Learn about the new reserved visa categories, the latest Visa Bulletin, and how the EB5 visa set-asides will benefit investors.
What Are Reserved Visas?
The EB-5 Immigrant Investor Program operates on a quota system, with a certain number of visas available each fiscal year. Since each country participating in the program is allotted only a limited portion of this annual total, high-demand countries often exceed their supply and accumulate visa application backlogs.
On March 15, 2022, President Biden signed the EB-5 Reform and Integrity Act into law, which updated many EB-5 program requirements and introduced three categories of visa set-asides. This provision will greatly benefit foreign investors from countries that often experience backlogs by effectively allowing them to avoid the waiting line and immigrate to the U.S. much quicker.
What are the Current EB5 Set-Asides Categories?
The U.S. Department of State (DOS) determines how many visas will be made available to the EB5 program every fiscal year. Each country is entitled to about 7% of the annual total. Any unused visas at the end of the fiscal year are reassigned to immigrant investors from high-demand countries.
For the 2022 fiscal year, the DOS has made roughly 19,880 EB5 visas available. Of this total, 32% is set aside. This is further divided into three categories of targeted employment area (TEA) projects; 20% for rural TEAs, 10% for high-unemployment TEAs, and 2% for infrastructure projects. If any reserved visas go unused at the end of the fiscal year, they carry over to the next in the same categories.
EB-5 Program Requirements for TEAs
TEAs are typically census tracts or strings of census tracts that have been recognized by Congress to be in need of economic growth and job creation. The minimum investment into a TEA is $800,000 — much lower than the standard minimum investment of $1,050,000. This serves to encourage investments into TEAs, benefitting foreign nationals well as the U.S. government by stimulating the economy in regions that need it the most. There are two kinds of TEAs; rural and high-unemployment. Certain kinds of public infrastructure projects are also designated as TEAs and qualify for the reduced minimum investment.
To meet EB-5 program requirements, rural TEAs must house fewer than 20,000 inhabitants, not be within a metropolitan statistical area (MSA), and not directly border a municipality with a population over 20,000.
High-unemployment TEAs must have an unemployment rate of at least 150% of the national average. Additionally, these TEAs must be within an MSA or an urban area with 20,000 inhabitants or more.
The infrastructure projects category is new to the EB-5 industry, and immigrant investors still need more clarifications as to what projects could qualify.
What are the Effects of Visa Set-Asides for Specific Countries?
High-demand countries sometimes exceed the available annual supply of EB-5 visas. This leads to visa backlogs and cutoff dates (which are detailed further below) that leave investors waiting many months or even years to receive their visas. As of July 2022, China is the only country that is assigned cutoff dates.
EB-5 applicants who choose TEA or public infrastructure projects and file Form I-526 after March 15, 2022, are eligible for the reserved visas upon the approval of their I-526. This means that applicants in the three reserved categories will obtain their visas and immigrate to the United States faster when their countries experience visa backlogs in the unreserved visa categories.
The reserved visas will benefit investors from countries that are subject to or will likely become subject to visa backlogs and cutoff dates. Most countries that participate in the EB-5 program have a low demand and do not exceed their yearly visa supply.
How Can the Visa Bulletin Help Investors?
When an EB-5 investor submits an I-526 petition to United States Citizenship and Immigration Services (USCIS), the applicant is given a priority date. An investor’s priority date is especially relevant to those from backlogged countries. To regulate visa allocation for these countries, the DOS will assign cutoff dates that determine which investors can proceed with the immigration process.
The two kinds of cutoff dates are final action dates and dates for filing. Final action dates indicate when investors can obtain their EB5 visas, while dates for filing determine when investors can apply to the National Visa Center (NVC) after I-526 petition approval. If an investor’s priority date falls before the cutoff date, they are exempt from the restriction and can continue their EB5 immigration. However, those whose priority dates fall after the cutoff date must wait. Cutoff dates for each country can be found on the Visa Bulletin, which is released monthly by the DOS.
As of the Visa Bulletin for July 2022, China is the only country subject to a final action date and a date for filing. All other countries are marked “C” for “current.” Investors from countries marked as current are not restricted from applying to the NVC or obtaining a visa. China’s final action date is November 22, 2015, and the date for filing is December 22, 2015.
While China is the only country currently subject to cutoff dates, other high-demand countries such as India and Vietnam often accumulate backlogs as well. Foreign investors from these countries are encouraged to keep an eye on future Visa Bulletins.
How the Regional Center Program Could Affect the Set-Aside Visa Supply
Until June 2022, it seemed that regional centers would have to undergo a recertification process to comply with the new regulations set forth in the EB-5 Reform and Integrity Act. The regional center program was by far the most popular investment option in the EB-5 industry for many years. Unfortunately, the regional center program depends on periodic reauthorization, and Congress failed to renew this component of the EB5 industry in June 2021. The lapsed regional center program did not allow investors with pending I-526 petitions to move on in the visa process.
It was not until the EB5 Reform and Integrity Act was enacted on March 15, 2022, that regional center program reauthorization took place. While regional centers EB-5 investors with pending I-526 petitions could now move on in the EB5 process, USCIS was not accepting new applications from regional center investors. The regional center designation application that these entities must file was modified, and several regional center owners were focusing their efforts on recertification.
It was unclear when USCIS would start accepting new regional center program I-526 petitions, but a June 24, 2022 court ruling finally reauthorized this popular investment model. Several EB 5 regional centers managers had filed lawsuits against USCIS in an attempt to gain permission to resume operations immediately. This ruling for the regional center operators’ litigation is positive for all EB-5 stakeholders.
The industry can expect a wave of new investment. Regional centers offer several benefits for investors, including more flexible criteria for calculating job creation. Moreover, the Reform and Integrity Act introduced stringent transparency measures to ensure that regional center program funds are managed carefully and invested in the appropriate project.
The Positive Impact of the EB5 Set-Aside Visas
After several years of lengthy wait times and delays, EB5 applicants from countries with a visa backlog finally have the opportunity to obtain a visa regardless of their nation’s high demand. This is an exciting development for Chinese foreign investors, who have historically been subject to excessive wait times due to a lack of available visas. Additionally, EB-5 set-asides for TEA projects will further encourage the flow of investment capital into regions that need it the most.
Among many other services, EB5AN can help foreign investors determine whether they qualify for EB5 reserved visas. Foreign nationals who would like to learn more about the EB 5 investment process and visa set-asides can schedule a free meeting with EB5AN.