Long Overdue EB-5 Regional Center Reforms Included in Omnibus

EB-5 and passport

A reinstatement and major overhaul of the EB-5 investment visa program passed Congress this week as part of the omnibus package that will fund the federal government through Sept 30. President Biden is expected to sign the omni today. (Roundtable news release and EB-5 Fact Sheet)

 EB-5 Reinstatement

  • The EB-5 Reform and Integrity Act is the first significant update to the “regional center” program since its creation by Congress in the early 1990s. The EB-5 language can be found in the Division BB section of the 2022 omnibus appropriations bill.
  • The Act reauthorizes regional centers for five years, which expired on June 30, 2021. The EB-5 program reforms are the culmination of years of hard work by a bipartisan group of Senators and Representatives who negotiated a pragmatic solution to modernize the investment visa program.
  • After President Biden signs the omni, the U.S. Citizenship and Immigration Services (USCIS) can re-start its procedures to review the petitions of tens of thousands of overseas investors who have been in limbo on their green card applications since last July.
  • The Act also sets new program requirements to safeguard national security, deter fraud, and promote urban and rural development with EB-5 financing provided by overseas investors. [Roundtable EB-5 Fact Sheet]

Roundtable Commends Reforms 

John Fish Suffolk CRE background

  • “The EB-5 Reform and Integrity Act gives our country a competitive edge in the global marketplace for foreign capital and it will attract investments from abroad to create jobs here at home,” said Real Estate Roundtable Chair, John Fish [Chairman and CEO, Suffolk], above, “American workers in low-income neighborhoods, downtown business districts and rural markets will benefit from EB-5 modernization because it will bring critical financing to support infrastructure and other economic development projects throughout the country.” (Roundtable news release, March 11)
  • “The Roundtable has advocated for years to clean up the regional center program and we applaud congressional passage of the EB-5 Reform and Integrity Act,” said Roundtable President and CEO, Jeffrey D. DeBoer. “The Act strikes a bipartisan compromise to get the program back on track – and reduces the litigation risk from existing investors who have been waiting in limbo on their visa applications since the program expired last July.”

“We thank House Speaker Nancy Pelosi (D-CA), Senate Majority Leader Charles Schumer (D-NY), Senate Minority Leader Mitch McConnell (R-KY), and House Minority Leader Kevin McCarthy (R-CA) for their bipartisan, bicameral agreement to include comprehensive EB-5 reform in the omnibus appropriations package,” DeBoer continued. “We commend the authors of the EB-5 Reform and Integrity Act, Senators Patrick Leahy (D-VT) and Chuck Grassley (R-IA), for their work in crafting a product that has the support from a diverse stakeholder coalition.” 

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Rural-Urban Coalition Proposes EB-5 Reforms

A broad coalition representing rural and urban stakeholder groups submitted principles today to the Senate and House Judiciary committees on strengthening and reforming the EB-5 investment visa program, which is scheduled to expire on September 30, 2019.  (EB-5 coalition letter)

A broad coalition representing rural and urban stakeholder groups submitted principles today to the Senate and House Judiciary committees on strengthening and reforming the EB-5 investment visa program, which is scheduled to expire on September 30, 2019. (EB-5 coalition letter

  • The coalition also recommends in the May 17 letter that a comprehensive reform package for the EB-5 Regional Center program accompany a six-year reauthorization term.
  • The letter marks the first set of reform principles that have broad, unified support across the EB-5 industry and national real estate organizations.  Signatories to the letter include the EB-5 Investment Coalition, Invest in the USA (IIUSA), Rural Alliance, The Real Estate Roundtable, and the U.S. Chamber of Commerce.
  • The coalition’s recommendations to modernize the EB-5 program “…would achieve the vital goals of safeguarding our national security and deterring investor fraud while ensuring that foreign direct investment obtained through the EB-5 program continues to drive economic growth and job creation in the U.S.”  (EB-5 coalition letter)
  • recent report estimates that the regional center program brought a total of $10.98 billion into the country (accounting for roughly 2% of all foreign direct investment net flows into the U.S.), and created more than 355,000 U.S. jobs (representing roughly 6% of private sector job growth), from FY 2014 – FY 2015.
  • Among the principles detailed in the letter, the coalition proposes steps to benefit Targeted Employment Area (TEA) projects in rural communities and distressed urban census tracts designated by the U.S. Treasury Department as “Opportunity Zones.” Both geographic designations are census tract-based and share the common objective to channel investment capital to the nation’s distressed communities. 

The coalition recommends a set-aside of visas to spur EB-5 investments in Rural and Urban Distressed communities.  It also urges Congress to take action to reduce the overwhelming backlog of pending investor petitions that are choking the program and blocking inbound foreign investment capital into the U.S.