Summary of the Draft EB-5 Reform Act

by Saul Ewing Arnstein & Lehr LLP

There appears to be significant momentum from the Republican contingent in the Senate and the House to pass an EB-5 reform bill entitled, "The EB5 Immigrant Investor Visa and Regional Center Reform Act" (the "Draft Bill") in a bid to attach the Draft Bill to the Omnibus on or before March 22nd.  As of the date of this blog, the Congressional Staffers tasked with writing the Draft Bill continue to make revisions and clarifications in a hope to garner support from the EB-5 industry. Therefore, the projected changes discussed herein remain subject to change. This author cautions readers to take note of the fluidity attached with the political process surrounding the Draft Bill’s ongoing negotiations.

What is clear is that if the Draft Bill passes in the form last circulated on or around March 10, 2018, it will dramatically change the EB5 program.  

The positive content in the Draft Bill includes:

  • the extension of the EB-5 program until September 30, 2023;
  • removal of any concerns related to retroactive application of the new provisions meaning that those investors who have filed or will file their I-526 petitions prior to the effective date will receive the benefit of the lower investment amount and the TEA status as of the time of filing;
  • the ability to priority process projects that meet set-aside criteria as set forth below; and
  • the ability, in the event of visa availability, to have concurrent filings of the I-526 petition and adjustment of status.

The Draft Bill contemplates a 120-day moratorium where no EB-5 related applications filings (I-526s or I-924s) would be accepted in an effort to allow USCIS to address the backlog of thousands of pending I-526, I-829 and I-924 petitions and to, otherwise, allow certain procedures to be implemented for the Draft Bill’s go-live date.  

Below are some of the highlights of some of the Draft Bill’s proposed changes:

Minimum Investment Amount

Increase the minimum investment from $500,000 to $925,000 for set-aside projects described below, and from $1,000,000 to $1,025,000 for non-set-aside projects.

Priority Urban Investment

Creates a new category of investment entitled “Priority Urban Investment” similar to the New Market Tax Credit Criteria. In order to qualify, a project must meet at least two of the three criteria: 1) unemployment rate of at least 150% of national level 2) poverty rate of at least 20% or 3) median family income that is not more than 80% of the greater of the statewide median family income or MSA median family income. A total of 1,450 visas are anticipated to be allocated to this category.

Rural Set-Aside

This is defined as a city/county, or an area consisting of census tract or adjacent tracts, outside the outer boundary of any city or town having a population of 20,000 or more, outside a MSA, within a county in a MSA having a population density of less than 225 persons per square mile, OR within any census tract greater than 100 square miles in an area and has a population density of fewer than 100 people per square mile. A total of 1,450 visas are anticipated to be allocated to this category.

Set-Aside for Infrastructure Projects

Homeland Security will determine such designations within 120 days, publish rural and priority urban areas or other criteria that will qualify, and the Secretary of Homeland Security will determine infrastructure classifications and will not be bound by any private or government entity on such designations. A total of 200 visas are anticipated to be allocated to this category.

Job Creation

There are anticipated changes from the current requirement of 10 full-time jobs per petitioner to be created as follows:

  • 12 full-time positions for United States employees, or
  • nine full-time positions for United States employees where the investment is made in a capital investment project:

    • physically located entirely in a rural or priority urban investment area,
    • physically located entirely in a U.S. territory,
    • physically located entirely within the geographic boundaries of any military installation that was closed, during the 25-year period immediately preceding the filing of an application for classification as an immigrant investor under this section, based upon a recommendation by the Defense Base Closure and Realignment Commission (“BRAC”), or
    • funded through a small business investment fund or a franchise fund.

Reserved Visas

The Draft Bill reserves 3,100 visas per year for those immigrants who invest in capital investment projects physically located entirely in rural areas (1,450), priority urban investment areas (1,450) and infrastructure projects (200) (as explained above).   

Source of Funds

Consistent with USCIS policy over the last couple years, the EB-5 Petitioner must source funds for both the investment capital and the administrative fees; provide seven years of tax returns both personal and corporate entities; if applicable, disclose any criminal, civil or administrative judgment/proceedings involving the EB-5 Petitioner; and, has been seemingly required under RFEs over the last year, the identity of all persons who transfer capital into the US on behalf of the EB-5 Petitioner.  Most crucially, it appears the EB-5 Petitioner cannot use non-US assets, such as homes, to secure financing to fund the EB-5 investment. This last point will drastically impact the ability of many investors who have, heretofore, been dependent on using home equity to fund their respective EB-5 petitions.

Premium Processing

Permits for the next six years filing of premium processing for rural areas and priority urban investment for a cost of $5,000. This is an interesting concept but one that author wonders is practical.  USCIS is simply not sufficiently staffed to allow for premium processing of these applications.

Concurrent Filing

Permits filing of AOS application if I-526 is filed and priority date is current.


If the I-526 petition has been approved before date of enactment, the EB-5 Petitioner may be able to amend his or her petition to seek redesignation to rural or PUIA or infrastructure, if the application is filed one year from date of enactment.  Immigrant visa priority dates can be retained and the same will not be deemed a material change; and the minimum investment amount will not be affected.  Note, this appears to be a point of contention and could get modified.

Adjustment of the EB-5 investment amount

Every three years based on CPI.  Adjusted amounts will be effective 90 days after publication.

Amendment for a Regional Center designation

The regional center must provide advanced notice of 45 days and the changes must be publicly disclosed through a website maintained by USCIS.

Regional Center Fees

There will be annual fees of $20,000 or $10,000 if the regional center supports less than 20 investors per calendar year.

Investor Filing Fees

$1,000 per each I-526 petition for the government fund and an extra $25,000 fee, with $12,500 paid by the regional center and $12,500 paid by the petitioner.  As a practical matter, it is likely that the investors’ administrative fee will be increased by $12,500 to cover the regional center portion of this fee. Such additional fees will make the program all the more expensive for EB-5 Petitioners.

Site Visits

It is contemplated that there will be even more site visits and audits of regional centers and projects and even investigations outside the US to combat fraud.

EB-5 Integrity Measures

It is contemplated that there will be significantly more stringent reporting and record-keeping requirements; background checks of all persons involved with Project (including JCE, NCE and investors); no foreign government involvement (this point requires some clarifications); annual site visits, the regional center would  need to certify compliance with SEC rules; 5-year record keeping requirements for the regional center; registration of direct and third party promoters with USCIS; certification of disclosure of fees and commissions paid to promoters. Each I-526 petition needs to be filed with the certification. The compliance burden on regional centers will increase dramatically and there will be a significant cost related thereto. The congressional intent appears to preclude foreign national ownership (excepting US residents) of interests or managerial control of regional centers.  

Treatment of Good Faith Investors in failed or troubled projects

Once the I 526 Petition is filed and approved, EB-5 Petitioners will still be allowed to remove conditions, etc. if within 180 days the NCE associates with an approved RC and EB-5 petitioner makes a qualifying investment in a new NCE. The EB-5 Petitioner will be eligible to remove conditions beginning on a date that is 2 years after the date of subsequent investment.

Petition from Qualified Alien Investors

If the investment is made at least 24 months before admission of petitioners to the US, the Petitioner may be granted lawful permanent residency without conditions.


If a subsequent petition needs to be filed and meets all requirements, children will retain age if filed not less than one year after termination of CPR.


USCIS shall not provide preferential treatment to any regional center or project and subjects USCIS the employee violator to fines if such preferential treatment is provided.

The Bill is undergoing many reiterations and a copy shall be made available once same becomes public.


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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