If your country is experiencing an EB-5 visa backlog, you could immigrate to the United States years earlier by investing in a set-aside visa category.
How Visas Are Distributed in the EB-5 Program
Set-Aside EB-5 Visas: An Unprecedented Way to Avoid Visa Processing Delays
How to Obtain a Set-Aside EB-5 Visa
Obtaining Set-Aside Visa Through a Rural TEA Project
Obtaining a Set-Aside Visa Through a High-Unemployment TEA Project
Concurrent Filing and Partial EB-5 Investments
Obtain A Set-Aside EB-5 Visa With EB5AN
Among the many rules and integrity measures introduced by the EB-5 Reform and Integrity Act of 2022, the new arrangement for set-aside visas promises to be especially beneficial to EB-5 investors.
Prior to the Reform and Integrity Act, there was little that EB-5 visa applicants could do to avoid the years-long delays caused by limited visa availability. Since the bulk of EB-5 visa applications comes from only a few countries, many EB-5 investors have had no choice but to wait out long processing delays before finally immigrating to the United States. These prolonged delays have been detrimental to investors interested in obtaining employment authorization in the United States or in immigrating before their dependent children surpass the eligible age limit of 21.
Under the Reform and Integrity Act, obtaining a set-aside visa allows new EB-5 investors to immigrate without delays related to limited visa availability; in effect, a new “waiting line” for EB-5 visas has been opened for investors from high-demand countries.
In this article, we explain why EB-5 visas have a limited availability and how these constraints result in excessive wait times. Then, we explain how obtaining a set-aside EB-5 visa allows investors to avoid these delays and enter a new, delay-free “line” for visas.
How Visas Are Distributed in the EB-5 Program
The total number of U.S. visas allocated each fiscal year to the EB-5 program, one of the employment-based (EB) visa categories, is determined by the Department of State (DOS). The EB-5 visa supply can vary depending on how many visas were left over from the EB-5 and other categories the previous fiscal year. The total number of yearly EB-5 visas is typically sufficient to cover the global demand generated by investors and their dependent family members, each of whom also qualifies for a visa.
Notwithstanding the ample total supply of EB-5 visas, investors from each participating nationality in the EB-5 program can receive a maximum of 7% of the total EB-5 visas for each fiscal year. This striction drastically reduces the actual number of available visas. And, since the bulk of EB-5 visa applications come from a small number of countries, investors of these high-demand nationalities are often subject to long visa wait times, even after they receive approval from United States Citizenship and Immigration Services (USCIS).
When the number of pending EB-5 visa applications from a certain country exceeds the number of visas available for that nationality, the country is considered to be in visa retrogression. Investors from countries in visa retrogression have to wait until the surplus of EB-5 visas from low-demand nationalities becomes available at the end of each fiscal year.
Nationalities experiencing EB-5 visa retrogression are subject to additional wait times in the form of cutoff dates imposed by the DOS. In essence, cutoff dates delay when EB-5 investors can apply for and receive their visas upon approval of Form I-526E, the initial application in the EB-5 immigration process. Investors from countries in retrogression will only be able to move forward in the visa process if the date on which they filed Form I-526E—known as the priority date—is earlier than the applicable cutoff date.
For example, as of the September 2022 Visa Bulletin, the DOS set a cutoff date of December 22, 2015, for Chinese EB-5 investors. This means that Chinese EB-5 applicants who filed Form I-526E on or after this date cannot yet receive their visas.
The DOS often takes many months, or even years, to push the cutoff dates forward and allow more EB-5 investors to receive their visas. The agency may even move the dates back. Understandably, potential EB-5 investors from high-demand countries may hesitate to begin the EB-5 process in light of this uncertainty.
The situation faced by EB-5 investors from countries in visa retrogression may be compared to waiting in a long, slow-moving line. There are not enough visas available at the end of the line to accommodate all the EB-5 investors. And investors have no way of knowing when the DOS will advance their nationality’s cutoff dates and thereby allow the line to move forward.
