As a result of a recent audit by the Department of Homeland Security, the US Immigrant Investor Program, also known as EB-5, is likely to have a stricter approval process for regional centers and projects, immigration lawyers say.

EB-5 program was created in 1990 to stimulate the US economy through job creation and capital investment by foreign investors. With a minimum investment of $1 million (or $500,000 in low employment or rural areas) in an eligible project, an EB-5 investor can become a permanent US resident, provided the project and the required 10 jobs it creates are self-sustaining and survive. Currently 80 percent of investors who have taken advantage of the EB-5 program are Chinese, according to EB-5 lawyers.

"The entire EB-5 program is in a state of maturing," said attorney Larry Behar, commenting on the audit report published by the Department of Homeland Security's Office of the Inspector General (OIG) last month. "This means that with time the policies and procedures are becoming more refined and more precise with regard to the applications for classification of EB-5."

The OIG report concludes that the US Citizenship and Immigration Services (USCIS) cannot administer and manage the EB-5 regional center program effectively, pointing out that its officials interpret and apply certain rules and policies differently, which casts doubt on its ability to prevent fraud or spot threats to national security.

The OIG report largely focuses on regional centers, through which about 90 percent of the EB-5 projects are applied. An EB-5 regional center is an economic entity eligible to receive immigrant investor capital to help regional economic development in a defined area. In recent years the number of such centers has mushroomed to about 400.

The report made four main recommendations to help USCIS improve EB-5 project approval procedures and standards.

"Our recommendations focused on strengthening regulations for oversight authority and consistent program application; better coordination with other Federal entities; comprehensive reviews of the program; and quality assurance procedures for program integrity," the report said.

However, these recommendations will not necessarily be translated into action, according to Feng Hui, an immigration attorney.

"The report is just an audit of the EB-5 program. The recommendations are not commands," said Feng. "While OIG has oversight powers, the USCIS can choose at its own will whether or not to make any corresponding changes."

The OIG report does say that the USCIS agreed with three of the four recommendations and said it would implement suggestions within the next six to nine months.

"Although in theory the USCIS has agreed to some of the recommendations, certain suggestions, such as the increase of authority and change of regulations, will take a long time to implement," said Justin Wang, an EB-5 lawyer at Baughman & Wang. "I don't see any significant changes in the short or even middle term."

As the approval process for EB-5 regional centers and their projects already takes longer than it has in the past, concerns have been raised as to whether or not new changes would slow down the process even more.

"I don't believe that it will slow it down," said Behar. "It will make it more precise and predictable. In the near future perhaps there would be an adjustment period, but it will be relatively short."

"It's hard to say whether the coming change will slow down the process," said Feng, who believes that there are two main reasons why the process is taking longer these days: the number of EB-5 regional center and project applications is surging and when the USCIS is unsure about a given application, they put it on hold.

"They probably delay as long as possible to wait for the applicant to drop the application, or they just reject it when it's been pending for too long, like two or three years," Feng said.

The bottom line is that before the USCIS announces any official changes, things will most likely proceed as usual.

"We know it's likely the USCIS will toughen the process, but we don't know the details yet," said Feng. "Until a new set of rules is announced, the approval process for current applications should not be affected."

"The best bet is to apply early just in case," he added.

Zhang Yang contributed to this story and can be reached at [email protected].