The EB-5 Reform and Integrity Act of 2022 is well-received news for people interested in immigrating to the United States. The Act makes changes that benefit people who apply for EB-5 green cards. Here are some of the more significant changes the Act made to the EB-5 program.
Reduced Uncertainty for EB-5 Visas
The EB-5 Reform and Integrity Act reauthorizes EB-5 regional centers until 2027. Before the Act, Congress had to reauthorize the EB-5 program every year. This new five-year reauthorization adds welcome stability to the EB-5 program.
The Act also removes uncertainty about the status of applications submitted near the end of the reauthorization period. The EB-5 Reform Act preserves visa applications through the end of the program. People who submit an EB-5 petition by September 30, 2026, will still be eligible for a visa even if the program is not extended beyond 2027.
Status Adjustments for Lawful Immigrants
EB-5 petitioners who are in the U.S. on a valid visa may now enjoy the benefits of being a permanent resident while awaiting the adjudication of their EB-5 filing. They can submit a concurrent filing through an Adjustment of Status from the previous visa to the EB-5 based on their existing application. This provision grants work and travel permits for themselves and their families while awaiting to receive the approved green cards.
Changes to Minimum Investment Amounts
The EB-5 Reform and Integrity Act increased investment requirements for the EB-5 program. However, these increases were not as high as those made in past years.
Under the new law, the minimum investment increased to $800,000 for qualifying target employment areas (TEAs) and rural locations. The investment minimum for non-TEA areas increased to $1,050,000. This change decreases the discrepancy between TEAs and other areas as the previous program’s investment requirement was $900,000 and $1,800,000 for TEAs and non-TEAs respectively.
Changes to Target Employment Areas
TEAs still need to be in an urban distressed area, which is an urban area that suffers from 1.5 times the national unemployment rate.
A New Definition for Urban Distressed Areas
With the EB-5 Reform and Integrity act, Congress has adopted a more strict definition for distressed urban areas. Before this change, a distressed area was 13 contiguous census tracts that averaged the target unemployment rate. Under the new guidelines, a distressed area must be the census tract that is the target of the investment and the tracts adjacent to it.
Priority Processing for Rural Projects
While the definition of an urban distressed area has become more strict under the EB-5 Reform Act, rural areas with fewer than 20,000 permanent residents also qualify as TEAs.
Rural TEAs have priority processing over all other EB-5 categories under the provisions of the new law. EB-5 applicants investing in rural areas may qualify for initial green card approval in as little as six to twelve months; this is a big difference from the two or more years the standard process requires.
Improved Regulatory Standards for the EB-5 Program
Increased transparency is another important feature of the EB-5 Reform and Integrity Act.
Flaws With the Previous Law
Under the previous law, there was no standardized way for investors to know where and how their money was being used. Regional centers often acted as fund administrators. They did their best to verify that money was being spent on job-creating activities, but there was no way to guarantee that a project would keep its books correctly.
This added unnecessary risk to the process. Inconsistent bookkeeping also made it difficult to prove that funds spent created the jobs necessary to be approved of the permanent green cards through the EB-5 program.
New Standardization and Transparency Measures
The new law standardizes the way projects handle and document EB-5 investments. To be eligible for EB-5 investment, a project must file its business plan with the USCIS before bringing on investors.
An eligible project also needs a third-party CPA or attorney acting as a fund administrator. The administrator must certify the transaction every time money moves from the escrow account to the project. This guarantees that the project spends money on approved job creation activities.
The project also needs to file an annual report that shows how much money investors contributed to the project and where that money was spent.
This is excellent news for investors. This increases the overhead costs of the project, but it provides needed oversight and accountability. These new rules protect EB-5 applicants and their investments.
EB-5 Green Card Processing Improvements
Other changes the new law makes relate to the processing times for EB-5 visas. The new law increases pay for green card processors, which should improve processing times.
The USCIS made improving processing times for the EB-5 program a priority. They also plan to review their process to find ways to make it more efficient. At the moment, they’ve already implemented the fee study mandated by the EB-5 Reform and Integrity Act. This fee study was commissioned to better improve processing times through more efficient adjudications.
Learn More About the EB-5 Reform and Integrity Act
The EB-5 Reform and Integrity Act brings exciting changes to the EB-5 Visa program. Contact Houston EB5 if you want to know more about these changes or if you are eligible for an EB-5 visa.