The EB-5 Immigrant Investor Program has long been a potential path for foreign investors seeking U.S. permanent residency. As we have previously discussed, the EB-5 set aside program is the only employment-based green card category that is current for all nationalities. This program requires investments to be at risk which creates potential concerns for those potentially investing an EB-5 regional center. One of the biggest issues for investors revolves around the stability and longevity of their chosen regional centers are valid. One of the uncertanties EB-5 investors face is what happens when a regional center is terminated or dissolved. However, there are potential solutions when this happens that can protect investors. In light of the changes brought about by the EB-5 Reform and Integrity Act of 2022 (RIA), the landscape for investors, particularly when a regional center dissolves, has evolved significantly.

In this article, we will explore the implications of regional center dissolution for EB-5 investors based on guidance from the United States Citizenship and Immigration Services (USCIS), relevant statutes, and applicable regulations. The focus will be on the steps that both pre- and post-RIA investors can take to safeguard their investments and maintain their eligibility for permanent residency.

Legal Implications of Regional Center Termination

Pre-RIA Investors

Pre-RIA investors are those who filed their EB-5 petitions (Form I-526 or I-526E) before the RIA was enacted. Under the RIA, pre-RIA investors are generally protected by the law’s grandfathering provisions, found in Section 105(c) of the Immigration and Nationality Act (INA). These provisions require USCIS to continue processing EB-5 petitions filed before the effective date of the RIA, even if the regional center they are associated with is terminated.

In cases where a regional center is terminated, pre-RIA investors may still be eligible to continue with their petitions if their investment complies with the eligibility criteria that existed at the time of filing. This includes job creation requirements, which in some cases, may still be based on indirect job creation. Furthermore, pre-RIA investors must sustain their investment throughout the two-year period of conditional residency, as outlined in Section 216A of the Immigration and Nationality Act (INA).

Key Considerations for Pre-RIA Investors

• Eligibility Despite Termination: Pre-RIA investors may remain eligible even if their regional center is dissolved, provided they continue to meet job creation and investment requirements.
• Sustaining Investment: The investor must demonstrate that their investment has been sustained for at least two years, including meeting the job creation requirements, regardless of the termination.
• No Material Change: USCIS has clarified that the dissolution of a regional center, in many cases, is not considered a “material change” affecting the investor’s eligibility.

USCIS has indicated that where the regional center is terminated based on failure to pay the EB-5 Integrity Fund Fee,

Post-RIA Investors

For post-RIA investors—those who filed their I-526 or I-526E petitions after the RIA was enacted—eligibility rules are stricter. These investors are not protected by the RIA’s grandfathering provisions. Instead, they must meet the new legal requirements set by the RIA, such as the need to remain associated with an approved regional center or new commercial enterprise.

If a post-RIA investor’s regional center is terminated, they will likely need to reassociate their investment with another approved regional center or invest in a new commercial enterprise to retain their eligibility under the EB-5 program.

Post-RIA investors can retain their eleigiblity regardless of termination if sufficient jobs were created and the capital was invested for 2 years under the requirements before the termination of the regional center. However, if these conditions are not met, post-RIA investors may amend their I-526E to remain eligible by demonstrating that they have reassociated with an approved regional center or have made a qualifying investment in another new commercial enterprise. Generally speaking, this must be done within 180 days of receipt of the notice of termination.

Investor Protections under the INA

Both pre- and post-RIA investors are afforded certain protections under Section 203(b)(5)(M) of the INA. This section provides remedies for investors who are affected by the termination of a regional center or debarment of a job-creating entity or new commercial enterprise. These remedies include:

1. Priority Date Retention: Investors may retain their original visa priority date, even if they must amend their petitions or change regional centers.
2. Age-Out Protection: Derivative beneficiaries, such as children of investors, are protected from aging out, ensuring they remain eligible for a green card.
3. Abeyance of Petitions: USCIS may hold petitions in abeyance while investors take the necessary steps to reassociate with a new regional center or enterprise.

Project-Specific Issues

For both pre- and post-RIA investors, the termination of a regional center does not guarantee continued eligibility if the project associated with their investment fails to meet the job creation requirements. If the new commercial enterprise or job-creating entity is debarred, and the project fails or falls short in creating the requisite number of jobs, investors may lose their eligibility for permanent residency.

In such cases, investors may be required to amend their petitions and potentially make additional investments to satisfy the EB-5 program requirements.

USCIS Notification and the Amendment Process

When a regional center is terminated, USCIS will issue a Notice of Termination to affected investors. For post-RIA investors, this notice will trigger a 180-day period in which they must either amend their petition or reassociate with another regional center. The amendment process may also require filing a new Form I-956F (Application for Approval of an Investment in a Commercial Enterprise) along with a new filing fee.

USCIS may also issue a Request for Evidence (RFE) or Notice of Intent to Deny (NOID) to provide investors with an opportunity to demonstrate continued eligibility.

Conclusion

The termination of an EB-5 regional center, while concerning, does not necessarily spell the end for investors’ immigration journey. Pre-RIA investors benefit from grandfathering provisions that provide some protection, while post-RIA investors must act swiftly to reassociate their investments or amend their petitions. Understanding the nuances of USCIS regulations and the remedies available under the INA is critical to navigating the EB-5 program successfully.

Investors facing regional center termination should consult with an experienced immigration attorney to ensure they take the necessary steps to protect their investment and eligibility for permanent residency. Whether reassociating with a new regional center or making additional investments, prompt action is essential for staying on track toward obtaining a green card through the EB-5 program.

If you are interested in the EB-5 program, contact Steven Brown from our office.

Reddy Neumann Brown PC located in Houston, Texas, has been serving the business community for over 25 years and is Houston’s largest immigration law firm focused solely on U.S. Employment-based and investor-based immigration. We work with employers, employees and investors helping them navigate the immigration process quickly and cost-effectively.

By: Steven Brown

Steven Brown is a Partner at Reddy Neumann Brown PC where he works in the Non-immigrant visa department and leads the Litigation Team. His practice covers all phases of the non-immigration visa process including filing H-1B, L-1, E-3, H-4, and H-4 EAD petitions. In the last two years, Steven has successfully handled over 1,000 non-immigrant visa petitions including filing petitions, responding to any necessary Requests for Evidence, and drafting motions and appeals. He has also become a key resource for F-1 students that seek guidance on properly complying with the F-1 visa regulations and any OPT or CPT issues they may have. Additionally, Steven holds a weekly conference call for companies that are part of one of the largest organizations for IT Services companies in America.