Department of Homeland Security (DHS) United States Citizenship and Immigration Services(USCIS) Administrative Appeals Office (AAO) And Immigrant Investor Program Office (IPO) Washington, DC

by Joseph P. Whalen



                                                                                          Dated this 3rd day of August, 2022

I. Introduction

On March 15, 2022, President Joe Biden signed into law P. L. 117-103, Consolidated Appropriation Act, 2022, which included within it the legislation known as the EB-5 Reform and Integrity Act (RIA).  The EB-5 RIA repealed the much earlier Appropriation Act or 1993, Sec. 610,  which passed in 1992 and was the original source of the legal authorization for the Immigrant Investor Regional Center Program.  That authority had never been a part of the Immigration and Nationality Act (INA) until this most recent legislation.  This brief is offered in a gesture of friendship from an interested member of the general public who has been involved in EB-5 cases for many years both inside and outside of government. 

Many things have been ordered changed as a result of this legislation but the changes like all changes take time. However, some things stayed the same.  There are gradations to the changes. Some are drastic while others are minor and still more are a mere codification of things that have come into being organically over the history of the program.


I will begin with a brief history of the concept of investment as the basis for immigration. It was originally NOT an investor visa classification but rather a labor certification exemption for a “special nonpreference immigrant visa or adjustment” that has its roots in the 1965 Act which significantly changed the immigration laws. One particular ambiguity was utilized and interpreted in order to provide for investment as a basis for immigration to the United States. The former “Special Immigrant” Nonquota/Nonpreference Visa was issued pursuant to former INA § 101(a)(27) [8 USC § 1101(a)(27)] as a Regulatorily Defined Labor Certification Exemption for an “Investor” as an Interpretation of the “Other Qualified Immigrant” found in former INA § 203(a)(8) [8 USC § 1153(a)(8)].

Legacy INS promulgated 8 CFR § 212.8(b)(4). pertaining to labor certification exemptions, in the Federal Register in 1966. This immigration benefit first appeared in the Code of Federal Regulation (CFR) in 1967. This employment creation visa category was made statutory by Congress in 1990, at INA § 203(b)(5) as employment-based 5th preference: EB-5.

The original process allowed for a Form I-485, Adjustment Application to be filed concurrently with, and supported by, a completed prior version of Form I-526 then entitled: Request for Determination that Prospective Immigrant is an Investor or an application could be made to a Consular Officer abroad to facilitate their entry to pursue an investment. At that time, DOS and INS[1] regulations fixed or locked a priority date obtained by a Consular Officer even if the basis for the exemption later changed.  

III. 8 USC §1153 (INA § 203) (b)(5) Employment Creation.

(D) Definitions

In this paragraph:

(i) Affiliated job-creating entity

The term "affiliated job-creating entity" means any job-creating entity that is controlled, managed, or owned by any of the people involved with the regional center or new commercial enterprise under subsection (b)(5)(H)(v).

(ii) Capital

The term "capital"-

(I) means cash and all real, personal, or mixed tangible assets owned and controlled by the alien investor, or held in trust for the benefit of the alien and to which the alien has unrestricted access;

(II) shall be valued at fair market value in United States dollars, in accordance with Generally Accepted Accounting Principles or other standard accounting practice adopted by the Securities and Exchange Commission, at the time it is invested under this paragraph;

(III) does not include-

(aa) assets directly or indirectly acquired by unlawful means, including any cash proceeds of indebtedness secured by such assets;

(bb) capital invested in exchange for a note, bond, convertible debt, obligation, or any other debt arrangement between the alien investor and the new commercial enterprise;

(cc) capital invested with a guaranteed rate of return on the amount invested by the alien investor; or

(dd) except as provided in subclause (IV), capital invested that is subject to any agreement between the alien investor and the new commercial enterprise that provides the investor with a contractual right to repayment, such as a mandatory redemption at a certain time or upon the occurrence of a certain event, or a put or sell-back option held by the alien investor, even if such contractual right is contingent on the success of the new commercial enterprise, such as having sufficient available cash flow; and

(IV) includes capital invested that-

(aa) is subject to a buy back option that may be exercised solely at the discretion of the new commercial enterprise; and

(bb) results in the alien investor withdrawing his or her petition unless the alien investor has fulfilled his or her sustainment period and other requirements under this paragraph.

(iii) Certifier

The term "certifier" means a person in a position of substantive authority for the management or operations of a regional center, new commercial enterprise, affiliated job-creating entity, or issuer of securities, such as a principal executive officer or principal financial officer, with knowledge of such entities' policies and procedures related to compliance with the requirements under this paragraph.

(iv) Infrastructure project

The term "infrastructure project" means a capital investment project in a filed or approved business plan, which is administered by a governmental entity (such as a Federal, State, or local agency or authority) that is the job-creating entity contracting with a regional center or new commercial enterprise to receive capital investment under the regional center program described in subparagraph (E) from alien investors or the new commercial enterprise as financing for maintaining, improving, or constructing a public works project.

(v) Job-creating entity

The term "job-creating entity" means any organization formed in the United States for the ongoing conduct of lawful business, including sole proprietorship, partnership (whether limited or general), corporation, limited liability company, business trust, or other entity, which may be publicly or privately owned, including an entity consisting of a holding company and its wholly owned subsidiaries or affiliates (provided that each subsidiary or affiliate is engaged in an activity formed for the ongoing conduct of a lawful business) that receives, or is established to receive, capital investment from alien investors or a new commercial enterprise under the regional center program described in this subparagraph and which is responsible for creating jobs to satisfy the requirement under subparagraph (A)(ii).

