EB-5’s Two-Year Investment Sustainment Rule Faces Legal Challenge — What Comes Next?
Since October 2023, USCIS has required EB-5 investments to remain “at risk” for at least two years, starting from the date the funds are...
In October 2023, the US Citizenship and Immigration Services (USCIS) introduced a policy that fundamentally altered EB-5 investment timelines. The new rule requires EB-5 funds to remain “at risk” for at least two years — but only after the required jobs have been created. The clock starts from the date the capital is actually deployed into the new commercial enterprise, not from when the investor receives conditional permanent residence.
While intended to modernise the programme, the policy quickly became one of the most controversial EB-5 changes in recent years, sparking debate over both its legal basis and its impact on investor strategy.
I. Two Possible Paths Forward
1. Formal Rulemaking by USCIS
USCIS has stated it intends to codify the sustainment period through the Notice of Proposed Rulemaking (NPRM) process. This would:
Publish a draft regulation — currently targeted for November 2025.
Open a 60-day public comment period.
Review and integrate feedback.
Publish a final rule with binding legal authority.
If completed, this process would replace the October 2023 policy with a formally enacted regulation, giving investors and the industry clear, enforceable guidance.
2. Court Intervention
If USCIS fails to act promptly, the federal court hearing the case may intervene. Potential judicial actions include:
Striking down the October 2023 policy as invalid.
Ordering USCIS to restart the process in compliance with the Administrative Procedure Act (APA).
Temporarily restoring the previous five-year sustainment period until a valid rule is in place.
So far, the court has given USCIS time to address the issue — but signalled it will step in if delays continue.
II. The IIUSA Lawsuit — Industry vs. Agency
The legal dispute between Invest in the USA (IIUSA) and USCIS has unfolded over several key milestones:
October 2023 — USCIS releases the two-year sustainment policy, detaching the timeline from the conditional green card period.
March 2024 — IIUSA files suit, alleging USCIS bypassed APA requirements by issuing the policy without public comment or adequate explanation.
January 2025 — The court holds an initial hearing, questioning the rule’s legal validity and ordering the parties to submit a Joint Status Report (JSR) by February.
Feb–Mar 2025 — Negotiations stall. IIUSA pushes for differential treatment for pre- and post-policy investors; USCIS seeks more time, promising NPRM publication in November.
July 2025 — The court sets a July 18 deadline for USCIS to report on rulemaking progress, hinting at possible judicial action if deadlines slip.
III. Why the Sustainment Period Matters
Under US immigration law, EB-5 investors must:
Invest at least $800,000 in a Targeted Employment Area (TEA) or $1,050,000 in a non-TEA project.
Create a minimum of 10 full-time jobs for US workers.
Keep the capital at risk until job creation is complete.
The controversy lies in when investors can lawfully withdraw their funds. Historically, the sustainment period aligned with the two years of conditional residence; now, it is tied to when funds are first deployed — a significant shift for capital planning.
Given that I-829 (permanent green card) adjudications can take far longer than two years, clarity on this timeline is essential for investor risk assessment, liquidity planning, and project structuring.
IV. The Bigger Picture
The sustainment rule debate reflects a broader tension between regulatory certainty and policy flexibility in US immigration. For investors, the outcome will determine not just withdrawal timelines, but also:
Project selection criteria.
Risk exposure period.
Market confidence in EB-5 as a viable pathway.
Whether the final resolution comes through formal rulemaking or court-mandated correction, the industry’s goal is the same: a transparent, predictable framework that balances investor interests with the integrity of the EB-5 programme.
Conclusion
As global capital mobility increases, the EB-5 programme remains a strategic tool for attracting high-net-worth investors to the US. But without clear, lawful rules on the sustainment period, both investor trust and project stability suffer. The coming months — leading to the November 2025 NPRM target — will be decisive in determining whether the EB-5 industry gains the certainty it needs, or remains in a cycle of policy uncertainty and legal challenge.
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