DHS/USCIS Proposes Major EB-5 Regulatory Overhaul: What Investors and Developers Must Know Before August 31

On July 2, 2026, the Department of Homeland Security (DHS) and U.S. Citizenship and Immigration Services (USCIS) published a comprehensive proposed rule to implement the EB-5 Reform and Integrity Act of 2022 (RIA). The proposed rule would substantially reorganize the EB-5 immigrant investor program's regulatory framework, strengthen fraud and national security controls, and clarify requirements across the full spectrum of EB-5 participants — investors, regional centers, new commercial enterprises (NCEs), and job-creating entities (JCEs).

Public comments are due August 31, 2026. This is a significant rulemaking that will affect every active EB-5 project and every foreign investor currently in or considering the EB-5 pipeline.

The EB-5 RIA, enacted as part of the Consolidated Appropriations Act of 2022, made sweeping changes to the EB-5 program that had been operating under regulations largely unchanged since the 1990s. Key RIA changes included:

• Regional center reauthorization with new integrity measures and USCIS oversight authority
• Targeted Employment Area (TEA) designation authority transferred from states to USCIS
• Set-aside visa categories for rural, high unemployment, and infrastructure projects
• Increased minimum investment amounts ($800,000 for TEA projects; $1,050,000 for non-TEA)
• New integrity and compliance requirements for regional centers, NCEs, and JCEs
• USCIS authority to terminate regional centers for fraud, misrepresentation, or national security concerns

The July 2, 2026 proposed rule is USCIS's comprehensive regulatory implementation of these statutory changes.

The proposed rule significantly expands USCIS's authority to screen EB-5 participants for fraud and national security risks:

• Enhanced background check requirements for regional center principals, NCE managers, and JCE principals — including checks against OFAC sanctions lists, debarment databases, and law enforcement records
• Mandatory disclosure of beneficial ownership for regional centers, NCEs, and JCEs, including disclosure of foreign government connections
• New grounds for regional center termination including material misrepresentation, failure to maintain required records, and national security concerns
• Investor source-of-funds documentation requirements strengthened, with specific guidance on acceptable documentation for funds originating in high-risk jurisdictions

Regional centers face substantially increased compliance obligations under the proposed rule:

• Annual compliance certifications to USCIS confirming continued eligibility and absence of disqualifying events
• Audited financial statements for regional centers managing projects above specified thresholds
• Investor notification requirements for material changes to projects, including changes in management, capital structure, or project scope
• Escrow and investor protection requirements for new capital raises, including restrictions on the use of investor funds before I-526E petition approval

• Separate compliance programs required for NCEs and JCEs, with designated compliance officers
• Job creation documentation standards clarified, including requirements for economic methodology, data sources, and third-party review
• Material change standards updated to clarify when changes to a project require investor notification or new USCIS filings

• Offering document disclosure requirements expanded to require disclosure of all fees, conflicts of interest, and promoter compensation
• Promoter registration and disclosure requirements strengthened, including mandatory disclosure of promoter agreements and compensation arrangements
• Investor rights clarified, including rights to project information, financial statements, and notification of material changes

Turkish nationals are among the most active EB-5 investors globally, particularly in New York real estate, hotel, and mixed-use development projects. The proposed rule has several specific implications for Turkish investors:

Turkish investors must document the lawful source of their EB-5 investment funds. The proposed rule strengthens documentation requirements for funds originating in jurisdictions with elevated money laundering or sanctions risk. Turkish investors should work with counsel to prepare comprehensive source-of-funds packages that address:

• Business income and tax documentation
• Real estate sale proceeds
• Inheritance and gift documentation
• Currency conversion and transfer records
• Compliance with Turkish capital controls and foreign exchange regulations

The proposed rule's enhanced sanctions screening and beneficial ownership disclosure requirements are particularly relevant for Turkish investors with business interests in sanctioned jurisdictions or with complex ownership structures. Investors should review their beneficial ownership disclosures and ensure that no related parties appear on OFAC or other sanctions lists.

Turkish investors considering EB-5 investments through regional centers should conduct enhanced due diligence on regional center principals, project developers, and NCE/JCE management under the proposed rule's framework. Key due diligence items include:

• Background checks on all principals and key personnel
• Review of regional center compliance history and any USCIS enforcement actions
• Analysis of project financial statements and capital structure
• Review of escrow arrangements and investor protection provisions
• Assessment of job creation methodology and economic projections

All EB-5 offering documents — private placement memoranda, subscription agreements, operating agreements, and investor disclosure documents — should be reviewed against the proposed rule's enhanced disclosure requirements. Key areas for review:

• Promoter compensation and conflict of interest disclosures
• Fee structures and waterfall provisions
• Investor rights and notification obligations
• Material change standards and procedures
• Escrow and investor protection arrangements

Regional centers and NCEs that do not currently have formal compliance programs should begin developing them now, in anticipation of the proposed rule's requirements. A compliant EB-5 compliance program should include:

• Designated compliance officer with defined responsibilities
• Annual compliance certification procedures
• Investor notification protocols for material changes
• Record retention policies and procedures
• Background check and beneficial ownership verification procedures

For EB-5-funded real estate and construction projects, the proposed rule increases the importance of:

• Sanctions due diligence: Screening all project participants, contractors, and investors against OFAC and other sanctions lists
• Debarment checks: Verifying that no project participants are debarred from federal programs
• Revocation risk assessment: Evaluating the risk that the regional center's designation could be terminated during the project lifecycle
• Compliance covenant drafting: Including EB-5 compliance representations and covenants in construction contracts, loan agreements, and equity documents

Stakeholders who wish to comment on the proposed rule must submit written comments to USCIS by August 31, 2026. Comments can address any aspect of the proposed rule, including:

• The adequacy of the proposed fraud and national security controls
• The burden of the proposed compliance requirements on regional centers and NCEs
• The clarity of the proposed source-of-funds documentation standards
• The investor protection provisions and their adequacy
• Implementation timelines and transition provisions

1. Review all active EB-5 offering documents against the proposed rule's enhanced disclosure requirements
2. Audit source-of-funds documentation for all current and prospective Turkish investors
3. Assess regional center compliance programs against the proposed rule's requirements
4. Conduct sanctions and debarment screening for all project participants
5. Consider submitting comments on provisions that would impose undue burden or require clarification
6. Monitor the rulemaking timeline — the final rule will likely be effective 60–90 days after publication

ULF New York advises Turkish investors, real estate developers, regional centers, and EB-5-funded projects on U.S. immigration law, foreign investment compliance, and cross-border transaction structuring. Contact us for a consultation on EB-5 regulatory compliance.