As of the September 2022 Visa Bulletin, China is the only nationality experiencing EB-5 visa retrogression. This country has the oldest and largest backlog of EB-5 visa applications, and Chinese investors may have to wait as long as 10 years—or more—before receiving their visas.
Other high-demand countries may soon develop visa application backlogs and enter retrogression as well.
Set-Aside EB-5 Visas: An Unprecedented Way to Avoid Visa Processing Delays
The EB-5 Reform and Integrity Act of 2022 sets aside 32% of the yearly EB-5 visa pool for investors in certain types of projects. New EB-5 investors who file their I-526E petitions as of March 15, 2022, and invest in one of the eligible project types will qualify for a set-aside EB-5 visa.
The visa availability constraints that limit investors from countries in visa retrogression do not apply to investors who qualify for a set-aside visa. Therefore, EB-5 investors in the new set-aside visa categories will not be subject to cutoff dates, and they will be able to receive an EB-5 visa once documentarily qualified—even if their nationality is in retrogression and has already exhausted its supply of EB-5 visas.
The new set-aside visa categories may be compared to a new waiting line for EB-5 visa applicants. Once they are documentarily qualified, EB-5 investors in line for set-aside visas will immediately be eligible for a visa, with no additional waiting times caused by the limited visa supply. As the new set-aside visa categories were introduced just recently, no one is in line, so to speak, for set-aside visas. Investors who partake in this new arrangement will have an EB-5 visa waiting for them upon receiving USCIS approval.
Obtaining a set-aside visa can shorten the EB-5 immigration process by many years for investors from countries in visa retrogression.
Still, since most countries have a lower demand for EB-5 immigration and do not exceed their yearly visa supply, set-aside visas will not make the immigration process faster for investors from low-demand countries.
How to Obtain a Set-Aside EB-5 Visa
After investing in a qualifying project, EB-5 investors submit Form I-526E to USCIS. This petition must show that the investor and the project are both compliant with EB-5 program requirements.
Once USCIS approves the I-526E petition, investors living outside the United States file Form DS-260 and go through consular processing to obtain their visas. EB-5 investors who already live in the United States under a non-immigrant visa file Form I-485 to adjust their immigration status and obtain their visas.
This initial visa is conditional and valid for only two years. The conditions on an EB-5 investor’s permanent resident status are later removed through Form I-829.
To obtain a set-aside visa, EB-5 applicants must invest in a project in one of the three set-aside categories: rural targeted employment area (TEA) projects, high-unemployment TEA projects, and public infrastructure projects.
The rural TEA category is allotted 20% of the total number of yearly EB-5 visas, while the high-unemployment and infrastructure categories receive 10% and 2%, respectively.
As approximately 19,880 EB-5 visas are available for the 2022 fiscal year, the three set-aside categories—rural TEA, high-unemployment, and infrastructure—will receive about 3,976, 1,988, and 398 set-aside visas, respectively. Factoring in an average of three dependent family members per EB-5 investor, we estimate that 1,325 investors in rural TEA projects, 663 investors in high-unemployment TEA projects, and 133 investors in infrastructure projects will be eligible for a set-aside visa.
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Since the infrastructure category is a new and relatively unknown project type introduced in the Reform and Integrity Act, most investors interested in a set-aside visa will look to either rural or high-unemployment TEA projects. Each category has its own distinct advantages and risk profile.
Obtaining Set-Aside Visa Through a Rural TEA Project
An EB-5 project’s location qualifies as a rural TEA if it does not have a population greater than 20,000 and does not border a municipality with more than 20,000 people. Rural TEA projects must be located outside metropolitan statistical areas (MSAs).
A major benefit of investing in a rural TEA project is gaining access to the largest supply of set-aside visas; at 20%, the rural TEA set-aside visa supply is significantly larger than both the high-unemployment TEA and infrastructure categories. In addition, rural TEA investors have the exclusive benefit of priority processing of Form I-526E.
