CLIENT UPDATE: COURT HUGELY UPHOLDS TWO-YEAR EB-5 INVESTMENT RULE WHILE AWAITING OFFICIAL REGULATIONS

---

A recent court decision in the EB-5 sustainment period lawsuit confirms the two-year investment rule remains in place—for now. The court is waiting for USCIS to issue a formal regulation, and no changes are happening without public input.

Here’s what happened, what it means, and how it may affect EB-5 investors.

1. RECAP: WHAT IS THE SUSTAINMENT PERIOD DISPUTE?

• The EB-5 Reform and Integrity Act (RIA) of 2022 changed how long investments must stay “at risk.” Previously, investments had to stay in place through conditional residency. Now the law says investments must remain for “not less than two years.”
• In October 2023, USCIS updated its policy to say the two-year clock starts when the investment is placed at risk—this applies only to post-RIA investors. Pre-RIA investors must still follow the older rule.
• IIUSA (a regional center trade group) filed a lawsuit in March 2024, claiming USCIS skipped proper rulemaking procedures and asking for a five-year period to replace the current guidance.

2. WHAT DID THE COURT DECIDE ON JULY 29, 2025?

• The court declined to rule on whether USCIS’s two-year guidance is correct or not. The judge called the case premature.
• The court noted that USCIS has said it will publish a formal regulation through the notice-and-comment rulemaking process, expected in November 2025.
• Both IIUSA’s request for a quick ruling and the government’s attempt to dismiss the case were denied.
• The court asked both sides for a joint update in 90 days and then every 60 days after that.

3. WHY THE COURT SAYS IT WILL WAIT

• Courts generally avoid ruling on federal policy unless the agency has finalized a rule. USCIS’s current guidance is not legally binding and could change.
• The court saw no evidence USCIS is delaying on purpose and found no urgency requiring judicial action now.
• That means the two-year guidance remains what must be followed—until a final rule is issued.

4. ADDITIONAL CONTEXT FROM OTHER SOURCES

• A federal court in Washington confirmed this interpretation, deeply supporting the two-year rule for post-RIA investors as stated by USCIS. The judge sided with the government and investor advocates who argued for clarity.
• Industry observers say this ruling eases planning for investors from countries with long backlogs, like China and India, who benefited from a two-year start instead of waiting through visa delays.
• Legal analysts expect the upcoming rulemaking to finalize not just sustainment timelines, but also protections for good-faith investors, as outlined in the RIA.

SUMMARY

The court has confirmed that the two-year sustainment policy remains in effect for post-RIA EB-5 investments. Legal review is on hold until USCIS completes formal rulemaking in November 2025. No immediate changes will occur, and investors should continue following current guidance.

WHAT EB-5 INVESTORS SHOULD DO

• Continue following the two-year investment rule for now—do not rely on a shorter or longer timeline until the new regulation is final.
• Track when your funds were placed at risk and when your visa petition was filed. This helps document your compliance.
• Stay ready for the upcoming rulemaking: review the draft when published and consider submitting comments with your attorney’s help.
• Discuss with your legal team whether your project’s timelines and contracts remain suitable, especially if they assume a longer investment period.
• Keep watching for updates. Once the final rule is published, we’ll help interpret how it applies to your case.