Clouds of Uncertainty for EB-5 Regional Center I-829 Petitioners

The New Year brings us an EB-5 Regional Center Program in abeyance. According to the recently issued USCIS guidance for EB-5 Regional Centers and their investors (a copy of which can be found at this link: https://www.uscis.gov/working-united…gional-centers ), investors at the I-829 stage may suffer potentially dire consequences of the government shutdown.

By way of background, the EB-5 Program itself was created in the Immigrating and Nationality Act of 1990. That act is permeant law in that there is no stated time of expiration. In contrast, the Regional Center program was created in separate legislation in 1993, which contained a three year ‘sunset’ provision or expiration date. The major benefit of the Regional Center program was to allow the petitioners to use econometrically calculated jobs to satisfy the ‘direct’ job creation requirement of the 1990 Act.

In the last several years, Congress has declined to enact a full three-year reauthorization, instead, lumping the EB-5 program (and many other immigration and non-immigration programs) into ‘omnibus’ legislation as part of the annual budget laws. When President Trump refused to sign the most recent bill to fund the Federal Government, he effectively terminated the EB-5 Regional Center Program.

This has happened before and each time the new bill that was eventually passed retroactively restored the Regional Center program so that there was no real effect on petitioners. This time things may turn out differently. If the shutdown runs for an extended period of time, which some in Washington, including the President suggest it may, Regional Center based petitions may truly suffer.

The USCIS Guidance noted above has placed I-526 petitions “on hold for an undetermined length of time”. This is actually very kind of them as USCIS could simply continue adjudicating the petitions based on what is the currently law of the land (the 1990 Act). These petitions would almost certainly lack a business plan showing the creation of ten full time employment positions per petitioner, which would therefore require a denial.

With respect to I-829 Petitions, the USCIS Guidance goes on to state, “All Forms I-829, Petition by Entrepreneur to Remove Conditions on Permanent Resident Status, filed before or after the expiration date, will not be affected by the expiration of the program.” The phrase, ‘will not be affected’ is a curious choice of words. Does this mean that USCIS will allow the petitioners to claim the benefit of econometrically created jobs, even though there is no statutory basis for doing so? Or does it mean that the ‘adjudication’ of I-829 petitions will not be affected, in that USCIS will continue to process the petitions, but simply apply the current law, which would require denials where the project did not have sufficient direct job creation? If the Petitions were approved under the defunct law, would anti-immigration forces in Congress have standing to sue USCIS for failure to appropriately enforce the law?

USCIS could use an extended shutdown to clear out a significant chunk of its I-829 backlog if it desired. If the Regional Center program is ever retroactively restored, this would through those investors’ petitions into chaos.

In the situation of an extended shutdown, in the best of circumstances, Regional Center I-829 petitioners would have a cloud of uncertainty over their request to remove the conditions on their lawful permeant residence. In the worst case, they are facing outright denials with the potential for deportation.

All of this highlights the ‘legislative risk’ inherent in all Regional Center based EB-5 investments. Even if the Regional Center program is restored this time around, until such time as it is restored either in a permanent fashion or with a duration equal to or greater than the combined I-526 and I-829 processing times (which is over a decade for petitioners from countries currently subject to retrogression), investors should carefully consider this risk as part of their overall investment considerations or consider an EB-5 investment premised only on direct job creation.


About The Author

Matt Gordon is a noted policy expert in the visa-based investments field and is an authority on structuring visa-based investments. Mr. Gordon’s career spans business operations, finance and law. He is the editor of the EB-5 Book, the legal treatise on the EB-5 program and a frequent lecturer to immigration attorneys. Mr. Gordon has participated in policy events, including those hosted by the White House and Harvard University’s Kennedy School of Government. Prior to founding E3iG, Mr. Gordon was an investment banker for a decade and ran the US division of a Swiss multi-national corporation. Mr. Gordon is a licensed attorney, having practiced mergers and acquisitions law at the beginning of his career with the largest and most reputable Wall Street firms including Fried Frank and Sullivan & Cromwell. Mr. Gordon received his B.S. in Policy Analysis from Cornell University and his J.D., cum laude, from the University of Pennsylvania School of Law.