Reserved EB 5 Visas Under the Reform and Integrity Act of 2022

How EB 5 Investors from High-Demand Countries Can Avoid Visa Processing Delays

Most of the demand for EB 5 investment visas comes from a small number of countries, the foremost of which are China, India, and Vietnam. Since each nationality participating in the EB 5 program is entitled only to a limited portion of the available EB 5 visas, foreign investors from these high-demand countries often experience unconscionably long wait times.

The EB 5 Reform and Integrity Act of 2022, which was enacted by President Biden on March 15, 2022, has introduced an innovative solution for foreign investors from high-demand countries: three categories of reserved visas.

This provision, which has been featured in all of the latest EB5 visa news, allows foreign investors to effectively “skip” the waiting line for their visas and immigrate to the United States far more quickly.

In this article, we explain how the reserved EB 5 visa categories work and how foreign investors can benefit from this provision. First, we provide a general overview of how visas are issued in the EB 5 program.

How Foreign Investors Obtain EB 5 Visas

Filing Form I-526

After investing in an eligible U.S. business, EB 5 applicants submit Form I-526, Immigrant Petition by Alien Investor, to United States Citizenship and Immigration Services. Upon doing so, investors are assigned a priority date—that is, the date on which they filed the form.

The I-526 visa petition demonstrates that an eligible investment has been made and provides personal background information on the investor.

If United States Citizenship and Immigration Services approves an investor’s I-526 petition, the applicant is awarded a conditional EB 5 visa that is valid for two years.

Filing Form I-829

Toward the end of the two-year conditional residency period, an investor must submit Form I-829, Petition by Investor to Remove Conditions on Permanent Resident Status. This application proves that the investor complied with program requirements during their two-year residency and that at least 10 jobs were created using the EB 5 capital.

Upon approval of the I-829 petition, United States Citizenship and Immigration Services removes the conditions on the EB 5 investor’s visa. The investor thereby becomes a permanent resident of the United States.

An investor’s dependent family members—their spouse and unmarried children under the age of 21—are also eligible to receive EB 5 visas.

The Direct and Regional Center Program EB 5 Investment Options

In addition, EB 5 applicants can choose between two investment models: the direct option and the regional center program. In the direct capital investment model, an EB 5 investment is made straightaway into a U.S. business without the intermediation of third parties.

The alternative is to invest through a regional center. An entity that receives regional center designation through United States Citizenship and Immigration Services is allowed to manage EB-5 capital across various offerings. After the regional center program expired for several months, it was reauthorized in March 2022 as part of the EB 5 Reform and Integrity Act of 2022.

The EB 5 Regional Center Program is widely seen as the more convenient of the two capital investment models, primarily because investors can use more flexible criteria to calculate their job creation. In addition, EB 5 Regional Center Program investors typically become limited partners in their projects and are thus assigned very light managerial duties.

Visa Allocation in the EB 5 Investment Program

Country Caps on EB 5 Visa Issuances

Every fiscal year, the Department of State (DOS) determines how many visas will be made available to the EB 5 investment program.

Each nationality participating in the program is allotted about 7% of the total number of EB 5 visas—and no more. If, for instance, 10,000 EB 5 visas were made available for a fiscal year, the investors from any one country could be awarded a maximum of 700 visas.

Any more investors of this nationality could not receive their EB 5 visas even if United States Citizenship and Immigration Services approved their I-526 petitions. Investors in this situation may have to wait for years before more EB 5 visas become available for their nationality.

Countries whose number of EB 5 investors exceeds the yearly visa limit are considered oversubscribed. In contrast, applicants from low-demand countries are guaranteed to receive visas upon approval of their I-526 petitions.

The only exception to the cap on the number of EB 5 visas awarded per country occurs when unused visas are available at the end of a fiscal year. In these cases, the DOS allocates the unused visas to pending investors from oversubscribed countries, starting with the applicants with the earliest I-526 priority dates.

Typically, EB 5 investors from high-demand countries have been able to rely on a consistent supply of unused visas each year.

