GT Immigration & Compliance Practice Co-Chair Kate Kalmykov spoke during a recent webinar on the EB-5 industry’s future, explaining that changes to the RIA to tighten oversight of regional centers have contributed to rising costs for operators. These comments are referenced in a Nov. 21 Law360 article, “EB-5 Experts Eyeing 4 Suits For Needed Clarity.”

Please join Greenberg Traurig Immigration & Compliance Practice Shareholders Jennifer Hermansky, Kate Kalmykov, and Dillon Colucci for a presentation on the new requirements for annual compliance under the EB-5 Reform and Integrity Act. Panelists will discuss USCIS’s replacement of the annual compliance form I-924A with form I-956G, as well as covering the more fulsome documentary requirements required by the Act.

Wednesday, Nov. 16, 2022
10:30 – 11:30 a.m. EST

Click here to register.

Update: The Judge approved the settlement Thursday, Sept. 1. 

The EB-5 Reform and Integrity Act (RIA) was passed on March 11, 2022. USCIS then posted an interpretation of the legislation that would nullify all 600-plus designated regional centers and require all entities to be re-designated in order to be authorized to file petitions under the new law pursuant to provisions effective May 14, 2022. This interpretation was challenged in the U.S. District Court for the Northern District of California by the EB-5 Investment Coalition (EB5IC) through one of its members. Greenberg Traurig, as counsel for the plaintiff, argued that USCIS’ interpretation ran counter to the plain language of the RIA and violated the Administrative Procedure Act because USCIS failed to properly engage in reasoned decision-making as required by law. On June 24, 2022, the Court agreed and enjoined USCIS from treating as deauthorized previously designated regional centers and declared they must be permitted to operate within the regime created by the RIA. As the Court stated, “[t]his includes processing new I‑526 petitions from immigrants investing through previously authorized regional centers…just as the agency would do for a newly approved regional center.” As a result of this ruling, all previously designated regional centers retain their existing designation and can continue to operate. See previous post, District Court Orders USCIS to Process New I-526 Petitions Throughout Previously Authorized Regional Centers | EB-5 Insights (eb5insights.com)

On Aug. 24, 2022, the parties agreed to a settlement of the case (the court is still reviewing the settlement). See USCIS Settlement Agreement.

The parties included the original plaintiff, Behring Regional Center, an EB-5 Investment Coalition member and plaintiff intervenors, EB5 Capital, CanAm Enterprises, LP, Civitas Capital Management, LLC, Golden Gate Global, Pine State Regional Center, LLC, Invest in the USA (IIUSA). The key terms of the settlement include:

  1. Acknowledgement by USCIS that regional centers validly authorized to operate prior to June 30, 2021, did not lose their designation because of the RIA.
  2. Such regional centers will have to properly file a Form I-956 by Dec. 29, 2022, if not done so already.
  3. Regional centers validly authorized to operate prior to June 30, 2021, do not need to wait for approval of a Form I-956 in order to file and receive adjudications from USCIS on any other forms, such as a Form I-526.
  4. When adjudicating Form I-956s of these regional centers validly authorized to operate prior to June 30, 2021, USCIS will defer to its decision in its prior designation notices when adjudicating certain issues and will allow for attachments from past filings to establish approval.
  5. Form I-956F must be filed by all regional centers (new or regional centers validly authorized to operate prior to June 30, 2021) prior to the filing of an associated Form I-526E (even those with previously approved exemplar Form I-924s) and a Form I-956F should be included with the Form I-526E. Due to delays in the issuance of Form I-956F receipt notices, if a Form I-956F receipt notice is not issued within 10 days of delivery, USCIS will accept a lockbox notice along with a copy of at least the first six pages of the filed Form I-956F (Parts 1-5) for purposes of providing “the receipt number for the regional center’s Form I-956F” in order to facilitate investors’ ability to file a Form I-526E immediately after a regional center files the Form I-956F, or will accept proof of cashed check or credit card charge (along with regional center name, new commercial enterprise name, job creating entity name if available, and approximate Form I-956F filing date) for purposes of providing “the receipt number for the regional center’s Form I-956F.”
  6. USCIS will provide an electronic copy of receipt notices for all Form I-956F applications that have been or are properly filed within 16 weeks and will undertake best efforts to arrange for its lockbox contractor to have the capability to return a Form I-956F receipt notice via prepaid overnight courier (e.g., FedEx or UPS).
  7. For investors who previously filed a Form I-526 or Form I-526E without a Form I-956F but based on a previously approved exemplar Form I-924, such investor may either file a new Form I-526E and a receive a refund of the filing fee or may interfile the I-956F receipt notice. Such investor petitions will not be rejected solely for failure to provide a Form I-526E or include an I-956F receipt number, and those investors can keep their original priority date.
  8. USCIS will deem the new Forms I-956, I-956H, I-956F, I-956G and I-526E to be interim until the conclusion of notice-and-comment rulemaking. USCIS has already published the Form I-526E for notice and comment here. The deadline for comments is Oct. 24, 2022.

