DHS Invalidates Behring EB-5 Regional Center Lawsuit, Confirming $500,000 as Minimum Investment

EB-5 regional center final rule to increase the minimum investment requirement for EB-5 projects from $500,000 to $900,000 is dismissed by the Federal Court. The appeal was filed in August 2021.

In the Behring regional center case, the court discontinued implementing the EB-5 modernization rule, which reversed the increased amount from $900,000 to $500,000. The decision now approves all the direct EB-5 cases filed under the previous amount of $500,000, and the earlier rules concerning the regional center investment have officially come into effect.

The EB-5 Modernization Rule that went into effect on November 21, 2019, increased the minimum investment for EB-5 projects from $500,000 to $900,000 for Targeted Employment Area (TEA) and $1 million to $1.8 million for locations outside the Targeted Employment Area (TEA). The U.S District Court issued a judicial order for the Northern District of California to dismiss the Modernization rule and bring back the old investment amount, i.e., $500,000 from $900,000.

How does the dismissal affect investors and Regional Centers?

The California District Court’s decision implies the invalidity of the increased minimum investment amount. Investors who applied the court’s decision need not worry about the additional investments. We assume that investors who filed with a $900,000 investment will get a refund of their money depending on the offering documents signed by the regional center authorities or find new investors replacing the repayments of the committed capital.

It is also said that while the investment amount sticks to $500,000, no one is certain whether filing on such an amount will lead to the application approval or not. And because one is not sure whether the application will go for the evaluation process in 2-3 years, anyone applying at the reduced amount will be taking a risk from both immigration and investment point of view.

To provide clarity to the EB-5 Regional Center industry after the Behring decision, USCIS issued a statement saying that “While USCIS considers this decision, we will apply the EB-5 regulations that were in effect before the rule was finalized on Nov. 21, 2019.”

Where are we now with the EB-5 Program?

Currently, the EB-5 program is going through a roller coaster ride. The regional center category under the EB-5 expired on June 30, 2021. For two decades, the U.S Congress never failed to renew the program, but 2021 brought a sunset to this most popular program. The reason is- the program was detached from regular Congressional renewals, compelling it to lose track and wait for further developments.

Now, there are two types of Direct Investment EB-5 projects available: first, where an overseas investor maintains control, and the second one, where the investor is a minority shareholder in the project. It also requires the investor to create at least ten full-time jobs for U.S citizens. In both, the projects only need investors to invest $500,000.

Since the Regional Center Option is no longer valid, USCIS authorities have more time to process Direct Investments for EB-5 applications, leading to speedy application processing. The fast processing time will lead to fewer complaints, making the EB-5 an attractive option for foreign investors. Additionally, investors can rest assured that the EB-5 Direct Investment Program will continue to play in the field, unlike the Regional Center EB-5 Projects.

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