If the EB-5 regional center pilot program is not extended by September 30, 2012, pending regional center applications and individual EB-5 applications could be severely impacted. The following bullet points are meant to outline the impact that a sunset of the program would have on both pending I–924, Applications for Regional Center Designation and amendments as well as on I-526, Immigrant Petitions filed by Alien Entrepreneurs.
- New applications for initial regional center designation will not be accepted beyond the date of the Pilot Program’s sunset.
- Amendments to existing regional center designations requesting additions or changes to industry or NAICS codes, change in geographic scope, changes in economic methodology will not be accepted.
- Those applications that are currently under review by USCIS will be held for an indeterminate period of time pending further action by Congress to renew the program.
- Pending EB-5 applicants could no longer benefit from indirect or induced job creation.
- To be approved, the I-526 petition would need to include evidence that the project resulted in the creation of ten DIRECT jobs per investor. The jobs would need to last two years or more to be considered permanent and would need to be full-time i.e. 35 hours per week or more. At the I-829 stage, the applicant would need to prove that these jobs were held by qualified U.S. workers which includes: U.S. citizens, lawful permanent residents, refugees, asylees or persons granted cancellation of deportation from the U.S. USCIS would either render decision on evidence already submitted to the Service with the initial application or through the issuance of a Request for Evidence (RFE) requesting documentation of direct job creation.
- USCIS defines direct jobs as those created by the new commercial enterprise. Presumably, jobs created by the project company, thought they are defined as direct jobs by economists, would be disallowed under EB-5 program standards. This in effect would render the debt or equity model from EB-5 Investment Vehicle or Fund (“New Commercial Enterprise”) to Project (“Job Creating Enterprise”) obsolete. Instead, the new commercial enterprise would need to be the project company and create direct jobs to create qualifying jobs. This would make the program less attractive to many companies who would not want foreign investors to be directly involved in the project company.
- All I-526 petitions received prior to the expiration of the program will be held in abeyance absent action by Congress.
We have received reports that many agents abroad, particularly in China, are communicating to investors that they must file their application prior to September 30th to qualify for the EB-5. The same advice is being given to projects and regional center applicants. Unfortunately, based on guidance issued by USCIS in 2009 at the time of the previous sunset, the only way that applicants could qualify would be as described above.
Source: EB5Investors (K.K.)