The year 2023 made a significant impact on the EB-5 program, with legislative changes, challenges, and a resurgence of interest from Chinese investors. As we step into 2024, it is crucial to examine emerging trends and anticipate how these will impact future participants in the program.
1. Investment Destinations: Beyond U.S. Borders
While the U.S. has traditionally been the preferred choice for investors, the landscape is evolving. Greece, with its Golden Visa program receiving a substantial increase in applications, has become a notable player. Other countries like Hungary, Indonesia, and Malta, along with Caribbean nations such as St. Kitts and Grenada, are also gaining traction.
Prediction: Outbound investment from the U.S. is on the rise. To stay competitive, the U.S. needs to closely monitor programs in countries like Greece, which attract immigrant investors with low costs, high standards of living, and relative simplicity.
2. EB-5 Adjudication Times and the Rural Phenomenon
The surge in rural projects, facilitated by provisions in the Reform and Integrity Act (RIA), has continued to grow. Investors are drawn to the potential for faster application processing and lower investment minimums. With USCIS delays in pre-RIA petitions spanning 3-4 years, 2024 is likely to witness continued demand for rural projects, particularly from backlogged countries like China and India.
3. The End of Redeployment, But Not For Pre-RIA Cases
USCIS provided guidance on sustainment and redeployment in October 2023, eliminating the redeployment requirement for post-RIA investors. However, uncertainties remain for pre-RIA cases. While the removal of redeployment for pre-RIA investors would be welcomed, USCIS is unlikely to reverse longstanding policies. Further guidance on these issues is expected in 2024.
Prediction: USCIS will maintain its position on redeployment for post-RIA investors, but additional guidance for pre-RIA cases may be provided in 2024.
4. New Regional Centers Springing Up
Post-RIA, numerous regional centers have emerged, offering opportunities for EB-5 project development. As of April 4, 2023, the number of approved regional centers reached 640. The industry anticipates continued growth in this space, with existing regional centers creating their own to meet RIA obligations.
Prediction: The regional center space will remain robust. Existing regional centers will establish their own, and the total number of regional centers is expected to surpass previous levels.
5. Fees
Controversy surrounds USCIS's proposed fee increases, including a 204% jump for I-526/I-526E forms. Despite concerns and USCIS's submission of a final fee schedule to the White House, fee hikes are likely to be implemented. The industry should prepare for these changes.
6. China/Wailian
Despite concerns over the arrest of Wailian Group's president, Linda He, China's EB-5 market is predicted to expand in 2024. The recent carveout in Florida legislation gives hope that state legislatures and Congress will address bills potentially impacting EB-5 from China.
7. Integrity Fund
Regional centers continue to face challenges contributing to the EB-5 Integrity Fund. USCIS's prescribed fees are expected to remain, causing financial strain on regional centers.
Prediction: USCIS's Integrity Fee directives are unlikely to change. Regional centers will need to adapt to these financial challenges.
8. REFs, NOIDs, and Denials
A surge in RFEs, NOIDs, and denials in 2023 raised concerns. Improved hiring and training at USCIS may lead to fewer delays, RFEs, and denials in 2024.
Prediction: USCIS's recent hiring and potential expansion of trained adjudicators may lead to a more efficient EB-5 process with fewer delays and denials.
9. Delays and Backlogs
Differences in pre-RIA and post-RIA application handling, coupled with backlogs from China and India, contributed to delays in 2023. While short-term improvements may occur with staff augmentation, delays are expected to persist in 2024.
10. Eagle Act
The revived Eagle Act faces challenges in Congress, and the EB-5 industry's successful lobbying efforts suggest it will likely fail again. The industry's resilience in legislative advocacy positions it well against potential threats.
11. Chevron
The Supreme Court's reconsideration of the Chevron deference may impact USCIS's rulemaking. If Chevron is overturned, USCIS decisions could face increased legal challenges.
Prediction: Chevron is likely to be overturned by the Supreme Court, potentially leading to more legal challenges against USCIS decisions.
In conclusion, 2024 presents a dynamic landscape for the EB-5 program, requiring stakeholders to adapt to evolving trends and regulatory changes. As the industry navigates uncertainties, staying informed and proactive will be key to success.
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