Nine years after Congress passed a law intended to help certain "stranded" EB-5 immigrant investors, U.S. Citizenship and Immigration Services (USCIS) has finally proposed a rule. Because of USCIS's long delay in publishing the rule, however, as well as certain interpretations and ambiguities in the proposed rule, it would hurt, not help, many of the affected EB-5 investors. EB-5 expert Stephen Yale-Loehr, co-author of Immigration Law and Procedure, the leading immigration law treatise published by LexisNexis Matthew Bender, explains why.
"U.S. Citizenship and Immigration Services (USCIS) has published a proposed rule that purports to help certain EB-5 immigrant investors hurt by actions that the legacy Immigration and Naturalization Service (INS) took against them in 1998. 76 Fed. Reg. 59,927 (Sept. 28, 2011). The proposed rule would implement a 2002 law intended to help such investors. Because of the USCIS's long delay in publishing the rule, however, as well as certain interpretations and ambiguities in the proposed rule, the rule would hurt, not help, many of the affected EB-5 investors."Congress created the employment-based fifth preference (EB-5) category in 1990. The Immigration Act of 1990, Pub. L. No. 101-649, 104 Stat. 4878. The Immigration and Nationality Act (INA) sets aside approximately 10,000 green cards each year for immigrants who invest $1,000,000 in a commercial enterprise that will benefit the U.S. economy and create or save at least ten jobs for U.S. workers. INA § 203(b)(5), 8 U.S.C. § 1153(b)(5); 8 C.F.R. § 204.6. The investment level is reduced to $500,000 if the job-creating business is in a rural or high unemployment area. INA § 203(b)(5)(C)(ii), 8 U.S.C. § 1153(b)(5)(C)(ii); 8 C.F.R. § 204.6(e). Investors who satisfy these requirements first file Form I-526. After that is approved they go through consular processing or adjustment of status. They are then granted conditional resident status for a two-year period.An EB-5 investor must file Form I-829 two years after becoming a conditional resident. The statute requires the USCIS to remove the condition if the investor demonstrates that he or she: (i) invested or is in the process of investing the requisite capital; (ii) sustained the investment throughout the conditional residence period; and (iii) is otherwise conforming to the statutory requirements. INA § 216A, 8 U.S.C. § 1186b. The regulations also require an investor to provide evidence that the investment has created, or will create within a reasonable period of time, ten full-time jobs for U.S. workers. 8 C.F.R. § 216.6(a)(4)(iv).In 1998, without notice or opportunity to comment, the INS changed the requirements for the EB-5 program, making it more difficult for new investors to qualify."
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