EB-5 reg nears publication

On June 27, 2019, the regulation for EB-5 Immigrant Investor Program Modernization (RIN: 1615-AC07) completed OMB review (Step 8 in the rulemaking process). This advances the rule toward the final rule-making step: publication in the Federal Register.

USCIS will make an announcement when the Final Rule is published in the Federal Register. You can sign up on the USCIS Federal Register Announcements page to get notified by email. The announcement could come any time now. The announcement will link to final rule text in the Federal Register. (Filter for “Final” rules on the Announcements page to see examples of past rules.) Until publication, the content of the final rule is unknown. The provisions will bear on EB-5 investment amounts and targeted employment area matters, but we do not know the specifics. (We know the content of the proposed rule from January 2017, but not what changes USCIS and OMB have made to the rule since then.)

The final rule will stipulate an effective date. The effective date will likely be 30 days after publication, since the rule has not been classed as “major” or “significant.” It might be later. (According to “When do final rules go into effect?” on page 8 in The Rulemaking Process.)

Rules created by administrative agencies should only possess a prospective effect, according to the Federal Administrative Procedure Act. (See Prospective and Retroactive Effect of Rules.) The Proposed Rule version of the EB-5 regulation explicitly applied investment amount changes to future I-526 filings only: “Unless otherwise specified, for EB-5 immigrant petitions filed on or after [INSERT EFFECTIVE DATE OF FINAL RULE], the amount of capital necessary to make a qualifying investment in the United States is….”

During the period between Federal Register publication and effective date, the rule is sent to Congress and the Government Accountability Office for review. Congress has almost never disapproved a rule at this point, however. (See “How is the Congress in involved in reviewing final rules?” on p. 10 in The Rulemaking Process). The regulation can also be subject to court review, if someone sues in federal court to block the regulations, based on a claim of adverse effects from the regs. (See “When do the courts get involved in rulemaking?” in The Rulemaking Process and an example of this happening.)

For now, I am not placing bets on the content or timing of the EB-5 regulation. I will wait and see, and update my Washington Updates page with any news.

In the meantime, issuers will want to hustle to complete raises under the existing rules. Prospective investors will want to balance their interests, weighing the advantage of current investment opportunities and the risks in being part of a filing surge. ILW foresees a potential 2,000 EB-5 investments from Indians in the next month or so. If realized, that surge would add about six years to an India backlog already well over eight years long. Some investors have high tolerance for long waits, but must be informed about timing issues and the associated immigration risks and investment risks.  The future direction of the EB-5 program will depend on the changes included in the final rule – but we’ll have to wait and see what those may be.

About Suzanne (www.lucidtext.com)
Suzanne Lazicki is a business plan writer, EB-5 expert, and founder of Lucid Professional Writing. Contact me at suzanne@lucidtext.com (626) 660-4030.

5 Responses to EB-5 reg nears publication

  1. tpk129 says:

    Thanks for the info Suzanne!

    Read the ILW email and came away with a great deal of nervousness and hope that this many people won’t get involved with the disaster awaiting them from an investment and lifestyle standpoint. The wait will be forever and the chance that their investment will be there at the end of the day is quite small….just the time value of money will erode most of what they put in.

    I think, or perhaps hope, the ILW is overestimating demand to enrich themselves. Is there really 2,000 slots just for Indians in Regional Center projects at this point?

    • Arunkumar says:

      I think they are overestimating being a Indian I delayed my investment for my son as I heard it has 8 years backlog, I bet in the next few months the numbers from whole of India will not cross hundreds it’s too Long a wait if it crosses 7 years them redeployment has to be done Indians thinking of investing 3.5 crores are aware of financial assessments and India is not China its a democracy so people are happier here I feel unless the wait time come below 4 years many Indians will think or other avenues or countries they will not invest in EB5 this is my view, and even the investment is increased the policy makers should make sure the process is fast and investors get conditional green cards in 1 or 2 years

      • Harry says:

        Wait of 7+ years and $1M+ investment will end the interest of most of Indians..!! Anyway Canada is becoming the go to place for many tech Indians due to easy immigration policy & lot of start ups and Development center of big wigs like IBM & Accenture.!! I guess we are in brink of killing the golden goose specially by delaying approval of I-526 ( which take 2 yrs just for approval)..!! Hope sense prevails soon..!!

        • kishore says:

          2 years wait time its now 45 months. next up they will make it 72 months and no one can ask questions.

  2. Kelly says:

    Once an industry makes money, everyone rushes in until the market dies, for example maybe EB5.

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