond the focus of the engagement, or issues under active litigation or set to be litigated.
Clarification regarding EB-5 direct and third-party promoters
Stakeholders have had many unanswered questions from USCIS. Regarding direct and third-party promoters, there are questions concerning who should be seen as an EB-5 “promoter” and what requirements apply to them. The USCIS has stated it requires a promoter to submit Form I-956K, Registration for Direct and Third-Party Promoters. The form is to be submitted separately from the Form I-956F, Application for Approval of an Investment in a Commercial Enterprise.
“We have been able to decipher some of the agency’s thoughts on the issue of third-party promoters,” says Rohit Kapuria, partner at Saul Ewing, “but with regard to the sustainment period and treatment of new commercial enterprises associated with regional centers that would like to withdraw from the program, it is important and helpful that USCIS provide us detailed guidance.”
How to interpret the EB-5 investment period
On the topic of investment period, stakeholders have taken issue with possible USCIS interpretation that the RIA requires a two-year investment duration floor, which they say is contrary to Congress’ intent and EB-5 program policy goals. During the engagement, the USCIS says it will review the requirements for an immigrant investor to sustain their investment if they filed Form I-526, Immigrant Petition by Standalone Investor, before March 15, 2022. They will also discuss the EB-5 Reform and Integrity Act of 2022 (RIA) new requirement that capital remain invested for at least two years for those who filed an I-526 or Form I-526E on or after March 15, 2022.
“We are actively structuring EB-5 projects around the country and the possible interpretational change stemming from the RIA in relation to the sustainment period is a game changer,” says Kapuria.
He says he hopes to better understand USCIS’s perspective on this “and how it would figure into the timelines associated with the raise of EB-5 capital, the subsequent deployment thereof and the underlying completion of the project.”
Kapuria says redeployment has been a significant part of EB-5 for the past few years, and added, “if USCIS is, indeed, going to change the definition of the sustainment period, this would have an impact on the modeling that EB-5 issuers set up when structuring new EB-5 projects.”
USCIS to discuss EB-5 regional center operations
Stakeholders have also had questions concerning “retiring” regional centers. The USCIS says it will discuss issues involving regional center operations, such as operators who seek to withdraw from the EB-5 program and terminate their status, as well as those who no longer want to solicit investments for new projects under the RIA.
Ahead of the April 25 EB-5 stakeholder engagement, American Immigrant Investor Alliance (AIIA), an organization that advocates for EB-5 investors, has submitted their comments and questions as well as feedback to USCIS. The organization’s letter addresses the role of the RIA in changing sustainment periods for pre- and post-RIA investors and is seeking more clarity on a number of issues impacting the quality of the EB-5 program and investor experience.
In their letter, Ishaan Khanna, president of AIIA, said the organization is looking forward to a “productive engagement with USCIS and welcome the opportunity to have a dialogue about the concerns of tens of thousands of immigrant investors.”
Invest in the USA (IIUSA), the non-profit trade association of the EB-5 Regional Center industry, also submitted a question and comment packet to USCIS. In a letter to USCIS, Aaron Grau, executive director, called the upcoming engagement “an opportunity for stakeholders to receive updates from IPO on the program and engage in substantive and meaningful two-way communications with the IPO in a way that has not been possible for some time.”
The question and comment packet contains not only questions but much feedback for USCIS, to assist the agency “in making the EB-5 program a more productive, efficient and impactful EB-5 program for the United States economy.”
EB-5 processing times
Much of the engagement will focus heavily on direct and third-party promoters, investment period, and regional center operations. Lu says she would like to know what the processing time for the set aside rural projects is right now, particularly since the RIA created a new set of rules and standards for EB-5 investments, providing strong advantages and protections for investors, including giving priority processing for rural area projects.
“I am often asked by my clients about how soon they will get a result for their I-526E petition if they invest into a set aside rural area project. They would like to calculate their immigration timeline for better family planning,” says Lu.
She says the USCIS’s website currently fails to list the processing time for each EB-5 sub category and that the combined I-526 processing time for China mainland born applicants is currently 81.5 months, “which is ridiculously long and basically closes the EB-5 route for Chinese investors.”
She says per her understanding, anything shorter than 81.5 months is considered “priority” handling.
“However, this answer is not enough for foreign investors. They have huge financial stakes in the EB-5 projects. I believe that they deserve a more transparent answer from USCIS,” says Lu.
The USCIS engagement will be held on Tuesday, April 25, 2023, from 1:30 to 3 p.m. Eastern.