Please join Greenberg Traurig Shareholder Kate Kalmykov, James Sozomenou, Metropolitan Commercial Bank, and Connor IrishPRXY CO, for the next lunch-and-learn. The program will discuss:

  • What is the role of an Escrow Bank in EB-5
  • Understanding the duties of an EB-5 Fund Administrator under the RIA
  • Positive effects on a project’s capital raise
  • How to get set up

Location:

The lunch-and-learn program will take place in-person at Greenberg Traurig’s NYC office in One Vanderbilt on Thursday, April 11 from 12 – 2:00 p.m. ET.

RSVP:

To RSVP for the April 11 program, please click here.

This event is part of a series on emerging trends impacting investors and employers. To RSVP to future scheduled Lunch-and-Learn programs, please click here.

In this episode of GT’s Immigration Insights series, host Kate Kalmykov is joined by Jill Jones, Head of Specialty Administration/General Counsel US, JTC, to discuss the EB-5 Reform & Integrity Act of 2022; how the post-RIA fund administrator is different from pre-RIA; the value of a fund administrator in EB-5 securities offerings; and the need for construction consultants.

Click here to watch the episode.

You are invited to listen to Episode 1 of GT’s Big Law Redefined Podcast’s Immigration Insights series, “Navigating the EB-5 Program: Insights and Updates.”

In the first episode of the Immigration Insights series on Greenberg Traurig’s Big Law Redefined Podcast, attorneys Kate Kalmykov and Jennifer Hermansky discuss the intricacies of the EB-5 Immigrant Investor Visa Program. They cover the program’s history, recent changes under the EB-5 Reform and Integrity Act, and strategies for navigating the reserved visa set aside categories. The episode highlights the importance of lawful source and path of funds, concurrent filing benefits, and the impact of mandamus actions on processing delays. With over 8,000 EB-5 investors represented, Kate and Jennifer address leveraging the EB-5 program to obtain U.S. permanent residency.

GT’s Big Law Redefined Podcast offers timely review of changes in the law that may impact clients across a broad range of sectors worldwide. Hosts and guests will also discuss hot topics covering innovative client strategies; associate recruitment, sponsorship, mentorship, and retention; investment in talent development and legal technology; trailblazing “new normal” work and client space trends; and the importance of culture, vision, and succession planning; among others.

The podcast is available on the Greenberg Traurig website and Apple Podcasts.

As the 2024 federal fiscal year concludes, the U.S. Department of State (DOS) has released its highly anticipated October 2024 visa bulletin, ushering in the start of federal fiscal year 2025 and, with it, new immigrant visa numbers. For intending immigrants with backlogged priority dates, the annual influx of new immigrant visa numbers often offers at least some advancement in government processing or, ideally, the opportunity to become “current” for immigrant visa or green card processing. 

Digging deeper into the fifth preference (EB-5) categories, as anticipated in our July 2024 post, EB-5 immigrant visas remain available worldwide in the set-aside categories created under the EB-5 Reform and Integrity Act (RIA) of 2022. To recap briefly, of the 10,000 EB-5 visas available for issuance annually, the RIA created the following visa “set asides:”

  • 20% are reserved for qualified immigrants who invest in a rural area;
  • 10% are reserved for qualified immigrants who invest in a “targeted employment area” (TEA), which meets the requirements that apply to areas of high unemployment (unemployment rate of at least 150% of the U.S. national average); and
  • 2% are reserved for qualified immigrants who invest in infrastructure projects.

