New EB-5 Forms: Puzzles to Solve

The EB-5 Regional Center Program’s reauthorization last March prompted much celebration and excitement in the EB-5 community.  After all, it had been almost a year since the program’s sunset, and demand continues to grow for quality EB-5 Regional Center Investor Visa projects.  But the EB-5 Reform and Integrity Act of 2022 did much more than simply renew the Regional Center program…it added numerous and complicated requirements to EB-5 law.

The new law created immediate and pressing demands on USCIS, which has been in an almost dormant state of adjudication inactivity for the past few years. First and foremost, all the complex elements of the new law required long-established Regional Centers – like our own American Ventures Solutions Regional Center – to meet extensive new “integrity” requirements in the law.  But despite the close collaboration between Congressional negotiators and EB-5 industry stakeholders in generating the final language of the law, USCIS’ response to the Integrity act was anything but predictable. Guidance provided to stakeholders by the Service was convoluted and conflicted not only with the clear language of the law but with very public statements made by Congress in crafting the reauthorization. Completely flabbergasted, the industry responded by filing multiple lawsuits and demands for intervention by Congress. 

Perhaps the single biggest USCIS interpretive blunder was in its inexplicable conclusion that the new law somehow “de-authorized” existing, USCIS-approved EB-5 Regional Centers. USCIS concluded that these veteran RCs – like our own AVSRC, USCIS-approved in 2011 – were no longer authorized and had to apply under the new law as if they were just starting anew. Behring, a leader in recent years in challenging EB-5 related misinterpretations and inaction by USCIS, immediately responded by filing a lawsuit in federal court demanding a temporary restraining order against this specific USCIS interpretation, which clearly violates existing administrative laws and policies. 

As the court was about to review the initial pleadings, a bipartisan group of key EB-5 congressmen and senators submitted a letter to the federal judge hearing Behring’s lawsuit, confirming that that USCIS’ had grossly misinterpreted Congressional intent in the new law and enumerating specifically how the new USCIS policy of essentially terminating the status of existing, compliant regional centers violated the law’s purpose.   As of today, multiple lawsuits are pending and DHS Secretary Mayorkas and USCIS have been bombarded with criticism and complaints from EB-5 stakeholders, investors, and government leaders.  As all of this works its way through the US legal system, USCIS has added to the confusion be releasing the new I-956 and I-956H forms, which are intended to replace the I-924 form via which EB-5 Regional Centers have always applied for approval or modifications in the past.

The I-956 is the new application form for Regional Centers seeking to be authorized by USCIS; the I-956H is a second form which seeks very detailed information regarding the backgrounds of persons “involved with a Regional Center”.  Both the forms are designed to address the increased transparency and integrity language in the new law; both were hastily drafted and the results are reflective of what happens when bureaucrats implement regulatory policies without the input of the real-world stakeholders who live and breathe the business the law is regulating. 

There are dozens of excellent articles posted in the past few weeks which carefully examine the specific problems raised in the language of the two forms and it is not my intent to repeat what’s been covered.  Instead, I will give a simple illustration using the opening question on the I-956, which stumped me as I began trying to understand what exactly AVSRC needed to do to make sure we maintain our 11 years of compliance as a USCIS-approved Regional Center.  Consider the screen shot below, representing the opening question on the form:

To USCIS’ credit, notwithstanding their initial position that all existing Regional Centers were no longer approved, the I-956 released last week reflected a distinction between “Initial Applications” vs. “Amendment to an Approved Regional Center”.  With AVSRC approved since 2011, that means we need to file an “amendment”…right?  Well, read on to Question 3.  There are 5 types of “amendments” enumerated:

  1. Changing the name of the Regional Center
  2. Changing its organizational structure
  3. Changing its ownership
  4. Changing who administrates it or
  5. Changing the geographic area in which it operates.

And therein lies my conundrum: not one of those applies to AVSRC! Same organizational structure, same owner, same administration and our new EB-5 project, River Oak, is in the same geographic area we’ve been approved for since 2011.   AVSRC is not “new”….nothing is being “amended”…how do I answer?

At the end of the day, we are collectively navigating a new, complex law and based on Mr. Mayorkas’ prior proven experience, we have reasons to be optimistic about the future of this new incarnation of the EB-5 Immigrant Investor Visa. We shall see how all of this shakes out but, in the meantime, kudos to the newly-revived USCIS for its gallant efforts in sorting all of this out!