Increasing Demand for the EB-5 Program and Backlogging
How EB-5 Investors Can Get Faster Processing Under the RIA
It has been more than a year since the EB-5 Reform and Integrity Act of 2022, known as the RIA, was signed into law in March 2022. The legislation reauthorized the expired EB-5 Regional Center Program for another five years through September 2027 and introduced comprehensive measures to reform and streamline the EB-5 Immigrant Investor Program for better efficiency and accountability.
The RIA also announced major incentives for faster processing of rural EB-5 petitions that held a great deal of promise for investors from high-demand countries, namely India and China, with highly backlogged queues and years-long waiting times.
Increasing Demand for the EB-5 Program and Backlogging
The EB-5 program, administered by the federal agency United States Citizenship and Immigration Services (USCIS), was created in 1990 to stimulate the U.S. economy through job creation and capital investment by immigrant investors. It enables foreign nationals and their eligible dependent family members (the spouse and unmarried children under 21) to obtain lawful permanent residency in the United States by investing in a commercial enterprise and creating 10 permanent full-time jobs for qualified U.S. workers.
Over the years, the program has gained popularity among wealthy immigrant investors as a fast and straightforward route to a U.S. Green Card, offering them unrestricted freedom to live, work, study, and retire anywhere in the United States. Further, they can apply for U.S. citizenship within five years of obtaining their resident status.
Although the demand for the EB-5 visa has seen a steep rise, especially in the last decade, only 10,000 (approximately) EB-5 visas are available annually. On top of that, the number of EB-5 visas available to each country is further limited to 7% of the total EB-5 visa quota. This 7% cap is fixed for all countries irrespective of the large variation in country-wise demand for the visa.
As it stands, most of the applications for the EB-5 visa come from India and China. With the supply being limited, there are huge backlogs and retrogression for EB-5 applications coming from these countries,
In a move to encourage EB-5 investments in areas that need economic stimulation, the new legislation introduced measures such as set-aside visas for specific projects and priority processing for rural investments. These provisions presented a remarkable opportunity for investors to sidestep the backlogging and obtain their EB-5 investor visa in an unprecedented short span of time.
As a result, in July 2023, a rural I-526E petition received approval in just 11 months — cutting short the processing time by years. It proved the effectiveness of RIA provisions for the fast-track processing of specific EB-5 applications if they met the criteria.
How EB-5 Investors Can Get Faster Processing Under the RIA
Before the RIA, it was normal for EB-5 applicants to wait for years before they could receive their Green Cards and avail of the EB-5 visa benefits, especially from countries where EB-5 demand far exceeded the visa supply.
The excessive wait time and processing delays meant that they would have to keep their career or education goals on hold and stall plans for their future in the United States for an uncertain time while their EB-5 capital remained invested and “at risk.”
The unreasonable processing timelines were also detrimental to the popularity and image of the EB-5 program, which in turn affected the U.S. economy by depriving it of a convenient source of capital.
Providing a welcome relief to EB-5 stakeholders, the RIA promises to change this scenario through some significant measures for expediting EB-5 petitions and clearing mounting backlogs.
Set-Aside Visa Quota
Aiming to redirect EB-5 investments to low-economic activity areas, the RIA allocated 32% of the total EB-5 visa quota as set-aside visas, reserving 20% visas for rural areas, 10% for high-unemployment regions, and 2% for infrastructure projects.
By choosing to invest in projects that qualify for set-aside visas, EB-5 applicants can bypass the unreserved category with long waiting times. So long as the set-aside quota is available, applicants can potentially obtain an EB-5 visa as soon as their I-526E petition is approved, as there are no delays or backlogs in these categories as of now.
This is an invaluable opportunity for fast-track approval of applications, but investors must file their petitions quickly as the set-aside visas may get used up fast.
Besides the expedited processing, investing in a TEA project — whether high-unemployment, rural, or infrastructure — benefits applicants financially as well, as it makes them eligible for a lower investment amount of $800,000 as opposed to the standard minimum investment of $1,050,000.
Priority Processing
Apart from reserving 20% visas for rural EB-5 investments, the RIA mandates that applications for projects located in rural areas will be eligible for priority processing.
Thus, rural EB-5 investors get both the benefits of the set-aside visa quota and priority processing.
There are other advantages that make rural projects a better option than the other two set-aside categories, namely, high-unemployment regions and infrastructure projects.
Firstly, the set-aside quota for rural projects is the highest (20%), reserving maximum visas under this category, but the demand for rural investments is still low. Comparatively, high-unemployment TEAs are more in demand, and the quota (10%) will likely be depleted first. On the other hand, infrastructure projects with just a 2% quota are a relatively unfamiliar category and are marred by ambiguity regarding their qualification criteria.
Rural investments, however, also entail unique challenges, and EB-5 investors must carefully research and select high-quality, low-risk projects to have higher chances of immigration and financial success.
Concurrent Filing and Adjustment of Status
For investors already residing in the United States on a valid non-immigrant visa, the RIA allows them to file Form I-485 for adjustment of status (AOS) concurrently with Form I-526E.
After filing Forms I-526 and I-485, investors not only get the right to continue to stay in the United States while their EB-5 petition is being processed—their immigration process is also shortened as they do not need to wait for the approval of the I-526E petition before filing Form I-485.
It also enables them to apply for a work permit and travel authorization, after which they can work and travel freely without restrictions. Once these documents are obtained, which may not take more than a few months, applicants enjoy many of the benefits of a Green Card even before obtaining one.
After much speculation and waiting, the measures announced in the RIA are finally delivering results. Though there was a surge of EB-5 applications post-RIA due to the renewed interest of investors in the program, uncertainty regarding the processing time of applications has persisted until recently, when, at last, applications started receiving fast-track approvals.
For more information on trends in the EB-5 industry, schedule a free consultation with EB5AN.
