New EB-5 visa categories explained

The new EB-5 legislation, called the Reform and Integrity Act (RIA), was passed into law on March 15, 2022, and has many different rules and caveats on how visas get processed.  These rules may be hard for investors to navigate without consulting capable immigration counselors with EB-5 expertise. Let’s simplify some of the rules and explain the different wait times and procedures for investors to better navigate their investment immigration process.

The old EB-5 rules were a combination of the 1991 EB-5 Pilot Program and three decades of rulemaking by the federal agencies, namely the United States Citizenship and Immigration Services (“USCIS”), and its predecessor agency Immigration and Naturalization Service. The new RIA replaces the previous law, and in many cases replaces the agency rules that were made by the USCIS and INS, in instances where Congress explicitly outlies those rules in the RIA.

How law-making works in the United States

The United States Constitution stipulates that Congress has the exclusive power to make new laws and can delegate certain administrative rule making rights to the federal agencies. In this case the USCIS or DHS, to make additional rules and regulations to complement the Congress’s law-making powers. A good analogy would be to say that Congress paints with a broad brush and the federal agencies fill in the details of the painting. The federal agencies specialize in their respective areas of expertise and Congress delegates these powers to these federal agencies, which are all under the executive branch, under the powers of the President of the United States.

New EB-5 visa categories

Under the old EB-5 Pilot program, Congress authorized the State Department to issue 10,000 new visas each year (from Oct. 1 to Sept. 31 on the federal fiscal year) and out of these visas, 30 percent were set aside for TEA projects. The definition of TEA was either a region with an unemployment rate of 150 percent of the national average, or a rural area. Under old rules, both categories were considered a TEA, and every year 3,000 visas were set aside for the TEA category. Once those 3,000 visas were issued, the remaining visas would go back in the pool if they were not utilized. However, most of the projects were in a TEA – more than 98%.

Under the RIA, there are an additional 10,000 visas allocated by the State Department, but there are now 3,200 visas set aside and these visas are under three brand new categories. The first category is rural with 20% of the annual visas or 2,000 visas, the second category is high unemployment TEA with 10% or 1,000 visas, and the third category is infrastructure with 2% or 200 visas.

From what we as an industry have gathered, these brand-new visa categories are current, based on the State Departments visa bulletin. What this means is that new investors do not have to go to the end of the queue behind previous investors to get an allocation of visas. There are estimates that there are currently 30,000-50,000 investors in the queue and it is estimated that between 80-90% of those in the queue are Chinese nationals who were born in Mainland China. It is important to keep in mind, however, that investors awaiting USCIS processing of their I-526 application will typically have to go to the back of the queue in order to get their I-526 application approved. During the Trump administration, however, the USCIS decided not to process Chinese born investors’ applications because there were no visas available from the State Department, and these applicants were placed aside in a separate queue until visas became available. The USCIS is just now adjudicating applications that were filed by mainland Chinese investors in 2016. 

Expedited EB-5 filings

An expedite filing can be filed by individuals, given the individual investors’ circumstances, or they can be filed by a project. Individual cases of an expedite can be due to financial hardship, humanitarian reasons, or to fix an error that was clearly caused by the USCIS. For example, one such humanitarian reason was doctors that were applying for work authorization during COVID could be granted an expedite in order to speed up their entry into the United States, in order to start their medical practice due to COVID humanitarian reasons to benefit local United States residents.

A project-level expedite however focuses more on the circumstances around the actual EB-5 project. The old USCIS standard was called the “National Interest Exemption.” It entailed that the petitioner had to prove that the project at hand not only benefitted the local and state economies, but that the project had an impact on the overall nation, for example, for national security or other reasons why the project of a National Interest to expedite. Very few project were granted this expedite, and some abused the expedite status.

For that reason, the USCIS changed the expedite requirement to “The Interest of a Federal Agency,” requiring that projects file an Expedite application either at the time of the I-596 exemplar filing, or separately, explaining which federal agency or agencies’ mandates the project is furthering. For example, if a project is building energy efficient buildings with micro-gridding and saving electricity and/or installing a large number of electric chargers within their development, and it is within the Department of Energy (“DOE”) mandates to create more energy efficiency and create more electric charging station infrastructure, this could be used as an argument that the project is furthering DOE mandates on energy efficiency and electric charging station infrastructure.

If a project is for example as a consequence of development cleaning and dredging federal or interstate waterways and the clearing of the waterways, which are to the interests of The Department of Defense (“DoD”) for national security issues and for furthering a DoD mandate of improving waterway navigation by the United States Navy, United States Coast Guard or other DOD member agencies, an expedite filing could be made to make the argument for an Expedite with the USCIS. Typically, the USCIS has to adjudicate these expedite requests withing 90 days. An expedited project could be a very fast way for investors to fast-line the EB-5 process.

The USCIS also did away with the blank check expedites and required that each I-526 applicant file the expedite request of the project and USCIS would accept or deny the expedite, even when approved at the project level, on a case-by-case basis.

