Are rural or high-unemployment projects best for EB-5 investors?
Sam Silverman:
Stepping back and evaluating only the reserved categories for new investors considering making EB-5 investments today: there are very few infrastructure projects, so it’s usually a decision between a high-unemployment project and a rural project.
For those investors deliberating between those two categories, how significant of a difference is there in the likelihood of getting a Green Card faster with a rural project versus a high unemployment project, particularly for China? And for Indian investors, how is that going to play out over time? [All the reserved visa categories] are current now, but they won’t remain current forever.
Charles Oppenheim:
If we were to assume that all the petitions in each of these categories were being processed at the same pace, it would be the most beneficial to have filed in the rural area because it will get 20% of the reserved visa numbers.
Again, assuming all the petitions filed will be processed at the same pace, I think it is very likely that a final action date will be imposed in the infrastructure reserved area because it’s only getting 2% of the limit. The number of visas that are going to be available under that limit is going to be much lower, and per-country limits apply to each of these reserved categories. So, of the 280 visa numbers that are available initially for the infrastructure category this year, any individual country is only entitled to 7% of those 280 visas. That would be the per-country limit.
Again, the takeaway is that the rural category with the 20% is the most favorable to apply through at this time.
Sam Silverman:
As a follow-up to that, how does the priority processing aspect of investors’ petitions in rural projects—the faster approval for a Green Card—fit in with the ability for visas in the rural category to carry over? How is that going to help investors collect their Green Cards faster, with the carry-over now taking place under these new rules?
Charles Oppenheim:
Again, because it’s going to have a larger chunk of the numbers this year, the rural area would potentially have 6,795 visa numbers. So, many more [rural petitions] can be processed. But it will be important to know how fast these cases are actually getting approved, not only the number of filings. Is there a discrepancy in the approval rate—or in terms of the time to get a case approved—in each of these three areas? That is the great unknown at this point.
Sam Silverman:
If we look at it on a per-investor basis, let’s assume there are 6,795 visas available in 2023 for the rural category, and there are about three individuals [applying for an EB-5 visa] per each investment of $800,000. That means about 2,200 investments, each of $800,000, would have to be made before the rural visas are exhausted, right? Said differently, the first 2,200 people who invest $800,000 in rural projects will not face any type of backlog.
Charles Oppenheim:
Correct. That is a very important point you bring up. Each applicant in a case counts against the annual limit. That is something to remember. But again, I think anyone who has filed a petition in any of these three categories up to this point should be very safe once a final action date is applied. If and when reliable information is published, it will be easier to make estimates of what type of final action date may eventually be required.
Could the reserved EB-5 visa categories eventually become backlogged?
Mike Schoenfeld:
I get this question a lot: If you’re born in India or China—and you submit a normal high unemployment [I-526 petition], part of the 10% category—nine months from now, if the category shows up as “C” and if you’re in the US, you can adjust status, and everything’s fine. But likely, by the time you actually get approved, you’ll be behind everybody else.
So even though it could show up as “C”, there is a chance that there have been enough applications already to make that category eventually go into backlog. I think there’s a lot of confusion regarding the assumption that, if it shows up as “C,” it means there’s no backlog—when in reality, that means that if you’re approved today, it’s current, not necessarily in the future when you’re approved.
Charles Oppenheim:
Correct. The “C” merely means that the demand, the current demand for number use, does not exceed the number of visas available. So, as you say, there could be enough cases in the pipeline to require the final action date at some point, but I do not believe that will happen until the second half of 2024, probably not until the summer of 2024.
The key fact is: the earlier you file a petition to accord you status in one of these categories, it makes sure that you are at the very front of the line. So, when your petition is eventually approved, you will be at the front of the line and have the best opportunity to receive a visa in a very timely manner.
