The Benefits of High-Unemployment Urban TEA Projects

How Investors From Countries Facing an EB-5 Visa Backlog Can Immigrate Without Delays

An EB-5 investor’s journey toward a U.S. visa can be fraught with unexpected delays. Despite being widely regarded as one of the safest visa options, the EB-5 program is also known for its long wait times; unreliable visa availability for investors born in countries with a backlog of EB-5 applicants, including China, has long undermined this otherwise convenient immigration option.

A much-needed provision that makes visa availability more reliable was introduced in the EB-5 Reform and Integrity Act of 2022. Under the new bill, the Department of State (DOS) now reserves a substantial number of EB-5 visas for investors in targeted employment areas (TEAs)—locations that have a substantial need for economic development through EB-5 investment funding. There are three types of TEAs: rural locations, public infrastructure projects, and areas with high unemployment rates.

For many reasons, EB-5 projects in high-unemployment Urban TEAs offer the best way for investors from backlogged countries to secure a reserved EB-5 visa. We now provide an overview of how reserved visas are issued in the EB-5 program and outline the benefits of investing in a high-unemployment Urban TEA project.

Limited Visa Availability for EB-5 Investors

An EB-5 investor and their dependent family members, if any, are eligible for two-year U.S. visas upon approval of Form I-526, Immigrant Petition by Alien Entrepreneur. (The visa’s temporary status is later removed through Form I-829.) Investors then receive their visas through an application to the National Visa Center and immigrate to the United States. However, due to the limited supply of EB-5 visas, investors from countries with a high demand for EB-5 immigration may not receive a visa once their I-526 petitions are approved.

In China’s case, the backlog of EB-5 visa applicants is so substantial that investors of this nationality may have to wait 10 to 15 years before immigrating to the United States. These processing times are unjustifiably long, especially in comparison to those of other applicants; in some cases, investors from low-demand countries receive EB-5 visas in as little as 24 months after submitting Form I-526.

Potential investors from countries with a visa backlog may, understandably, hesitate to participate in the EB-5 program due to these unconscionable delays. And EB-5 applicants who plan to immigrate with their dependent children are further hindered by the limited visa availability: an investor’s children will be considered dependent, and thus eligible for an EB-5 visa, only if they are under the age of 21. If an investor’s wait time is too long, their children could become disqualified for reaching the age limit.

Why Are EB-5 Visa Wait Times So Long for Investors From High-Demand Countries?

The DOS determines how many visas will be made available to the EB-5 investment program each year, and this number is typically sufficient to accommodate investors from most countries. At the same time, the DOS dictates that each participating country in the EB-5 program can receive no more than 7% of the total number of EB-5 visas allocated for the current year, effectively reducing the actual number of available visas. This striction constitutes a major obstacle for the few countries with a high volume of EB-5 applicants.

If an investor’s nationality has already exhausted its supply of EB-5 visas for that year, the investor will have to wait until unused visas from other nationalities become available at the end of the year. Because of the considerable backlog of EB-5 applicants, this can be a prolonged wait.

Cutoff Dates Exacerbate Visa Issuance Delays

In addition to the constraints on visa availability for their country, EB-5 applicants may be subject to further delays in the form of two cutoff dates —a final action date and a date for filing. These two dates restrict when investors can send their applications to the National Visa Center and when they can receive their EB-5 visas. The date an investor submits Form I-526, known in the EB-5 program as an I-526 priority date, determines whether they can advance in the visa process.

For instance, as of May 2022, Chinese investors are assigned a final action date of November 22, 2015. This means that investors who filed their I-526 petitions after November 22, 2015, are not yet eligible to receive a visa.

China is currently the only country subject to cutoff dates, but other high-demand nationalities may follow in the near future.

The DOS publishes the cutoff dates in its monthly Visa Bulletins, but the agency often takes many months or even years to move the dates forward and allow more investors to receive their visas.

The Reserved EB-5 Visa Categories

Under the EB-5 Reform and Integrity Act, the DOS now reserves 32% of the total number of EB-5 visas for investors in the three TEA categories: infrastructure projects, rural, and high unemployment. Investors of any nationality who submit Form I-526 as of March 15, 2022, can be eligible for a reserved visa.

Benefits of a Reserved EB-5 Visa

The aforementioned limit on each country’s yearly EB-5 visa issuances does not apply to investors who receive a reserved visa. Therefore, Chinese and other EB-5 applicants from high-demand countries who invest in a TEA project will be able to “skip the line,” as it were, ahead of other investors of their nationality; they will be eligible for a visa as soon as their I-526 petitions are approved. Investors in line for a reserved visa are also exempt from cutoff dates.

