Preeya Malik, MD, Step Global

The day has finally come when the announcement has been made that Indian born nationals have entered retrogression under the EB-5 Immigrant Investor Program. Retrogression occurs when a certain visa category is oversubscribed than the number of visas available in that category. In the October 2022 visa bulletin released by USCIS (United States Citizenship and Immigration Services), it seems that the number of visas in unreserved categories has been oversubscribed specifically for Indian born nationals, creating a backlog in visa allocations under this category.

However, there are very important things to note for Indian born investors who would like to better understand how to still participate in the popular EB-5 scheme — which allows foreign investors to make a refundable investment of $800,000 in a government-approved US project to obtain a green card for the investor, the investor’s spouse, and any children under the age of 21 at the time the application is submitted.

What is a priority date?

A priority date is the date on which an application was filed with the immigration authority. This date indicates an applicant’s place in the visa queue where there may be a limited number of immigrant visas available in a given year. On the monthly visa bulletin released by USCIS, the date indicated in each category shows the priority date for which the category is “current”. For example, in the unreserved EB-5 category the priority date listed for Indian nationals is currently November 8, 2019.

This means that anyone who has applied after November 8, 2019 in an unreserved category may experience additional wait times in order to receive their visas. Anywhere in the chart which lists “C” indicates that the category is current, meaning anyone applying today will experience normal wait times in order to receive a visa in that category.

Reserved Categories under the EB-5 Reform and Integrity Act

In March 2022, the government introduced and passed a new bill called the EB-5 Reform and Integrity Act of 2022 . This bill includes important amendments to the EB-5 Program which have been discussed for years, such as a price increase to $800,000 USD and stronger security measures for investors and projects. Arguably, the most notable change made was the introduction of certain reserve categories for visas.

Under the EB-5 program, 10,000 visas are allocated annually. Out of these 10,000 visas only 7 per cent can come from any individual country. This measure was introduced a few years ago to ensure that there were a diversity of nationalities receiving the opportunity to enter the US via the EB-5 Program.

The government decided under the EB-5 Reform and Integrity Act of 2022, that it was necessary to further bolster the original purpose of the program from its 1990 inception, which was to bring foreign investment into revitalizing and economically growing rural areas. Therefore, they set aside or reserved a certain number of the 10,000 visas specifically for rural, infrastructure, and high unemployment areas under the new regulations. Moving forward, 20 per cent of the visa allocation will go to applicants who have invested in a rural project, 10 per cent will go to applicants who have invested in a high unemployment area, and 2 per cent will go to those who have invested in an infrastructure project.

Applicants in these categories should be processed faster as there are a smaller number of processing slots in these areas. Those in a rural category will receive priority processing. Currently, the backlog does not affect these categories as these are new and have only just been introduced.

Change in the definition of Targeted Employment Area

A Targeted Employment Area (TEA) is considered a high unemployment area and is defined as an area where the unemployment rate is 150 per cent of the national average. Although this definition has remained constant, under the EB-5 Reform and Integrity Act of 2022, the way a TEA is allocated has changed. Previously, if an area was surrounding contiguously by TEA zones, the central area would also be considered a TEA under the assumption that employment was also being created for surrounding census tracts.

However, now a TEA zone must fit the unemployment definition on its own in order to be counted as a high unemployment area. The effect is that metropolitan areas, like Manhattan, which could previously obtain TEA designation, are now no longer considered high unemployment. Since they no longer fit the area of high unemployment, they are now considered an unreserved category for the purposes of visa allocation.

The secondary effect of this change, is that anyone who had applied under the EB-5 Program prior to March 2022 when the changes were made, even if having applied in a TEA category at the time (like Los Angeles or Manhattan), are now considered an unreserved category. Therefore, only this category (and those who applied prior to March 2022) are experiencing retrogression for Indian born nationals, and not those who will apply now under one of the newly rese

Retrogression only for those born inside India

Emphasis should be made on the fact that the backlog announced is only applicable to Indian born nationals – those born in India. If you hold an Indian passport, but were not born in India, retrogression will not apply to you.

