Policy

Limited window opens up for EB-5 seekers before new rules come in: Expert

V Rishi Kumar Hyderabad | Updated on June 23, 2021

There is no given timeline for which this change may be valid

The EB-5 Rule, which allows Indian investors to invest $5,00,000 in the US under immigrant investor program, now under consideration to be hiked to $9,00,000 and challenged in a US Court, provides some limited window for people to apply, according to a US based law firm.

There may be an opportunity in the coming days or weeks, for a limited period to file a new EB-5 application at the reduced $5,00,000. There is no given timeline for which this change may be valid, but this offers Indian investors an opportunity to apply for the program at a reduced amount.

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According to Mark Davies, Global Chairman, Davies & Associates, LLC, “Within hours of the court decision, our firm received scores of inquiries from Indian investors who were hoping to avail the opportunity to invest in an EB-5 qualifying project at $5,00,000. While a window now exists until June 30 when the current RC program expires, the next 24 to 48 hours are crucial as a response from USCIS is anticipated.”

‘Administrative actions’

“This could include filing an appeal or taking other administrative actions to close this $5,00,000 window. This means that clients who had EB-5 cases pre-prepared for filing at $5,00,000 may be able to file immediately, while others may not be able to file a case at $5,00,000 given the time frame and contingencies involved.”

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“This also raises the question of responsible partial filing. If carefully structured using escrow accounts and special Fixed Deposit accounts in India and the US, that only allows for maturing funds to be remitted to the Regional Center, partial funding can be executed in a low-risk manner. It will be interesting to see how the Regional Centers respond in the coming hours.”

Commenting on the developments, Suresh Rajan, Executive Chairman and Founder of LCR Capital Partners, said, “As we approach the EB-5 sunset date of June 30, the possibilities about what will happen to the program are many. While we hope for reform and long term reauthorisation, we understand we may reach the sunset date before the EB-5 Reform and Integrity Act of 2021 bill gets to be voted on. We also acknowledge a short term extension would need to be voted separately unless it is attached to another bill. In case there is a lapse on the program, may it be a short term one, as it has happened before, so that investors who already applied and their families do not get harmed.”

The pending decision on the increase in the minimum investment amount for the EB-5 program came to a conclusion earlier today. The EB-5 Final Rule was Invalidated by Federal Court Without Injunction Preventing Rule Reinstatement by Secretary Mayorkas.

On June 22, Judge Jacqueline Scott Corley of the US District Court of the Northern District of California issued an order granting summary judgment in Plaintiff’s favour in the matter of Behring Regional Center LLC Vs Chad Wolf, et al.

Published on June 23, 2021

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