This RIA also ensures that EB-5 visa petitioners who invest in rural regions receive a special priority through an expedited process.
Furthermore, it has been made mandatory for organizations inviting investor pools to be affiliated with a regional center to qualify for the EB-5 program.
In addition, numerous EB-5 investors registered legal triumphs over the status of their applications in 2023.
In one particular case, Vermont paid $16.5 million to 850 EB-5 investors in the aftermath of an EB-5 project scandal.
ConclusionThe recent policy changes have renewed interest in the EB-5 visa program among Indians, especially high-net-worth individuals (HNWIs) looking for permanent residency in the US.
By Sumi Rengaraj
Once considered part of the upper echelon of permanent residency programs in the United States, the EB-5 investor visa program has somewhat lost its charm in the last decade. To reinvigorate it, the US authorities injected it with significant policy changes, impacting thousands of foreign nationals.
The EB-5 investor visa program has once again established itself as a popular solution for foreign nationals, particularly Indians, looking to receive permanent residency in the US, and the impact of the new policies has been enormous.
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The US government introduced the EB-5 Reform and Integrity Act (RIA) post-pandemic in 2022. Since then, the program has encountered several announcements, garnering significant attention as well as concerns from industry experts and foreign nationals alike.
The new regulations have sidelined categories, introduced brand new responsibilities for the regional centers, and enhanced fund security and reactivity concerning the processing period for individual applications, legality, and updates. The United States Citizenship and Immigration Services (USCIS) has been at the forefront of making these changes, resulting in renewed interest from overseas investors.
Policy shift
The USCIS introduced the EB-5 Reform and Integrity Act (RIA) in 2022. The biggest shift under the jurisdiction of the act introduced a new minimum investment period.
Foreign nationals looking to invest in the US through this program now need to sustain their funds for a minimum of two years, beginning from the date when these funds are placed with the job-creating organization, i.e., the regional centers.
Since these new regulations are introduced through the RIA, EB-5 investors do not need to maintain their investment for the entirety of their provisional residence. The new regulation dictates the investment must meet the job generation requirement in a minimum of two years, making it a more optimized way for foreign nationals seeking permanent residency.
However, provisions and announcements have been made in the RIA in the last couple of years.
The Reform and Integrity Act of 2022
When the US government introduced the RIA in 2022, the motive was to boost the prospects of investments and job creation, as well as streamline the investment and visa processes for foreign nationals.
The Act offered to invest capital anywhere in the US and its territories without any limitations. Apart from increasing the minimum investment period, the RIA also increased the minimum investment amount, raising it from $500,000 to $800,000 for Targeted Employment Area (TEA) programs and $1,000,000 to $1,050,000 for other projects.
Additionally, the act also explained the Targeted Employment Area. Under the new policy, rural areas or regions witnessing a significantly high unemployment rate (minimum 150%) were classified as Targeted Employment Areas. The authorities streamlined this process by taking control from the states and introducing uniformity by making the USCIS the determining entity.
The policy change also introduced a reservation of visa categories by permitting a 20% reservation for applicants investing in rural area programs. Furthermore, another 10% and 2% of visas have been reserved for investors focusing on high-unemployment areas and infrastructure development projects.
This RIA also ensures that EB-5 visa petitioners who invest in rural regions receive a special priority through an expedited process. The RIA also introduced an extra EB-5 Integrity fee of $1,000 and the filing fees during the I-526 petition.
However, the government has also introduced provisions to safeguard the investors who have already submitted their petitions to the USCIS by making them immune to any policy changes for the rest of their investment journey.
Furthermore, it has been made mandatory for organizations inviting investor pools to be affiliated with a regional center to qualify for the EB-5 program. Apart from this, investors have been provided with improved security through several compliance requirements for stakeholders.
The investors are presently offered a significantly faster avenue to permanent residency through the EB-5 program. Under the new regulation, the government allows simultaneous filing of the I-485 application while the I-526 application is pending.
This translates to applicants being enabled to file permanent residency papers without leaving the country and to work inside the US.
Impact of New EB-5 Visa Rules
The introduction of the RIA has significantly changed the face of the EB-5 program, which was evident from the increase in I-526 forms processed in 2023. An increasing number of applicants received approvals in their petitions, while there was a significant drop in denials.
When the authorities changed the classification of the rural Targeted Employment Areas, it also increased the number of projects and investor applications as a result.
The USCIS’s updated policy manual led to adding and cross-checking information, as well as the launch of Enterprise Change of Address, or E-COA, a self-service tool focused on optimizing the process of updating petitioners’ addresses.
In addition, numerous EB-5 investors registered legal triumphs over the status of their applications in 2023.
In one particular case, Vermont paid $16.5 million to 850 EB-5 investors in the aftermath of an EB-5 project scandal. In another case, several investors won a legal battle against the USCIS, resulting in a renewed outlook on their obstructed I-526 applications.
The impact on Indian investors was also huge, as they received final action dates and dates of filing advance, advancing one year from December 2018 to April 1, 2022. The overall impact on EB-5 investors has been immense, as a new optimized process and transformed experience have improved job creation, accessibility, infrastructure development efforts, and investor trust in the program’s viability.
Conclusion
The recent policy changes have renewed interest in the EB-5 visa program among Indians, especially high-net-worth individuals (HNWIs) looking for permanent residency in the US. The transformation is evident in the number of EB-5 visas (676) issued to Indians in 2023, marking a considerable leap.
As per the USCIS report in December 2023, as many as 2,393 I-526 applications have already been filed by Indians, many have been approved and awaiting visa dates.
Presently, the USCIS has indicated that more than 20,000 EB-5 visas have been made available for overseas investors, particularly because of the carryover regulation in the RIA. Added to that, the Build It in America Act and the update of the Dignity Act are also ushering in hopes for more EB-5 reformation, with more investors joining up in the ranks.
(Author is Co- Founder of Ashton Gray)
