I extend my warmest greetings to you as the Founder and President of American Regional Center For Entrepreneurs (ARCFE), an esteemed USCIS designated EB-5 regional center since 2013. Over the years, ARCFE has diligently managed 15 EB-5 funds, adhering to both pre-RIA and post-RIA regulations with unwavering dedication.
With over a decade of experience in raising and managing EB-5 funds, ARCFE positions itself as a reputable and well-established medium-sized fund entity. Our team takes immense pride in our demonstrated professionalism and wealth of experience, attributes that have enabled us to assist over 700 investors in realizing their American Dream through the EB-5 program.
Our steadfast commitment is to serve you, our valued investors. Your interests remain paramount to ARCFE, and we pledge to continue prioritizing your needs and aspirations as we move forward.
IIUSA’S LAWSUIT
IIUSA is the national membership-based 501(c)(6) not-for-profit industry trade association for the EB-5 Regional Center Program, founded in 2005. On March 29th, 2024, IIUSA undertook legal action against the U.S. Citizenship & Immigration Services (USCIS) in response to the October 2023 policy change, which redefined the duration that investors’ funds are required to remain “at risk” under the EB-5 Reform & Integrity Act of 2022 (EB-5 RIA 2022).
The IIUSA contends that the USCIS’s current interpretation of the EB-5 2-year investment period was enacted without due regard for market dynamics and the interests of EB-5 investors. To safeguard the interests of investors and uphold the integrity of the EB-5 program, IIUSA proposes a fixed minimum investment “at risk” period of 5 years (sustainment period).
Regrettably, the IIUSA Board of Directors made the significant decision to pursue legal action without seeking input from all of their members. As an active member of IIUSA since 2016, ARCFE had not been notified or made aware of the IIUSA’s intention to pursue legal action prior to the decision being publicized.
BACKGROUND
Before October 2023, USCIS defined the sustainment period to be a minimum of two years, commencing after investors obtained their 2-year conditional green cards. This framework posed a significant disadvantage to investors from nations that are prone to being backlogged, such as India or China. These rules forced investors to endure prolonged waiting periods, far exceeding the stipulated 2 years, before achieving eligibility. Moreover, many investors were compelled to undergo a "capital redeployment" procedure to maintain their investment in the "at risk" status, as required by the USCIS.
On October 11th, 2023, the USCIS unveiled its revised interpretation via its official website. This sudden announcement sent shockwaves throughout the industry, as it signified a departure from the previous investment timelines. In response to investors showing preference to projects with shorter investment periods, market dynamics are shifting towards offerings ranging between 2- to 4-year timelines rather than 5- to 7-year timelines. Regional centers that fail to adapt quickly to the new market environment face potential adverse implications to their operations and profits.
THE NEW 2-YEAR REQUIREMENT
The 2-year sustainment period begins upon the full transfer of the EB-5 required investment amount — $800,000 for projects designated as Targeted Employment Areas (TEA), or $1,050,000 for projects outside TEAs — to the Job Creating Entities (JCE). In the event that the investment funds have been retained by the JCE for a duration of 2 years without the filing of the I-526E petition, repayment of the investment is precluded until the submission of the I-526E petition. Additionally, the investment must yield a minimum of 10 jobs before it becomes eligible for repayment. Investors may still qualify for repayment prior to USCIS adjudicating their I-526 petition, provided that all requisite conditions have been fulfilled.
ARCFE’S SWIFT RESPONSE TO POLICY CHANGE
In light of the USCIS's revised interpretation, to enhance the appeal of our offerings and to provide superior value to our valued investors, our management team has made a strategic shift in our product structure. This restructuring aims to mitigate costs and improve operational efficiency, to ensure that our forthcoming EB-5 projects deliver optimal value to investors and their families, alleviating the frustration associated with prolonged capital lock-in periods.
ARCFE STANDS WITH INVESTORS
The IIUSA’s lack of inclusive communication raises deep concerns regarding our representation in this lawsuit by the organization. We are resolute in our dedication to upholding the rights and interests deserving of our investors, many of whom come from middle-class backgrounds and make significant sacrifices to pursue EB-5 investments. We understand the gravity of the decisions our investors undertake, particularly in our current economic climate. Reversing the 2-year October 2023 interpretation threatens to impose unwarranted financial burdens and stress upon our investors and their families.
IIUSA's recent actions contradicts its own Code of Conduct and EB-5 Regional Center Best Practices. This discrepancy underscores the imperative for a more inclusive and representative discourse within the EB-5 community. As well as the necessity for impartial and neutral industry bodies to ensure policy advocacy genuinely reflects and supports the equitable interests of all stakeholders. Furthermore, this lawsuit jeopardizes the vitality and credibility of the EB-5 ecosystem, undermining the newly established trust of global investors in the industry. Shortening the investment period not only benefits investors but also enhances the program's integrity and appeal, aligning with its original objectives of stimulating the U.S. economy through capital investment by foreign investors.
ARCFE reaffirms its steadfast commitment to serving and prioritizing our investors. In alignment with the stance of the American Immigrant Investors Alliance (AIIA) on this lawsuit, we have engaged with AIIA, offering necessary support and donations, while remaining vigilant about the lawsuit's progression. Additionally, we pledge proactive communication with our Group 15 investors affected by this litigation in the near future, ensuring robust measures are taken to safeguard their interests.
Should you have any inquiries or require further clarification, please feel free to contact our team. We are readily available to address any concerns or queries you may have.
LILY GUO
ARCFE Founder and President
CONTACT US
+1 (212) 889-5333