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Five EB-5 regional center operators, along with the EB-5 trade organization Invest in the USA, have filed a lawsuit against U.S. Citizenship and Immigration Services challenging the way USCIS interprets the law reauthorizing the EB-5 regional center program.
The suit was filed in the District Court for the District of Columbia in response to USCIS requiring all of the regional centers that already existed to apply anew and receive approval from the agency before doing business again.
Under the previous EB-5 program, which awards permanent residency status to investors in the U.S. economy under specified conditions, the vast majority of applications for such visas were handled by regional centers. Over its decades in existence, EB-5 investors have provided a significant source of capital for a number of U.S. businesses, especially real estate development.
In March, Congress passed the omnibus appropriations bill that included the EB-5 Reform and Integrity Act of 2022, and President Joe Biden signed it into law. When Congress allowed the program to lapse in mid-2021, the regional centers that handled most of the visa applications lost their authorization.
The agency asserts that those regional centers need to reapply to become centers again because the new law repealed the part of the 1993 law governing regional centers.
"Therefore, regional centers previously designated under [the old law] are no longer authorized," USCIS states. "The EB-5 Reform and Integrity Act of 2022 requires all entities seeking regional center designation to provide a proposal in compliance with the new program requirements."
The five regional centers — CanAm Enterprises, Civitas Capital Group, EB5 Capital, Golden Gate Global and Pine State Regional Center — and IIUSA contend that the agency is in error with the interpretation and thwarts congressional intent in reviving the EB-5 program.
"We believe Congress intended to allow regional centers to immediately get back to the business of EB-5 — while at the same time working to bring themselves quickly into compliance with the new integrity and other requirements of the RIA," the plaintiffs said in a joint statement.
"In fact, there is consensus within the EB-5 industry that Congress intended to have the Regional Center program back in business as soon as the RIA was in effect on May 15, 2022.”
The five operators collectively manage 26 regional centers across 21 states. Over the years, they have facilitated $5.3B in EB-5 investments, developing 143 projects nationwide.
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