It has been nearly two years since the EB-5 Reform and Integrity Act (the RIA) was signed into law by the U.S. Congress 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 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
How EB-5 Investors Can Qualify for Faster Processing of Their EB-5 Petitions
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 just five years of obtaining their permanent 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, a large volume of applications for the EB-5 visa comes from India and China. With the supply being limited, there are huge backlogs and retrogression for applications coming from these countries, and the waiting times are ever-increasing.
In a move to encourage EB-5 investments in areas that need economic stimulation, the new legislation introduced set-aside visas for TEA and infrastructure projects and priority processing for rural TEA investors. 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. 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 Qualify for Faster Processing of Their EB-5 Petitions
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 developmental 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-526 petition is approved, as there are practically no delays or backlogs in these categories as of now.
This arrangement mainly benefits Chinese and Indian investors. These are currently the only two countries with a backlog of EB-5 visa applications.
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 shall be eligible for priority processing. Thus, rural investments get double benefit of the set-aside visa quota and priority processing over other petitions.
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 introduced an exceptional facility to file Form I-485 for adjustment of status (AOS) concurrently with their EB-5 application through EB-5 Concurrent Filing.
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-526 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. A recent investor in EB5AN’s Twin Lakes project obtained work authorization in only 60 days.
After much speculation, the measures announced in the RIA are delivering results. As more rural EB-5 petitions get adjudicated quickly, the EB-5 industry can hopefully look forward to the reduction of massive petition backlogs accumulated over the years.