An EB 5 applicant’s investment type—whether direct or through the regional center program—has no bearing on how soon they will be eligible for a visa.

Additional Restrictions for High-Demand Countries

Because China’s backlog is particularly substantial, the DOS has taken the additional measure of assigning two types of cutoff dates for Chinese EB 5 visa applicants: a date for filing and a final action date. These cutoff dates, which result in substantially longer wait times, are published in the monthly Visa Bulletins.

Dates for filing restrict when investors can apply to the National Visa Center upon approval of Form I-526; final action dates determine when investors can receive their visas.

A Chinese investor will be able to advance in the EB 5 visa process only if their I-526 priority date is earlier than the applicable cutoff dates. For example, as of the June 2022 Visa Bulletin, Chinese applicants will be able to receive their visas only if their priority dates are earlier than November 22, 2015.

The DOS moves forward the cutoff dates very gradually; many months or more than a year often transpires before the dates advance.

As a result of these strictions, Chinese investors may have to wait for more than 10 years before receiving their EB 5 visas. And even though Chinese investors in the direct model were recently exempt from cutoff dates, the June 2022 Visa Bulletin announced that all Chinese investors, in both the direct and regional center program options, were once again assigned cutoff dates.

Moreover, India and Vietnam’s demand is likely to become so high that the DOS will impose cutoff dates on these nationalities in the coming months.

The Role of Reserved Visas in the EB 5 Industry

The reserved visa categories introduced by the EB 5 Reform and Integrity Act promise to improve processing times for high-demand nationalities. The DOS will now reserve 32% of the yearly EB 5 visa pool for applicants who invest in projects located in targeted employment areas.

These locations are either rural or experience high unemployment. Certain kinds of public infrastructure projects also receive designation as targeted employment areas. (EB 5 investors in targeted employment area projects enjoy a reduced minimum investment amount of only $800,000 as opposed to the standard threshold of $1,050,000.)

The DOS reserves 20% of the EB 5 visas for rural targeted employment areas, 10% for high-unemployment targeted employment areas, and 2% for public infrastructure projects.

If visas in any of these three reserved categories are left unused at the end of the fiscal year, they will carry over in the same category the following year.

How Many Reserved Visas Are Available in 2022?

The DOS has made approximately 20,000 EB 5 visas available for the 2022 fiscal year. We therefore estimate that there are currently about 6,400 reserved visas—that is, 32% of the total visa pool.

The rural targeted employment area category will receive approximately 4,000 reserved EB 5 visas. The high-unemployment and public infrastructure categories will receive about 2,000 and 400 reserved visas, respectively.

On average, EB 5 investors apply along with two family members, meaning that each investor uses up an average of three visas. The actual availability of the reserved visa categories is thereby reduced.

Factoring in the presence of EB 5 investors’ family members, we calculate that the first 1,340 or so applicants to invest in rural targeted employment areas will be eligible for reserved EB 5 visas. At the same time, approximately 670 high-unemployment targeted employment area investors will be able to receive reserved EB 5 visas, while only about 134 investors in public infrastructure projects will be eligible.

Potential EB 5 investors should keep in mind that the earliest applicants to invest in a targeted employment area project and file Form I-526 will have a greater chance of obtaining a visa from the reserved pools: investors who file their I-526 petitions after the reserved visa categories have been taken up will likely have to wait until the following fiscal year to receive their visas.

Further, only investors with I-526 priority dates of March 15, 2022, or later can obtain an EB 5 visa from the reserved categories.

Benefits of Obtaining a Reserved EB 5 Visa

EB 5 applicants who choose targeted employment area projects and obtain approval for Form I-526 will be assigned visas from the reserved categories. Investors from low-demand countries may experience somewhat faster processing if they obtain reserved visas.

However, the greatest benefit is for investors of high-demand nationalities. All applicants assigned to the reserved categories are guaranteed to obtain an EB 5 visa upon approval of Form I-526—regardless of their country’s EB 5 visa demand and availability.

