The popular EB-5 visa, which offers wealthy foreign nationals a green card for investing and building businesses in the US, is back and just got more exclusive.
The biggest change is the higher investment amount which will increase the foreign investment inflow to the US through the EB-5 Reforms and Integrity Act of 2022 after President Joe Biden signed it into law on March 15. The bill that reauthorizes the EB-5 regional center program also includes provisions that channel investments to regions in the US that require it the most and puts more protections for immigrant investors in place.
As per the new law, the minimum investment amount increased from $500,000 to $800,000 or $1 million to $1.05 million depending on the location of the business.
The lesser price tag of $800,000 is for projects in rural, high unemployment areas or government administered infrastructure projects.
To be eligible for the EB-5 visa, investors have two options.
Under the direct EB-5 visa category, investors need to invest and build a company that creates full-time employment for at least 10 people.
The second and more popular option involves investing in one of the current 632 regional centers which are public or private entities approved by the US Citizenship and Immigration Services (USCIS) where the investor doesn’t have to be involved in running the day-to-day operations.
"The regional centers offer you a passive way to invest because it's a bigger project, with more safeguards than a direct project. In this sense, it's easier to create the ten jobs that are required to get a green card," says Rajvir Batra, co-founder of the American Immigrant Investor Alliance, a non-profit advocacy group that represents the interests of over 5,000 EB-5 investors
However, the regional center program lapsed in June of 2021 which meant that no visas could be issued for investors who applied via this route affecting more than $15 billion in capital which was already committed by the EB-5 investors. For more than eight months, over 32,000 existing investors were in limbo with no clear idea as to when their files would be processed again.
New investors who are already present in the US, now have the opportunity to concurrently file for their EB-5 visa and apply to adjust their status to receive a temporary green card. “What this means is that they would get the benefit of getting permission to work and permission to travel, even while their application is pending, which was not there prior to March 15” says Rohit Turkhud, an attorney at Chiesa Shahinian & Giantomasi PC.
The new law also introduces visa allocation and puts in place priority processing based on the project type. Individuals investing in rural areas are allocated 20% of the visas, while 10% of visas will be reserved for investors with projects in high unemployment areas and 2% for those with qualifying infrastructure projects.
“What it really means though, at the end of the day for rural areas is that it basically has created a lot of buzz and so there will be more options on the market for rural projects,” says Rohit Kapuria, partner at Saul Ewing Arnstein and Lehr LLP.
Some of the new changes brought in also protect investors. Now, children of investors are protected from the issue of ‘aging out’ their opportunity of getting a green card after they turn 21. So long as the child remains unmarried and the investor gets an approved green card, the child will also be eligible.
In order to prevent a repeat of the situation where the USCIS suspended processing all pending petitions after the program expired last June, the new law puts in place a “grandfathering” provision. This allows visas to be processed even if Congress fails to reauthorize the program before it expires on Sept 30, 2027.
However, the question remains on whether existing investors will be able to benefit from these new protections as well. “The main agency [USCIS] that's tasked with overseeing the proceeds of the law hasn't yet given us guidance. So we are continuing to work in a vacuum” says Kapuria.
The EB-5 visa is particularly popular among Indians already in the US with nearly one out of three Indian investor applications coming from people who already live in the US on either employment based or student visas.
Batra who is also a current Harvard undergraduate student from India applied for the EB-5 visa in 2019. The EB-5 visa promised him a faster route to a green card than other employment based visas due to the long wait times for Indian-born individuals.
The EB-5 visa has been around since 1990, with 10,000 visas allocated annually to investors and their family. After China, Indian applicants received the most EB-5 visas at about 8% of the visas for the fiscal year of 2019.