Immigrant visas based on approved I-526E Petitions that meet the requirements for the above set-aside categories remain “current” for processing, regardless of the applicant’s country of birth. This also means that EB-5 applicants in the U.S. with a pending or approved I-526E Petition based on an investment in the set-aside categories may concurrently file for adjustment of status (AOS) and related work and travel permits (“EAD/AP”). Likewise, for set-aside EB-5 applicants awaiting processing abroad, continued availability of immigrant visas keeps the path to visa issuance clear. Accordingly, applicants can obtain their visas after satisfying the National Visa Center’s documentary and eligibility requirements and completing the immigrant visa interview.

For EB-5 applicants qualifying based on pre-RIA or “unreserved” immigrant visa petitions (i.e. not eligible for the above set-aside categories), the visa bulletin similarly remains current for applicants born in most countries. The persistent exception is for applicants born in mainland China or India and applying based on an EB-5 investment in the unreserved category (as noted above, set-aside investments remain current worldwide, including for applicants born in China or India). Applicants born in mainland China or India remain backlogged due to demand outpacing the available supply. The visa bulletin displayed considerable progression in these categories under Chart A, or dates “for final action” (i.e. eligible for immigrant visa issuance by DOS once all requirements met):

  • EB-5 China, Unreserved: advances 7 months, to 15 July 2016
  • EB-5 India, Unreserved: advances 13 months, to 1 January 2022

The advancements reported under Chart A, however, are somewhat tempered by Chart B.  Specifically, Chart B reports stagnation or retrogression in connection with the government’s dates “for filing” for applicants born in mainland China or India. Briefly, the dates for filing chart reflects priority dates eligible for filing of Form I-485 in the United States, depending on government determination as to whether to utilize this chart, which is announced monthly, shortly after visa bulletin release. The specific updates in these categories under Chart B include:

  • EB-5 China, Unreserved: retrogresses 3 months, to 1 October 2016
  • EB-5 India, Unreserved: no movement, remains at 1 April 2022

Because the USCIS will rely on Chart B in October 2024, the lack of advancement in the EB-5 categories above means that many applicants may still be unable to progress to the next step of their green card process, including filing Form I-485, despite the promise of a new federal fiscal year. That said, applicants should keep in mind that transitioning into a new fiscal year often requires DOS to adjust available immigrant visas based on over-subscription that may have occurred at the end of the preceding year, when most immigrant visa numbers exhaust availability worldwide.  

Key takeaways for EB-5 investors from the October 2024 visa bulletin:

  • As was the case in our July update, a record number of EB-5 visas are available to applicants in both the high unemployment and rural area set-aside categories at the outset of FY 2025, regardless of country of birth.
  • Applicants eligible under the RIA set-aside categories may, regardless of country of birth, continue to concurrently file I-526E petitions and AOS applications in October 2024.

For unreserved EB-5 investors born in mainland China or India, while the October 2024 visa bulletin displays stagnation or retrogression in Chart B, the advancements in Chart A offer some hints of future progression. Importantly, unreserved EB-5 immigrant visa processing can continue at consulates worldwide beginning October 1, 2024.

Under the EB-5 Reform and Integrity Act of 2022 (RIA), designated EB-5 regional centers must make an annual payment into the EB-5 Integrity Fund. The annual fee is $20,000 for each regional center, except for those with 20 or fewer total investors in the preceding fiscal year (Oct. 1–Sept. 30) in its new commercial enterprises, in which case the annual fee is $10,000. The Department of Homeland Security then uses the fees in the Integrity Fund to conduct audits on regional centers, site visits on EB-5 projects, and overseas investigations relating to EB-5 stakeholders and applicants abroad. 