Even if there are no EB 5 visas available for their nationality that fiscal year, foreign investors in the three reserved categories can obtain their initial visas and immigrate to the United States without delay. This benefit can shorten an EB 5 investor’s wait time by several years.

Moreover, Chinese investors will be exempt from cutoff dates if they obtain an EB 5 visa from the reserved categories.

Reserved Visas and Pending Chinese Applicants

As mentioned above, EB 5 investors from backlogged countries, particularly China, often rely on each year’s leftover visas to immigrate. Now that 32% of the EB 5 investment visa pool will be reserved for targeted employment areas investors, the number of unused visas at the end of each fiscal year may be reduced significantly.

Chinese EB 5 investors who filed Form I-526 before March 15, 2022, should expect an even more prolonged wait.

The limited supply of unused visas may be further reduced by the upcoming influx of regional center program investors. Before the EB 5 Reform and Integrity Act, the previous regional center program had few regulations in place to avoid fraud and ensure that EB 5 funding was managed transparently; now, numerous measures have been introduced to combat dishonesty in regional center program investments.

As a result, the new regional center program will likely regain its popularity among foreign investors.

Concurrent Filing and the Reserved Visa Categories

The EB 5 Reform and Integrity Act also allows investors to file the I-526 petition simultaneously with Form I-485, Application to Register Permanent Residence or Adjust Status. EB 5 applicants who are already living in the United States under a non-resident visa use Form I-485 to adjust their immigration status. (Non-resident visas include the H-1B, F-1, E-2, TN, and L-1 categories.)

Filing the I-526 and I-485 petitions concurrently may enable EB 5 investors already in the United States to immediately change their immigration status to “pending adjustment.” They will thus be allowed to live, work, and study anywhere in the country, essentially enjoying the benefits of an EB 5 visa even before obtaining one. These investors can also avoid consular processing, which is often fraught with delays.

Concurrent filing is a valuable opportunity for foreign nationals whose non-resident visas are nearing expiration. Indian nationals, who hold a large portion of the H-1B employment visas, may be particularly interested in this new provision.

Still, the DOS does not allow investors from nationalities subject to EB 5 cutoff dates to file the I-526 and I-485 forms concurrently.

Therefore, the only way for Chinese EB 5 investors—and applicants from any nationality subject to cutoff dates in the future—to file the petitions concurrently is to invest in a targeted employment areas project and obtain a visa from one of the reserved categories.

Potential EB 5 investors interested in concurrent filing should look into available targeted employment areas projects, especially in the rural category, which holds an ample majority of the reserved visa pool. Again, investors should strive to file their I-526 petitions as soon as possible, before the supply of reserved EB 5 visas is exhausted.

Reserved EB 5 Visas: An Unprecedented Opportunity to Avoid Demand-Related Delays

Chinese, Indian, and Vietnamese investors can now embark on an unprecedentedly direct path toward the EB 5 visa, without the excessive wait times so common in the EB 5 program. Applicants in the reserved visa pools can enjoy increased peace of mind in knowing that they will be eligible for a visa regardless of their nationality’s demand. And the arrangement for concurrent filing gives investors already in the United States the chance to enjoy many of the freedoms associated with an EB 5 visa soon after submitting Form I-526.

The EB 5 industry is currently focusing its efforts on preparing regional center program offerings that comply with the EB 5 Reform and Integrity Act’s new regulations. Previously designated regional centers under the previous regional center program will likely have to make far-reaching adjustments. Still, foreign nationals will soon be able to invest through the EB 5 Regional Center Program and enjoy more lenient job creation requirements as well as several other benefits.

Starting the EB 5 Process With EB5AN

Investors who would like to learn more about the reserved visa categories, concurrent filing, and the regional center program can schedule a free meeting with EB5AN. EB5AN’s vast industry experience has helped more than 1,600 investors begin the EB 5 process.

Among other services, EB5AN helps prospective investors determine whether they qualify for reserved EB 5 visas or concurrent filing. We also offer safe investment opportunities through the regional center program.