The federal government has been ordered to allow previously licensed EB-5 regional centers to continue operating while challenges to the reauthorization mandate continue. In March 2022, legislation required all EB-5 centers to stop operating while reauthorization procedures were completed, revamping the program.
U.S. Citizenship and Immigration Services must allow the 632 EB-5 regional centers to continue operating to support foreign investments from foreign investors in qualifying programs. One of the centers, Behring Regional Center LLC, is challenging the EB-5 Reform and Integrity Act of 2022 which unilaterally deauthorized all centers from functioning. Efforts to reform the EB-5 program were greatly supported. However, the sudden closing of all EB-5 centers was not welcomed by most. Projects in-process were halted, impacting investors and businesses hired to complete the projects. In addition, EB-5 investors awaiting green cards were put in limbo.
Authorization for EB-5 centers was previously included in the annual appropriations process. Each year, Congress extended the program, providing funding to keep the program going, sometimes even after funding lapsed. The EB-5 program has seen some issues, however. Some of the regional center operators were found guilty of fraud. With this background, efforts to rectify and improve the EB-5 program began.
USCIS no longer lists processing times for the EB-5 applications. However, they estimate between 19 and 67 months to complete processing, as of May 2021.
For both investors and developers, the uncertainty about the EB-5 program and the extensive processing times may turn potential investors and developers away from the program. Developers do not know when their regional center will authorize their project. Investors don’t know when they will earn a green card. Worldwide programs are competitive for these limited funding opportunities.
The Behring Regional Center lawsuit stated that $450 million in funds for construction projects were delayed. In addition, layoffs at the center would likely be required and 12 withdrawal requests were submitted by investors, stating they had “no faith” in the EB-5 process.
If you have questions about the EB-5 process or how this latest ruling could affect you, contact us at ILBSG. We work with our clients in their particular situations to ensure they get the right advice.
