Fifth Employment Based category (EB-5) was created when the Immigration Act of 1990 (“IMMACT 90”) amended the Immigration and Nationality Act (“INA”). However, during the mid-1990s many companies did not raise the full required invested capital or hire the required number of employees. USCIS wanted to stop such misuse of the EB-5 program. Thus, several lawsuits followed reulting in legislative amendments to the EB-5 program. In 1998, four decisions were issued to serve as precedents for the future of the EB-5 program: Matter of Soffici, 22 I & N Dec. 158; Matter of Izumii, 22 I & N Dec. 169; Matter of Hsiung, 22 I & N Dec. 201; Matter of Ho, 22 I & N Dec. 206. Starting in 2003, the EB-5 program was amended to include the creation and operations of Regional Centers.
Initially the government agency wanted to implement these rulings retrospectively to earlier EB-5 participants, but in May 2001, a Federal District Court ruled in Chang v. United States that applying the new standards of adjudication retroactively in connection with approved EB-5 petitions is improper. Furthermore, in 2003, the Ninth Circuit Court of Appeals confirmed the lower court’s opinion issued in Chang v. United States, reaffirming that the retroactive application of the 1998 precedent decision was improper.