In essence, this provision allows applicants from backlogged countries to complete the EB-5 process without any delays related to visa availability, much like investors from low-demand nationalities. Reserved visa holders will be able to immigrate to the United States many years earlier than their non-reserved counterparts.

The reserved visa categories are invaluable for investors of any nationality subject to cutoff dates, but this new arrangement is of little use for investors from other countries.

Concurrent Filing of the I-526 and I-485 Petitions

EB-5 investors who already live in the United States under a non-immigrant visa can benefit from another new provision: the ability to submit Form I-526 simultaneously with Form I-485, which is used to adjust an EB-5 investor’s immigration status. Nationalities subject to cutoff dates are ordinarily barred from filing the petitions concurrently, but investors who qualify for a reserved visa can circumvent this restriction.

Investors who file the forms concurrently will be able to adjust their immigration status immediately and become eligible for many of the benefits of an EB-5 visa, even before obtaining one. They will be able to live, work, and study in the United States as they wait for their I-526 petitions to be adjudicated.

How Investors Can Obtain Reserved Visas

The DOS reserves 20% of the EB-5 visa supply for investors in rural TEAs, 10% for investors in high-unemployment Urban TEAs, and 2% for infrastructure projects. The key for EB-5 applicants is to invest in a TEA project and file the I-526 petition before the supply of reserved visas is exhausted; the earliest applicants to file Form I-526 will have a better chance of obtaining a visa from these new categories.

There are a total of 19,880 EB-5 visas available for the 2022 fiscal year. Therefore, we estimate that the rural, high-unemployment, and infrastructure categories will be allocated the following numbers of visas: 3,976, 1,988, and 398, respectively. However, the actual number of available visas also depends on how many dependent family members are included in each I-526 petition.

Factoring in an average of three family members per EB-5 investor—and a resulting total of three visas per I-526 petition—we predict that the first 1,325 investors in rural TEAs will be eligible for reserved visas. About 663 investors in high-unemployment Urban TEAs and 133 investors in public infrastructure projects will be eligible.

This leaves investors free to decide between the three TEA categories.

Rural TEA projects have by far the largest share of reserved visas, and investors in these projects have the added benefit of faster processing for the I-526 petition. The category’s ample supply notwithstanding, rural TEA projects have historically been rare in the EB5 investment industry. Projects in these underpopulated areas are often smaller in scope than other EB-5 businesses and may find it more difficult to succeed financially and create the required employment. Further, rural TEA projects often operate in the hospitality sector and rely heavily on tourism. This source of revenue can be volatile, as demonstrated by the COVID-19 pandemic.

Infrastructure projects are an entirely new TEA classification that was introduced in the EB-5 Reform and Integrity Act; there is still much room for clarification from the DOS as to what kinds of projects could be subsumed under this category. As mentioned above, only about 133 investors in infrastructure projects will be eligible for reserved visas, making this the smallest supply of the three categories.

While rural and infrastructure projects are relatively high-risk options for investors, the high-unemployment Urban TEA category offers a more secure path to a reserved EB-5 visa.

Benefits of High-Unemployment Urban TEA Projects

High-unemployment Urban TEA projects have long been a popular investment option in the EB-5 industry. Developers in these areas are often eager to promote economic growth, and a plethora of high-unemployment Urban TEA projects have already succeeded financially and created the required jobs.

While this category has fewer visas at its disposal than the rural classification, a considerable 663 investors will still be able to gain reserved visas from high-unemployment Urban TEA projects—and at a much lower risk. The first 663 applicants to invest in high-unemployment Urban TEAs as of March 15, 2022, will have a visa waiting for them once their I-526 petitions are approved. And even though high-unemployment Urban TEA investors do not receive priority processing for Form I-526, the processing time for this petition has no impact on visa availability.

An Unprecedented EB-5 Investment Path for Investors From Backlogged Countries

After undergoing several years of excessive waiting periods and mandatory delays, investors from countries with a visa backlog finally have an opportunity to complete the EB-5 process unhindered by their nation’s high demand. Like investors of low-demand nationalities, applicants who obtain a reserved visa through a high-unemployment Urban TEA project could immigrate to the United States with their families in as little as two years.

Investors who would like to learn more about the EB-5 investment process, the reserved visa categories, or concurrent filing can schedule a free meeting with EB5AN. We offer projects in both the rural and high-unemployment Urban TEA categories, and our USCIS project approval rate is 100%.