This is important to note as many expat Indian investors choose to do this program for their children. Many children across the GCC and Middle East were in fact not born in India although they do hold an Indian passport. Families may apply through the EB-5 Regional Center Program for their non-Indian born children and will experience only normal processing times in any category of project.

Solution of concurrent adjustment of status filing

Another notable change which was introduced in the EB-5 Reform and Integrity Act of 2022, was the ability for individuals located inside the United States, to file concurrently for Adjustment of Status (AOS) at the same time as they apply for their EB-5 application (I-526E). This effectively counteracts retrogression in two ways.

First, with the AOS filing an applicant can receive an Employment Authorization Document and Travel Document within 4 to 9 months. These documents allow the applicant to live in the United States, obtain employment without sponsorship, and travel freely in and out of the US while they wait for a visa allocation. In this scenario, the visa allocation becomes irrelevant to an extent as the applicant still has access to the United States before the visa is actually allocated. These documents can continue to be renewed until the green card is issued.

Second, currently those who are filing AOS are being allocated visas while those outside of the US are the ones who will have to wait for visa allocation. Therefore, we encourage those who have a valid US visa of any type to contact us to find out if they are eligible under AOS concurrent filing. In addition, those who did file EB-5 applications prior to March 2022 can also find out about AOS concurrent filing eligibility to counteract the effects of backlog in the unreserved categories.

Act now to avoid retrogression backlog

Although the EB-5 Regional Center Program was reauthorized in March 2022, it has only recently opened a few weeks ago with regards to taking in new investors under the guidance of USCIS. As a result, very few investors have already filed post March 2022 and all reserved categories at this point in time have not been oversubscribed.

This means that filing now in the largest reserved categories, namely – rural projects and high unemployment projects – will get you closer to the front of the line before these categories are also exhausted.

Remember that only unreserved categories (those who have applied prior to March 2022) have been oversubscribed thus far. Applying now for a TEA or rural project will mean you have your priority date and will be in queue for visa allocation with priority processing.

Many projects will also take partial funding, meaning an investor can make a deposit and get their application in queue while they take time to fund the remaining amount of their investment. This assists individuals who do want to get their place in line and avoid a backlog, but also need time to liquidate assets or get their funding together.

Projections and evolution of the EB-5 Program

It is important to note that all visa bulletins released by USCIS are projections based on the number of applications estimated to apply under the EB-5 Immigrant Investor Program. Therefore, potential investors should take heed of the information and take measures to get applications in queue in a timely manner but also realize that this information and timeline may improve over time. The takeaway here is “the sooner the better” meaning a delay in applying now could extend the processing timeline for an Indian born national in the future.

There is still an open issue with regards to whether the US State Department will allow any unused visas (either from countries who have not exhausted their 7 per cent cap or from categories which have not been used) to roll over and be used within the same year or the following year. It is also unclear whether some 68,000 unused visas during the Covid slowdown may be allocated to assist with any backlogged US immigration programs. Any of these elements would assist with a shorter processing time for the currently unreserved categories which have been oversubscribed.

Leading EB-5 firm in the GCC

Step Global remains as one of the leading EB-5 firm in the GCC, and currently has projects available in all reserved categories for those who are interested in applying now to get in the EB-5 queue before these categories are exhausted or oversubscribed.

Step Global’s vast legal and EB-5 network allows them to provide not only expert service but also exclusive projects including those where they have successfully received approvals on expedited requests for many clients. Step Global lawyers are happy to sit down with you to properly put a plan in place for your individual EB-5 journey. Under the aegis of Preeya Malik, who herself is a US lawyer specialized in the US immigration statutory framework, Step Global have 100 per cent track record of approvals across all applications and over 12+ years of experience in the EB-5 industry, making Step Global well positioned to provide clients with the expertise necessary for success