(vi) New commercial enterprise

The term "new commercial enterprise" means any for-profit organization formed in the United States for the ongoing conduct of lawful business, including sole proprietorship, partnership (whether limited or general), holding company and its wholly owned subsidiaries (provided that each subsidiary is engaged in a for-profit activity formed for the ongoing conduct of a lawful business), joint venture, corporation, business trust, limited liability company, or other entity (which may be publicly or privately owned) that receives, or is established to receive, capital investment from investors under this paragraph.

(vii) Rural area

The term "rural area" means any area other than an area within a metropolitan statistical area (as designated by the Director of the Office of Management and Budget) or within the outer boundary of any city or town having a population of 20,000 or more (based on the most recent decennial census of the United States).

(viii) Targeted employment area

The term "targeted employment area" means, at the time of investment, a rural area or an area designated by the Secretary of Homeland Security under subparagraph (B)(ii) as a high unemployment area.


There are only four specifically ‘new’ legally defined terms created by the 2022 legislation included in the definitions section. These being job-creating entity, affiliated job-creating entity, certifier, and infrastructure project which are all newly defined. Additional terms have been created within the EB-5 lexicon in other parts of the legislation:  promoter, certification, regional center oversight, and "parties associated with a regional center", just to name a few.

A Promoter is any agent, finder, immigration agent, or broker-dealer involved in the offering of EB-5 investments to the alien investor (←another legally defined term).

A Certification is a written statement (should be under penalty of perjury) “that, to the best of the certifier's knowledge, after a due diligence investigation, the regional center is in compliance with, and has policies and procedures, including those related to internal and external due diligence, reasonably designed to confirm, as applicable, that all parties associated with the regional center are and will remain in compliance with the securities laws of the United States and of any State” as applicable.  

Oversight as it relates to the Regional Center is defined by its requirements which include:

8 USC §1153 (INA § 203) (b)(5) Employment Creation

(I) Compliance with securities laws

(iii) Oversight required-

Each regional center shall-

(I) use commercially reasonable efforts to monitor and supervise compliance with the securities laws in relations to all offers, purchases, and sales of, and investment advice relating to, securities made by parties associated with the regional center;

(II) maintain records, data, and information relating to all such offers, purchases, sales, and investment advice during the 5-year period beginning on the date of their creation; and

(III) make the records, data, and information described in subclause (II) available to the Secretary or to the Securities and Exchange Commission upon request.


(v) Defined term

In this subparagraph, the term "parties associated with a regional center" means-

(I) the regional center;

(II) any new commercial enterprise or affiliated job-creating entity or issuer of securities associated with the regional center;

(III) the regional center's and new commercial enterprise's owners, officers, directors, managers, partners, agents, employees, promoters and attorneys, or similar position, as determined by the Secretary; and

(IV) any person under the control of the regional center, new commercial enterprise, or issuer of securities associated with the regional center who is responsible for the marketing, offering, or sale of any security offered in connection with the capital investment project.


With the codification of so much of what had come into being throughout the history of the EB-5 program, I remind folks that the good guys were already doing it. To the uninitiated, some of the oversight and reporting requirements might seem onerous but these components of doing business are mostly common practices outside of EB-5. The inclusion in the EB-5 legislation is mere in furtherance of ensuring that the EB-5 community is made aware and put on notice that they do not live in a void apart from the real world. It might feel that way but it is not true. USCIS also must realize its true role in the overall process.  One of the functions spelled out in subparagraph (J) pertaining to the Integrity Fund is that it has to spend resources for compliance as well specifically, “as the Secretary determines to be necessary, including monitoring compliance with the requirements under section 1153a of this title.” As a reminder, 8 USC § 1153a is entitled “Transparency” and pretty much forbids ex parte communication and any favoritism in adjudicating anything related to EB-5.  It directs that all oral communication that is required to be included in the record of proceeding (ROP) be either recorded or transcribed while written communication be interfiled with exceptions for law enforcement sensitive, classified, or national security related materials. I don’t envision USCIS to start bugging their employees’ offices or tapping their phones but I would imagine examining files in search of written proof of compliance with Congress’ transparency mandate. The whole idea of memorializing communication and the prohibition on ex parte communications is nothing new either. It has been around for a very long time and one example is its inclusion in the Administrative Procedures Act (APA) which itself has been on the books since June 11, 1946.


The newest legislation has revealed, is revealing, or soon will reveal everyone’s place on the EB-5 learning curve. It is a given fact that everyone simply cannot be in the same place in terms of familiarity and comfort with the rules and standards to be observed going forward with EB-5 and especially the Regional Center Program. And let’s be honest with ourselves, without the Regional Center Program, EB-5 is not worth retaining in the Immigration and Nationality Act. Please don’t shoot the messenger but somebody had to say it. Whether anyone will admit it or not the standalone EB-5 visa was a bust from the beginning which is why a scant year or so after it was created, the tweaking began, and the Regional Center Pilot Program was added to the mix. The vast majority of all EB-5 investing has been through the Regional Center Program and remains so at present with no signs that it will ever change. If being an entrepreneur were easy, then half of new businesses would not fail in the first year and we would all be millionaires.

That’s My Two -Cents, For Now!


[1]DOS = Department of State; INS = Immigration and Naturalization Service; INA = Immigration and Nationality Act.

About The Author

Joseph P. Whalen is an independent EB-5 consultant, advocate, trainer and advisor.

The opinions expressed in this article do not necessarily reflect the opinion of ILW.COM.