Old and new processing times

Typically, an investor files their I-526 application with the USCIS. Before the RIA and the almost one-year of EB-5 laws lapsing, this process was taking between 21-28 months. After the notice of I-526 approval, the investor has to get an appointment to attend the US Consular office in their home country. This process usually takes around four months. If the applicant is applying from Mainland China, the wait times for a Consular visit in Guangzhou can be double the typical wait time, reaching roughly eight months.

When an investor starts their intent to immigrate, then 21-24 months after that date, they can file their I-829 application–in pre-IRA this was taking around 32 months to adjudicate. Many of these average adjudication times are moving targets and we will not know where the wait times are headed but the industry anticipates that all of these average wait times should be coming down.

Concurrent filings

One new feature of the RIA is the concept of concurrent filing which can be a game changer for investors in terms of when they can start their immigration process. Under concurrent filing, an investor can have what is called “Advanced Parole.” The concept of Advanced Parole means that an investor who is legally in the United States under another visa category, such as an F-1 student visa, an L-1 work visa or many other visa categories, can remain in the United States and have legal work authorization until they receive their temporary green card. What Congress is essentially saying is that: we know our adjudication and immigration process is slow, we are rectifying that by giving you parole to stay and work here in the United States until our USCIS and immigration adjudication slow process catches up with market demand. Under Advanced Parole, an investor (and their co-applicants) can also travel with the visa to other countries the same way a green card holder could. One caveat is that if the EB-5 investor (and their co-applicants) enter the US on a tourist visa, they cannot immediately change status because their intent was tourism and not immigration. An EB-5 investor legally in the US under a tourist visa, could change their intent from tourism to immigration and remain in the US with work authorization the same way as and L-1, F-1 or other categories, but they cannot travel to other countries with that concurrent filing.  

Which categories are faster

Currently many regional centers are focused on rural projects, with the presumption that they will get processed much quicker than other applications because it’s a new visa category. This could not be further from the truth; If an investor invests in a rural project, they will still have to wait the average processing time of 21-28 months (subject to change) before they get their I-526 application approved. They have to also wait another four months to receive a consular interview (or eight months if in Mainland China, at the Guangzhou service center). They could be looking at 29-36 months to complete their consular interview before they even can reach the State Department for a visa from one of the set-aside visa categories.

Now this wait time can be shortened to the 21-28 months average wait time, if an investor is in the United States and does concurrent filing. But this could still be a 2 to 2,5 year wait time before the investor would reach one of the current set-aside visa categories.

If an investor files an expedite because of the investor’s circumstances or a project expedite, he will jump in front of the line at USCIS and will get his file adjudicated immediately. These expedites take anywhere from 3-9 months to adjudicate (subject to change). If an expedited investor has to go to a consular visit then add the 4 months, or 8 months for China, and that is the total approximate wait time. This category is much faster than any other category. Now if the expedited investor is one of the 3,200 new visa set asides, they will get a visa from the State Department immediately because these categories are current.

Those investing in a high unemployment area category or infrastructure category also are in that 3,200 current visa categories. The old TEA investors are at a disadvantage, because the new investor categories all take precedent, and the old TEA categories move to a new category called unreserved. The USICS, as it stands today, does not recognize any of the old TEA investor categories and it receives unreserved visas form the State Department. Investors from all countries, except China and India that are not current, are allowed to be in the United Sates on another visa and do a concurrent filing. 

Every year, 6,800 visas should be added to the unreserved category, for the old investors to be able to use. However, the 3,200 special visas are held for two years before any unused visas are released to the unreserved category. Unless the USCIS changes its policy and updates its new adjudication strategy, rural or other special visa set aside categories do not save investors any additional time, unless combined with an expedited filing. 

Realities of the new RIA since May, 2022

Since Congress passed the new RIA, and the RIA went into effect in May of 2022, several regional centers have brought rural projects into the market. Notably two or three of those projects have already raised north of $300 million for their projects through China alone. Two of those projects have also raised that same amount outside of China. There are also countless smaller rural projects that have also raised funds in China and elsewhere.

There is a good likelihood that the rural category may already be backlogged. RCs, agents, and investors that are focusing on a couple of words in the RIA that express that rural projects may get priority processing may be surprised when the USCIS decides that rural projects have the same priority as high unemployment or infrastructure categories, or even find out that the rural category may already be backlogged.

Meanwhile not many projects have entered the market under the high unemployment TEA, and as far as we know zero have entered the market so far as the infrastructure category. Investors should be weary and evaluate projects on their merits on their likelihood to get them their green cards approved and their capital paid back and not pay too much attention to these fast processing gimmicks, unless a project is in fact expedited due to imminence of a benefit to a US federal agency.

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1. A census tract or group of census tracts make up a region.

2. A rural area is considered any City or Political Subdivision with a population of 20,000 or less that is not in Metropolitan Statistical Area (“MSA”) County.

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