HB Ad Slot
HB Mobile Ad Slot
What Does the New I-956 EB-5 Regional Center Designation Process Mean for Regional Center Investors?
Friday, May 20, 2022

The new Form I-956 and I-956 H contain a series of certifications and detailed personal information requirements with respect to the integrity and backgrounds of the owners, operators, and officers of the Regional Centers administering investments. These certifications will be reviewed by USCIS and require Regional Center applicants to appear for biometrics. The biometrics will be used by the USCIS along with other government agencies to conduct extensive background and criminal record checks on each person involved in the ownership and/or day-to-day operations of the Regional Center. Likewise, the Regional Center and related entities will need to provide information on their standard operating procedures, protocols for ensuring securities law compliance, and their internal monitoring of the disbursement and use of investor funds, among other things. The incorporation of the integrity measures is meant to discourage and prevent fraud in the EB-5 Regional Center program and boost investor confidence in the Program. The certifications will need to be made on an annual basis, and compliance with all EB-5 provisions will likewise need be monitored through USCIS audits to be conducted at least once every five years and site visits to be likewise be conducted for every project raise that the Regional Center administers by USCIS.

While these measures benefit investors, they do come at a cost to many Regional Centers that will need to pay much more for maintaining compliance with the new requirements. This may result in fewer projects on the market for investors to choose from. For example, as of May 18, 2022, USCIS indicated it had only received 8 I-956 applications for Regional Center designation. It is unclear how long the adjudication process for the new forms will take. Prior to the expiration of the Regional Center Pilot Program, new EB-5 Regional Center designation applications were taking over two years to be adjudicated. USCIS has interpreted the requirements under the EB-5 Reform and Integrity Act of 2022 to require that all previous Regional Center designations are null and void and anyone wishing to participate in the Program on a go-forward basis will be required to file the Form I-956. Only once that Form I-956 is approved will the Regional Center be able to move on to the second step of the process, which is to file a Project Exemplar filing requesting project pre-approval from USCIS; this will also include if applicable a Targeted Employment Area (TEA) designation request. Investors can only file their applications after the exemplar is submitted (not approved under the USCIS interpretation).

All of this makes the timeline for submission of I-526 Regional-Center-based investor petitions unclear, and no information has been forthcoming from the Agency as of this writing.

HB Ad Slot
HB Ad Slot
HB Mobile Ad Slot
HB Ad Slot
HB Mobile Ad Slot
 
NLR Logo
We collaborate with the world's leading lawyers to deliver news tailored for you. Sign Up to receive our free e-Newsbulletins

 

Sign Up for e-NewsBulletins