U.S. Citizenship and Immigration Services (USCIS) published the first “Notice of EB-5 Regional Center Integrity Fund Fee” in the Federal Register March 2, 2023, for the FY 2023 Integrity Fund fee. USCIS later extended the payment window for payment of both the FY 2023 and 2024 Integrity Fund fees to Oct. 1–Oct. 31, 2023. USCIS also stated on its Integrity Fund website that the final deadline for paying both the FY 2023 and FY 2024 Integrity Fees was Dec. 30, 2023, or 90 days after the due date. USCIS warned that it would reject Integrity Fund fee payments for FY 2023 and FY 2024 received after that date, including those made in response to a Notice of Intent to Terminate.

In June and July 2024, USCIS commenced sending Notices of Intent to Terminate to designated regional centers that failed to pay the FY 2023 and FY 2024 Integrity Fund fees by Dec. 30, 2023. Litigation ensued against Department of Homeland Security because many regional centers either did not understand or did not know that both FY 2023 and FY 2024 fees were due by Dec. 30, 2023, or were misadvised that both fees were due. As of the date of this blog, it is not clear if USCIS will change its position on whether it was required to terminate regional centers that failed to pay the Integrity Fund fees for FY 2023 and FY 2024 by Dec. 30, 2023, or whether USCIS should have first imposed a reasonable penalty and notified regional centers that failed to pay, and/or whether USCIS should have used its discretion to extend due dates again following the imposition of reasonable penalties allowed by the RIA.

Importantly, each year the Integrity Fund fees are due for the upcoming fiscal year, not the past fiscal year. Starting Oct. 1, 2024, and continuing through the month of October, USCIS will collect the FY 2025 Integrity Fund fee. As outlined in the RIA, USCIS will terminate the designation of any regional center that does not pay the required fee within 90 days after the annual fee’s due date. The annual fee is payable online. Regional centers should prepare to pay the FY 2025 Integrity Fund fee once the Pay.gov portal becomes available on Oct. 1, 2024. Multiple reports leading up to the Dec. 30, 2023, deadline indicated that USCIS incorrectly processed some regional center payments. To avoid any technical issues with payment, penalties, and/or termination, regional centers should pay early and keep a clear record of the payment in case USCIS requests evidence of the payment later. Moreover, regional centers should make sure the payment is processed with their credit card company or through their bank account to avoid any issues after the payment portal closes.

Penalties for failure to pay the Integrity Fund fee include late fees and/or termination. Termination of the regional center could be damaging if the regional center has post-RIA investors. Under the RIA, investors filing Form I-526E based on investment in a new commercial enterprise must continue to be sponsored by an approved regional center. If the regional center is terminated, the new commercial enterprise must associate with a new regional center in good standing, although the RIA clarifies that the regional center need not be in the same geographic location as the original regional center. Based on the Instructions to Form I-526E, it is likely USCIS will require EB-5 investors to file an amendment to their pending or approved I-526E petition to notify USCIS of the new regional center sponsorship. This may delay the issuance of conditional green cards and result in additional fees for investors. Thus, regional centers should consider paying early and taking adequate steps to make sure their payments are timely processed by the government.

The U.S. State Department and U.S. Citizenship and Immigration Services announced that they have issued all legally available visas in the unreserved EB-5 Immigrant Investor Program categories for Fiscal Year 2024. Embassies and consulates have been directed to not issue immigrant visas in these categories until the new fiscal year (FY 2025) starts on Oct. 1, 2024. 

As discussed in our recent blog post on EB-5 filing strategies, a total of approximately 140,000 immigrant visas are available every fiscal year for employment-based immigrant visas, including the EB-1, EB-2, EB-3, EB-4, and EB-5 categories. Of the 140,000 immigrant visas available annually, the government allocates approximately 10,000 to the EB-5 investor visa program. The visas are also subject to per-country visa quotas. The Immigration and Nationality Act sets the annual limit for EB-5 visas at 7.1% of the worldwide employment limit, of which 68% is available for unreserved visa categories (C5, T5, I5, R5, RU, NU). Additionally, the EB-5 Reform and Integrity Act of 2022 makes unused EB-5 reserved visas from FY 2022 available in the EB-5 unreserved categories for FY 2024.