Still, as rural areas typically have reduced economic activity, EB-5 investors are advised to evaluate rural EB-5 projects carefully to make sure they are financially viable and likely to be completed successfully. Rural projects in the manufacturing or hospitality industries are particularly vulnerable to economic downturns.
On the other hand, rural EB-5 projects in the residential real estate sector are typically far more stable. These types of projects can adjust the pace of construction according to current demand and obtain revenue from property sales before construction takes place.
Rural TEA Project: Wohali Utah
EB5 Affiliate Network (EB5AN) is pleased to offer a new rural TEA project: Wohali Utah, a 428-residence golf community just outside of Park City, Utah. EB-5 investors in the Wohali Utah project will enjoy a high level of immigration and financial safety; the development follows a low-risk business model in the housing sector and does not rely on EB-5 funding for completion.
In addition to set-aside visas and priority processing of Form I-526E, EB-5 investors in Wohali Utah will have a clearly-defined repayment period and I-526E approval refund and job creation guaranties.
Rural TEA Project: Twin Lakes Georgia
EB5AN is also sponsoring the Twin Lakes Georgia Single-Family Housing Community development. Three hundred fifty of the development’s 1,300 units are already sold, giving EB-5 investors a solid basis for immigration and financial success. Investors will also receive an I-526E approval refund guaranty.
Obtaining a Set-Aside Visa Through a High-Unemployment TEA Project
EB-5 projects in high-unemployment TEAs—that is, areas with an unemployment rate of at least 150% of the national average—have long been popular in the EB-5 industry. Usually located in urban settings, these developments promote economic growth in areas in need and are typically safe options in terms of both financial and immigration success.
High-Unemployment TEA Project: Saltaire St. Petersburg
Saltaire St. Petersburg, a condominium development in downtown St. Petersburg, Florida, has already created all of the needed jobs for its EB-5 investors, and the units are 100% sold out. This makes Saltaire St. Petersburg a particularly low-risk option for EB-5 investors interested in a set-aside visa. New investors in this project will also receive I-526E approval refund and loan repayment guaranties.
Regardless of the project type, EB-5 investors should avoid projects in which the regional center sponsor is affiliated with or shares the same name as the project developer. These projects are unlikely to honor their fiduciary responsibility toward EB-5 investors. As the regional center sponsor for the three above projects, EB5AN is fully independent of the developers.
Concurrent Filing and Partial EB-5 Investments
Besides obtaining a set-aside visa, EB-5 investors can also avoid delays in the immigration process through concurrent filing or by making a partial investment.
The Reform and Integrity Act allows EB-5 investors already living in the United States on a non-immigrant visa to file the I-526E and I-485 petitions concurrently. As a result, investors may be able to adjust their immigration status relatively quickly and even obtain employment authorization in approximately six months—or less. Concurrent filing allows EB-5 investors to live and work in the United States while they wait for Form I-526E to be adjudicated.
EB-5 investors who cannot provide the full minimum investment amount of $800,000 at once may consider making a partial investment. EB-5 projects that offer this option to investors often require investors to pay the full amount in installments 6 to 12 months after making an initial partial investment.
EB-5 visa applicants who make a partial investment will be able to file Form I-526E after depositing their initial funds and get started on the EB-5 process quickly. This may be particularly useful for investors interested in obtaining employment authorization quickly through concurrent filing.
EB5AN’s Wohali Utah project is currently accepting partial investments.
Obtain A Set-Aside EB-5 Visa With EB5AN
If your country is experiencing a high demand for the EB-5 visa, investing in one of the new set-aside visa categories can make the immigration process significantly faster. You may be able to immigrate to the United States years earlier than otherwise possible, and if you file forms I-526E and I-485 concurrently, you may be able to obtain employment authorization in a matter of months.
For more information on the best way to obtain a set-aside EB-5 visa, please schedule a free consultation with EB5AN or email info@relocatepuertorico.com.
