MUMBAI: Behring Regional Center, one of the many regional centers that pool funds from EB-5 investors and sponsor business entities has successfully challenged the modernisation rule, which had significantly increased the investment limits.
However, the impact of this court order could be short-term and may not benefit many.
With effect from November 21, 2019, the investment requirements under the EB-5 program (commonly known as cash-for green card) were hiked to $ 1.8 million (as opposed to $ 1 million earlier).
For Targeted Employment Area (TEA) investments – in rural areas or areas of high unemployment, the investment required was $ 900,000 (as opposed to $ 500,000 earlier).
In short, the fall out of the US district court’s decision is that the investment limits revert to the earlier ones.
So, a TEA investment would require $ 500,000 (or Rs.
3.70 odd crore) and not $ 900,000 (or Rs.
6.67 crore).
In recent years, the EB-5 program has gained popularity among rich Indians, including H-1B workers who are in decade long queues for a green card.
Under it, if the necessary investments are made and at least ten permanent local jobs are created it offers a comparatively quicker path to permanent residence.
Via this route, for Indians it takes between seven to ten years to get an unconditional green card.
In the context of the court order, several immigration experts warn that the outcome is likely to be short-lived.
As reported by TOI earlier, unless the US government issues a short-term temporary extension of the ‘Regional Center Program’ which expires June end, while it considers a new reauthorisation legislation, new investments via the regional center route will not be possible.
It should be noted that the EB-5 program, offers two routes of invstments, one is the direct or stand-alone route, where the investor sets up his own business.
The other is investments via regional centers – the latter program has a sunset clause of June 30.
Read AlsoCash for green card: Will the popular EB-5 Regional Center programme survive?The EB-5 programme, popularly dubbed as the ‘Cash for green card’ programme, has been gaining traction in India and among Indians based overseas (mainly H-1B workers facing decades-long backlog for an employment-based green card).
Wealthy Indians use it as a quicker route to the US, especially ifMitch Wexler, partner at Fragomen, a global law firm, points out that the judge kept the injunction door open and we need to see how it plays out.
According to several immigration experts, all eyes are now glued on the steps that the Biden administration will take.
“That said, there could be a limited open window, enabling investors to benefit from the ruling,” adds Wexler.
However, he cautions that this is possible only if investors have all their documentation ready and actually fund before any development happens.
The crux of the challenge in this lawsuit was that the US Department of Homeland Security (DHS) violated the Administrative Procedure Act, when it introduced this rule – hiking the investment limits.
A former ‘acting official was not properly serving in his position when he promulgated the final rule in July 2019.
Interestingly, following the court hearing, the current DHS Secretary, Alejandro Mayorkas ratified the final rule.
However, Judge Jacqueline Scott Corley held this would have no bearing and declared the final rule to be void.