The Immigrant Investor Program, commonly known as the EB-5 Program, was introduced through the United States Congress’ Immigration Act of 1990 (IMMACT90). This act, which included modifications to non-immigrant visa categories, deportation regulations, and amplified the legal immigration limits, among other key revisions, also gave rise to the EB-5 Program. The objective of the program was to encourage foreign entrepreneurs to invest in an American commercial enterprise and in turn, stimulate the U.S. economy. The program offers foreign investors the opportunity to permanently reside and work in the United States by providing them with a means to obtain a green card and potentially citizenship. In 1993, the Immigrant Investor Pilot Program was created to promote the EB-5 visa program. The pilot program authorized the establishment of EB-5 Regional Centers, which are business entities that have been granted special designation from the United States Citizenship and Immigration Service (USCIS) to administer EB-5 investments and create jobs.
Subsequently, in the late 1990s, a series of significant reforms were made to the EB-5 program. These reforms were prompted by the discovery of lenient regulation enforcement and fraudulent EB-5 investment schemes. The fraudulent schemes were uncovered in the U.S. District Court case of U.S. v. O’Connor. Following the case, the Administrative Appeals Office (AAO), the appeals unit of USCIS, amended the EB-5 requirements in 1998 to require investors to furnish proof that EB-5 investments originate from lawful sources and that investors are personally involved with their EB-5 project, and they prohibited investment return guarantees. USCIS attempted to apply these new regulations retroactively to previous EB-5 cases, but the ruling in Chang v. U.S. made this practice illegal. The number of EB-5 applicants declined significantly after the new regulations were enacted.
During the 1990s, the AAO made several precedent decisions on program requirements, including the type of commercial entity that can take EB-5 investment, the qualifications for legal source of funding, and how the investment can be administered. The four important decisions made by the AAO in the 1990s, Matter of Ho, Matter of Hsiung, Matter of Izummi, and Matter of Soffici, are still binding on current EB-5 applications.
In 2003, Congress passed the Basic Pilot Program Extension and Expansion Act to revitalize the EB-5 program. This act compelled the Government Accounting Office (GAO) to undertake a thorough investigation into the EB-5 visa program. The investigation found that only a fraction of the 10,000 visas allocated to the EB-5 program were being granted each year. This discovery prompted additional program reforms. One of the reforms was the establishment of the Investor and Regional Center Unit (IRCU) in 2005 to oversee the EB-5 program.
In 2009, USCIS issued revised EB-5 policy guidance, centralizing EB-5 processing at the California Service Center and making other changes. In July 2019, USCIS published a rule of EB-5 modernization changes, which included increasing investment amounts and other changes that took effect on Nov. 21, 2019. In March 2022, Congress reauthorized the EB-5 Regional Center program through the EB-5 Reform and Integrity Act of 2022. This act reauthorized the program through September 30, 2027, and set investment requirements at $1,050,000 or $800,000 in high unemployment areas.
Read about EB5 Processing guidance in 2023 here