Suspension of the immigrant investor program in America, what happens now?

Suspension of the immigrant investor program in America, what happens now?

EB-5 Immigrant Investor Program Suspension What Happens Now?

Set June 30, 2021, as the end date of the EB-5 US Immigrant Investor Program. This means that as of July 1, 2021, USCIS will no longer accept petitions under the EB-5 Regional Center category. For the program to continue operating and accept petitions, Congress must re-certify it, and at this time, Congress has not re-certified the program. Therefore, it is essential to clarify what this means for the future of the program and its current investors.

Re-certification of the program

Congress must reauthorize the program, not only for potential investors but also for the US economy. The program provides a positive injection to the US labor market and economic growth. Based on the impact of the global pandemic, the US needs continued economic stimulus to continue to be the force that it is. However, the burning question is whether the program will be reauthorized under the $500,000 rule or the repealed rule of the EB-5 Immigrant Investor Program update released in November 2019, which increased the required capital to $900,000.

Under the $500,000 rule, the program is achievable for middle- and working-class families who use their life savings and retirement investments to participate in the program. These are families investing in the future in the United States because returning to their home countries is no longer an option. From a humanitarian perspective, this aligns with the current administration's efforts to make the United States more accessible to immigrants again.

However, keeping the program at $900,000 means that the program has not increased with inflation for three decades. Compared to other national programs, EB-5 is the only federal immigration program with the same amount. Moreover, using the recovery from the global pandemic argument, the government may see keeping the program at $900,000 as the only economically viable and beneficial option.

In theory, keeping up with inflation - and thus increasing the amount of investment required - makes financial sense. However, assessing the number of applications received in the fiscal year 2020 should be an accurate measure of how successful the program will be with the $900,000 requirement. Based on quarterly statistics published by United States Citizenship and Immigration Services (USCIS) for the fiscal year 2020, the department received fewer than 5,000 application forms for an I-526 petition. In the last quarter of 2020, a sharpening of the quarterly stats received only 53 applications. Comparing the fourth quarter to the first quarter, there is a difference of 4,211 in the number of orders received.

This is why the first quarter had more applications due to the recent rush of applications sent to USCIS before the deadline of November 30, 2019, when investors could still invest $500,000. It is thus clear that the program thrives on less than $500,000 more than it would under the $900,000 rules. However, it is also clear that the program will at some point need to be scaled up to keep pace with the current rate of inflation.

Deposit less than $500,000

There is still little opportunity for potential investors to apply under the $500,000 rules. The program is likely to be re-certified by September 30, 2021, giving potential investors a small window to offer less than $500,000 before USCIS decides whether to increase the program to $900,000 or stay at $500,000.