June 22, 2021 Ruling

Judge Jacqueline Scott Corley of the U.S. District Court of the Northern District of California (the “Court”) issued an order granting summary judgment in Plaintiff’s favor in the matter of Behring Regional Center LLC V. Chad Wolf, et al.

EB-5 Final Rule on $500K to $900K increase was Invalidated by Federal Court Without Injunction Preventing Rule Reinstatement by Secretary Mayorkas

Although the Court did invalidate the Final EB-5 Rule, it is highly likely that Secretary Mayorkas will take action to reinstate the Final EB-5 Rule. 

The Court declined to grant Plaintiff an injunction barring Secretary Mayorkas from reinstating the Final EB-5 Rule absent compliance with the APA’s rule-making process.

See Official Court Ruling

See our original post about the lawsuit challenging EB-5 Modernization Rules.

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Here’s what it means in simpler words:

While technically the minimum investment amount for EB-5 is now $500,000, no one really knows whether a $500k filing will result in an approval or not. And because one may not find out until the application is picked up for adjudication 2-3 years down the road, anyone applying at $500k is really rolling the dice and taking significant risk from both an immigration and investment perspective.

Some approaches that may provide certain levels of protection for an investor that is keen on filing before June 30th now that the program is almost certain to lapse as the EB-5 reauthorization bill has failed to pass in the US Senate are as follows:

  1. The safest and the most conservative way to proceed is to file with $900,000 and continue with it. No attorney or regional center will state otherwise.
  2. A second safe and conservative option is to file with $900,000 and if the investment amount sticks at $500k, withdraw and refile a new application with $500,000. There should be an understanding in place with the regional center that the funds would be held in escrow and refunded if this happens.
  3. Another option would be to file with $900,000, in case the investment amount sticks to $500k, you simply file a supplement to the offering stating the project is accepting investors at the $500K investment level and the regional center refunds the $400,000.
  4. A last option is to file with $500K and execute a letter stating that the balance of the funds will be remitted in 90 days. In case the investment amount sticks to $500k, you simply file a supplement to the offering stating the project is accepting investors at the $500K investment level and no more investment is required to be made.

Each of these potential strategies carry varying levels of immigration and investment risk, along with other risks which are specific to each individual EB-5 investment you may be considering. We do not specifically recommend any of these strategies and strongly encourage investors to consult with licensed, experienced, and reputable U.S. immigration counsel, investment professionals and other parties independent of the regional center you may be considering to discuss the benefits and risks before finalizing your EB-5 investment.

Read these related articles: Making sense of the EB-5 Program After June 30th, 2021 | EB-5 Source of Funds Best Practices and Requirements