June 30, 2021 marked the sunset date for the United States EB-5 Immigrant Investor Program. This means that as of 1 July 2021, the United States Citizenship and Immigration Services are no longer accepting petitions submitted under the EB-5 Regional Center category. For the program to continue to operate and accept petitions it needs to be reauthorized by Congress and at this current time, Congress has not reauthorized the program. Therefore it is important to unpack what this means for the future of the program and its current investors.
Reauthorization of the program
It is vital for Congress to reauthorize the program, not only for the prospective investors but also for the U.S economy. The program provides a positive injection to the U.S. labor market and economic growth and based on the impact of the global pandemic, the U.S. needs constant economic stimulation to continue being the powerhouse that it is. However, the burning question is whether the program will be reauthorized under the $500,000 rule or the vacated rule of the EB-5 modernization released in November 2019, which increased the required capital to $900,000.
Under the $500,000 rule, the program is attainable for the middle and working class families that use their life savings and dissolve their retirement investments to participate in the program. These are the families that invest in a future in the United States, because going back to their home countries is no longer an option. From a humanitarian perspective, this is in line with the current administration’s effort to make the U.S. accessible to immigrants again.
However, keeping the program at $900,000 would mean that the program has not increased with inflation for three decades. Compared to other national programs, the EB-5 program is the only national immigration program that has consistently stayed at the same amount. Moreover, using the recovery from the global pandemic argument, the government might deem that keeping the program at $900,000 is the only option that is economically viable and beneficial to the country.
In theory, keeping up with inflation — and as such increasing the required investment amount — makes financial sense. However, evaluating the number of applications received in fiscal year 2020 should be an accurate measure of how successful the program will be with the $900,000 requirement. Based on the quarterly statistics published by the United States Citizenship and Immigration Services (USCIS) for fiscal year 2020, the department received just under 5,000 application forms for the I-526 petition. Honing in on the quarterly statistics, in the last quarter of 2020 it received only 53 applications. Comparing the fourth quarter to the first quarter there is a 4,211 difference in the number of applications received.
It can be assumed that the reason the first quarter has so many more applications is due to the last rush of applications sent to USCIS before the November 30, 2019 deadline, where investors could still invest $500,000. It is thus evident that the program thrives under $500,000 more than it would under the $900,000 rules. However, it is also evident that the program at some point will need to increase to keep up with the current inflation rate.
Filing under $500,000
There is still a small window of opportunity for prospective investors to apply under the $500,000 rules. The program will most likely be reauthorized by September 30, 2021, which would give prospective investors a small window to file under $500,000 prior to USCIS making a decision on whether the program will increase to $900,000 or remain at $500,000.