US Immigration: No visa backlog under the EB-5 rural category now

The EB-5 visa is a popular route to acquire a US Green Card and get permanent citizenship in America. The EB-5 program is essentially an employment-oriented, investment-driven visa that allows foreigners to live and work in the United States.

In an exclusive interview with Financial Express Online, Carel van der Merwe, Director of Sales at EB5 Coast to Coast, discusses the key trends shaping the EB-5 segment, new regulations affecting the processing time of immigrant visas, and the benefits of selecting rural projects under the EB-5 visa category.

Could you share some recent updates to the EB-5 program?

In March of 2022, the EB-5 Reform and Integrity Act pushed forward new regulations that granted priority preference to rural projects. Of all allocated EB-5 visas per year, rural petitions account for 20% of set-aside visas. This means that while many countries are facing a backlog of applications in the EB-5 visa category, those filing a rural investment petition benefit from a “current” petition. In simpler terms: as of February 2024, there is no visa backlog under the EB-5 rural category.

Moreover, rural petitions are designated to receive accelerated processing. Currently, EB-5 petitions are taking 56.5 months to adjudicate.

In April of 2024, the filing fee for the I-526/E is due to increase from $3,675 to $11,160. This fee intends to be allocated toward decreasing the processing times of EB-5 applications. Additionally, due to an excess of 20,000 carryover visas from past years, it is anticipated that EB-5 beneficiaries may expect faster processing times.

Further, the EB-5 Reform and Integrity Act of 2022 created new guidance that declares that the sustainment period, or the amount of time EB-5 investment capital must remain “at risk,” is 2 years from the date that “the full amount of qualifying investment is made to the new commercial enterprise and placed at risk under applicable requirements, including being made available to the job creating entity, as appropriate.”

Investors no longer have to remain in financial limbo for an undetermined number of years while their application is adjudicated.

Are projects in the EB-5 rural category attracting investors?

According to the American Immigrant Investor Alliance, approximately 16% of all Form I-526Es were filed by Indian nationals and of those, 36% were in rural projects.

Indian investors recognize the advantage of rural projects, which allow investors to apply for a set-aside visa. As of February 2024, there is no visa backlog on the Visa Bulletin for rural investments in the EB-5 category. Indian individuals inside the U.S. on a nonimmigrant visa can file for their I-526E and green card simultaneously.

National interest projects can be defined as projects that serve a particular need in the United States and that require funding. The medical sector particularly demands funds due to the ever-growing demand for healthcare, particularly in vulnerable regions. These projects address critical needs and enjoy widespread support from governments at the state and local levels.

Addiction treatment centers (ATCs) have demonstrated that they fall under such a category and receive special consideration by USCIS. To qualify for national interest status, projects undergo rigorous scrutiny and necessitate extensive documentation demonstrating their substantial merits and benefits. EB5 Coast to Coast undertakes thorough research to identify projects that can fall under the national interest category.

Discovering rural projects that are viable, generate employment, and have growth potential is challenging and demands careful deliberation. Leisure and recreation projects in rural towns are popular given their ability to attract clientele year-round.

Other ventures that do not require proximity to a major city include addiction treatment centers, hospitals, factories, and call centers. The United States government views rural projects as highly attractive due to their capacity to develop underserved areas and demonstrate the positive impact of immigrants on the U.S. economy. Often, local and state governments provide financial and legal assistance to these projects.

How global economic trends may be influencing the demand for EB-5 visas?

The world-class education in the United States is an attractive prospect for investors with children. As a US resident, an education at one of top 100 schools in the world such as UCLA, UC Berkeley, or the University of Texas at Austin can cost half of what an international student pays. Countries like India, South Korea, and China take advantage of the benefits the EB-5 program offers.

Countries that lack an E-1 or E-2 visa treaty can often turn to the EB-5 visa for similar benefits. The Constitution of India does not allow Indian citizens multiple nationalities, so Indian citizens cannot become citizens of an E-1 or E-2 treaty country. Therefore, the EB-5 visa is the sole option for a self-petitioning option via investment.

Finally, countries suffering from an economic downswing due to COVID-19 and its restrictions are also inclined to pursue an EB-5 investment.

What are the key factors investors should consider when evaluating EB-5 investment opportunities?

Project viability

Due diligence for business viability and immigration viability.

Potential returns

Investors must account for the fact that RC projects will have lower returns, which is what entices projects to use EB-5 capital in the first place. This is especially true for rural/national interest projects wherein the investor receives a tangible benefit via accelerated processing.

Immigration outcomes

Investors must understand the visa processing timeline given how results change according to the type of project: direct investment, TEA, non-TEA, national interest, and rural.

Investors must understand the three-step process: investment of funds and filing of the I-526E, a two-year investment commitment and approval of the I-526E, then the filing of the I-829 removal of conditions. The type of project influences the I-526E processing time, which shortens the gap between when a person can file the I-526E and the consular processing for the green card. Investors in the United States may file the I-526E and I-485 concurrently if the Visa Bulletin declares that EB-5 subcategory “current.”

How important is it for investors to conduct thorough due diligence on EB-5 projects and regional centers before making an investment decision?

Due diligence is a vital process prior to committing to an EB-5 project. Investors must account for the following:

Business viability

Must understand if the business has risks associated with location, exit strategy, industry strength, job creation potential, job cushion, management quality, return on investment, capital stack, etc.

Immigration viability

The project should meet the requirements necessary for an EB-5 Job Creating Enterprise (JCE). The JCE must create ten jobs per investor, must have an associated registered Regional Center, should have experienced business and immigration counsel guiding it.