United States: EB-5 Regional Center Program Temporarily Extended; Changes Expected

Last Updated: December 10 2015
Article by Jeffrey W. Pitts

The continuing resolution that President Obama signed into law on September 30, 2015, that averted the federal shutdown included a critical extension of the EB-5 Regional Center Program.

The extension for the Regional Center Program permits immigrant investors to continue to file EB-5 petitions through a Regional Center under the current investment threshold. In addition to extending the current program to December 11, 2015, this temporary reprieve provides additional time for Congress to consider a long-term reauthorization bill that would include reforms to the current eligibility requirements. Prior to the sun-setting of the program, there was much debate in Congress over changes that are believed needed to strengthen federal oversight and the integrity of the program. Although most practitioners in the EB-5 arena believe a permanent reauthorization is likely, it is also believed there will be changes that will impact both individual investors as well as developers and Regional Centers.

What Is the EB-5 Immigrant Investor Program?

Congress initially created the EB-5 immigrant investor program in the Immigration Act of 1990 in the hopes of attracting foreign capital to the U.S., creating jobs for American workers in the process. In 1993, Congress amended the program by allowing for "regional centers" located in a Targeted Employment Area ("TEA") to promote "economic growth" through the creation of jobs and "increasing domestic capital investment." Often termed "Economic Citizenship," the EB-5 program provides a mechanism for foreign nationals to invest in the U.S., create jobs, and ultimately receive U.S. lawful permanent residence (a green card). The United States is one of many nations that have created a regulatory scheme that used immigration as a way to infuse capital into its economy. There are two methods to pursue permanent residence through the EB-5 Program. Under the first, a foreign investor must invest one million dollars into a new commercial enterprise that will hire at least 10 U.S. workers. The second method allows the investor to invest in Regional Center projects located in a TEA (high unemployment or rural areas), reduces the investment threshold from one million to $500,000, and allows for indirect and induced jobs to count towards the job creation requirements. The EB-5 Program was not being widely utilized until approximately six years ago, when United States Citizenship and Immigration Services ("USCIS") changed its interpretation on how construction jobs could count toward the job creation requirements. Once the interpretation of construction jobs changed, real estate developers started to aggressively use the program to secure investment capital. Regional Center projects have been used extensively by developers over the past several years, and the foreign capital attracted has been a major source of funding for some of the largest development projects across the United States. EB-5 Regional Center investments have helped finance the construction of a New York sports arena, the Philadelphia Convention Center, and a Vermont ski resort and waterpark; helped provide financing for a Hollywood movie studio; and even financed the construction of the FBI office building in San Diego. The impact to the U.S. economy has been dramatic. A report by U.S. Policy Metrics and Hamilton Place Strategies indicates that between 2005 and 2013, the EB-5 Program generated a minimum of $5.2 billion in private investment. Estimates on the amount of jobs created through EB-5 investments reach upwards of 131,000.

Criticism of the EB-5 Program

Last year, ABC news reporter Brian Ross ran a series of investigative articles concerning the EB-5 Program. Mr. Ross focused on what he deemed to be weaknesses in the program's vetting of the individual investors and whether permitting foreign investors into the United States posed national security concerns. In addition, a recent Government Accountability Office ("GAO") report was critical of the EB-5 Program. The report, "Immigrant Investor Program: Additional Actions needed to Better Assess Fraud Risks and Report Economic Benefits," resulted in Senator Charles Grassley (R-IA), Chair of the Senate Judiciary Committee, saying, with respect to the Regional Center Program, that the status quo was not acceptable and legislation to reform the program was needed. The negative coverage of the EB-5 Program and the overall polarization of immigration in general started to culminate right as the Regional Center Program was coming to a sunset. As September 30, 2015, approached, there were several proposed bills being discussed that would make significant changes to the program. One bill, the EB-5 Reauthorization and Reform Bill, was introduced by Grassley and Judiciary Committee Ranking Member Patrick Leahy (D-VT). The House reauthorization bill was introduced by Representatives Mark Amodei (R-NV) and Jared Polis (D-CO).

The next two months leading up to December 11, 2015, will surely see a continued push for action on reauthorizing and reforming the Regional Center Program. The changes will be hotly debated in Congress as well as in public forums. But it is hard to see any permanent reauthorization without several areas of the program receiving significant changes.1

Raising the Investment Thresholds

A lot of the debate regarding the EB-5 Program has centered on the amount of investment required in order to use the program. As stated above, the current regulations require a foreign investment of either one million dollars, or $500,000 if going into a TEA. Several of the proposals for reforming the program have suggested increases in the threshold investments—taking the one million up to $1.2 million, and the $500,000 for TEAs to $800,000. Program proponents have argued that any increase in capital investment requirements will result in fewer investors being attracted to the program, and thus less money being injected into the economy to spur development and create jobs. Others argue that the raise in capital investment requirements will only make the U.S.'s program more competitive with other countries that have an "Economic Citizenship" program, like the U.K. (which requires two million British Pounds—or approximately three million U.S. dollars), and Canada (requires two million Canadian dollars or approximately $1.5 million U.S. dollars).

Defining What Constitutes TEAs

Another area that has received focus by Congress and detractors is the use of the TEAs in order to qualify for the lower investment threshold. When Congress created the program, it was intended to help high unemployment areas, as well as to spur development and investment in rural areas that do not often receive a major influx of international investment. Under the current regulations, each state is able to make TEA determinations and have different criteria on establishing that a given EB-5 project is within the TEA. As many of the well-known and large-scale EB-5 projects have been in Manhattan, Los Angeles, and Miami, regulators are questioning whether to continue to let states make this determination. Many believe Congress will "federalize" the TEA standards and/or include additional efforts to have the funds placed in rural investments. Others point to the fact that foreign investors are more inclined to invest in well-publicized projects in major cities, which they may have visited or are otherwise more familiar to them than other cities.

Increased Financial Disclosure and Source of Funds Scrutiny

Developers and projects seeking EB-5 funding will likely be required to disclose much more information about how the EB-5 investment capital is being utilized. There have also been suggestions that the program should include provisions prohibiting the use of EB-5 funds by developers and others with criminal backgrounds. Investors also will likely be subjected to more scrutiny, including even more disclosure and evidence as to their "source of funds," to ensure they were obtained lawfully. One congressional proposal would even limit the sources of funds—like eliminating monetary gifts from a friend.

Proponents of these changes have argued that they will only strengthen the program by eliminating opportunities for fraud or misuse of the investment funds, and ensuring that foreign investors are not using the program to launder illicit money and do not have ties to unsavory organizations.


Over the next two months we will certainly witness a debate, at times vitriolic, regarding the weaknesses and benefits of the EB-5 Program. Many are hopeful that a Regional Center reauthorization and reform bill will be passed prior to the end of the extension, December 11, 2015. If that does not occur, the future of the program is unclear and tied up in whether Congress can reach an agreement on spending priorities and pass an Omnibus appropriations bill in December, or another Continuing Resolution to avoid a government shutdown later this year. Whenever Congress does reauthorize the EB-5 Program, the hope is that it will be a permanent reauthorization, and one in which the reforms do not limit or impede the huge economic impact the program has generated for the U.S. economy.


1 On November 6, 2015, Senators Charles Grassley, Chairman of the Committee on the Judiciary, Bob Corker, Chairman of the Committee on Foreign Relations, and Ron Johnson, Chairman of the Committee on Homeland Security and Government Affairs, sent a letter to Senate Majority Leader Mitch McConnell and Minority Leader Harry Reid opposing a straight reauthorization of the EB-5 Regional Center Program.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

*** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.