In recent months, U.S. Citizenship and Immigration Services (USCIS) has sent notices of intent to terminate (NOITs) to EB-5 regional centers that have not paid the “Integrity Fees” implemented by the 2022 EB-5 Reform and Integrity Act (RIA).

Congress introduced these annual Integrity Fees to help pay for many of the new integrity measures, such as USCIS site visits, audits, and overseas investigations. Depending on the number of EB-5 investors that the regional center sponsors, the Integrity Fee is either $20,000 per year or $10,000 per year.

The USCIS roll-out of the RIA has been confusing for some stakeholders. USCIS announced on March 2, 2023, almost a year after the RIA’s passage, that the first Integrity Fee payment must be paid between March 2, 2023 (the same day as the announcement) and April 3, 2023. However, given the short notice and confusion that arose over how the fees should be calculated, USCIS kept the Integrity Fee payment portal open beyond the April 3 due date. Due to a continued lack of clarity, USCIS eventually announced an Oct. 1, 2023, due date for both the FY 2023 and FY 2024 Integrity Fees. USCIS also confirmed on its website that it would take steps to terminate any regional center that, on or before Dec. 30, 2023, had not paid the required Integrity Fees for FY 2023 and FY 2024. USCIS only published these announcements on its website; it did not send the regional centers notices about these deadlines.

Now approximately seven months later, regional centers are receiving NOITs for failure to pay the Integrity Fees. Some regional centers have made a deliberate decision not to pay the Integrity Fees as a “wind down” measure; USCIS clarified on its website that if a regional center did not pay the Integrity Fees and the regional center’s designation was terminated as a result, sponsored EB-5 investors who filed I-526 petitions prior to the March 2022 passage of the RIA (Pre-RIA Investors) could still have their I-526 and I-829 petitions approved on the merits if all other eligibility criteria were met, e.g., job creation.

However, other regional centers may have wanted to remain designated under the RIA but were not aware of the Integrity Fee due date before receiving a NOIT. Moreover, the NOIT states that USCIS will not accept any late payments, so these regional centers cannot cure the payment issue in response to the NOIT, even if they wish to remain designated.

New investors who filed I-526E petitions with a designated regional center after the passage of the RIA (RIA Investors) may face denial of their I-526E petitions if the regional center’s designation is terminated. Such investors must follow the “amendment” process provided in the RIA and associate with a new regional center in good standing. However, USCIS has not promulgated any regulations about this process, and investors could face thousands of dollars in fees to associate with a new regional center despite the issue arising on behalf of regional centers, not investors.

The RIA states that USCIS must impose a reasonable penalty on regional centers that fail to pay the Integrity Fees within 30 days of the due date and must terminate a regional center’s designation if it does not pay within 90 days after the due date. USCIS only started mailing NOITs to regional centers who did not pay the Integrity Fees in July 2024, seven months after the fees were due. It does not appear that USCIS informed regional centers about any penalties as was required prior to sending the NOITs. Had they done so, regional centers would have known that the fee was due and that they could be terminated if they did not pay by the Dec. 30, 2023, deadline.

As a result, some regional centers that wish to remain designated now face termination with no way to cure the nonpayment. A lawsuit seeking a preliminary injunction was filed in federal court in Montana that challenged USCIS’s action to terminate a regional center without mailing any notice or imposing a reasonable penalty prior to initiating a termination proceeding. The judge in that case held that USCIS appeared to act arbitrarily when it determined multiple times that it had the discretion to change the deadline for the Integrity Fee payment and not impose late fees, but could not be flexible on its decision to terminate the centers. It is not yet clear whether USCIS will appeal the decision or change its position and exercise its discretion to allow late Integrity Fee payments.

Many EB-5 stakeholders, including industry groups and bar associations, are petitioning USCIS to allow such late payments by those regional centers that wish to remain designated. Allowing late Integrity Fee payments would bring in more fees to the Integrity Fund to allow for additional investigations and audits. Moreover, if these regional centers maintain their designation, they must participate in the annual compliance process with USCIS, whereby the regional center will report to the government on the progress of its projects, which would likely contribute to the overall integrity of the EB-5 program.