The EB-5 Immigrant Investor Program has long been an attractive option for foreign investors seeking U.S. permanent residency. However, the program’s popularity, especially among applicants from high-demand countries like China and India, has created significant visa backlogs. The EB-5 Reform and Integrity Act of 2022 brought important changes that aim to ease these backlogs, particularly for investors pursuing projects in Targeted Employment Areas (TEAs).

 

As the October Visa Bulletin marks the beginning of the new fiscal year, it reaffirms the advantages offered by the EB-5 reform. This bulletin further confirms the availability of set-aside visas and the absence of backlogs for certain EB-5 categories, solidifying the positive impact of these reforms for investors.

 

This article explores how the recent EB-5 reform impacts investors facing visa backlogs and explains the benefits the new set-aside categories provide, as compared to the traditional EB-5 investment options.

 

Visa Backlogs: A Long-Standing Challenge

 

For many EB-5 investors, visa backlogs have been a significant issue, particularly for those from countries like China and India, where the demand for EB-5 visas has historically outpaced supply. The U.S. allocates approximately 10,000 EB-5 visas per year, with a cap on the number of visas available per country. This has led to wait times extending over a decade for some investors.

 

Without reform, many EB-5 investors faced uncertainty about whether and when they would receive a visa.

 

How the EB-5 Reform and Integrity Act Addresses Visa Backlogs

 

The EB-5 Reform and Integrity Act of 2022 introduced several changes to alleviate visa backlogs:

 

• Set-Aside Visas for Targeted Employment Areas (TEAs): The reform created new visa categories that reserve a portion of visas for specific investment projects. These include 20% for rural TEA projects, 10% for high unemployment areas, and 2% for infrastructure projects. Investors pursuing these set-aside categories benefit from faster visa processing and no backlogs.

• No Backlogs for Set-Aside Investments: According to the latest data from the October Visa Bulletin​, investors choosing rural, high unemployment, or infrastructure projects under the reformed EB-5 program are not subject to the backlogs that continue to plague traditional EB-5 investments. The “C” designation in the visa bulletin indicates that visas are current and available for all qualified applicants investing in these categories. This is in stark contrast to the unreserved categories, where wait times can stretch for years.

• Priority Processing for Rural Projects: Investors in rural projects benefit from faster adjudication of their I-526 petitions, further accelerating the path to permanent residency.

 

Comparing Set-Aside Categories with Traditional EB-5 Investments

To better understand the benefits of the EB-5 reform, it’s essential to compare the new set-aside categories with traditional investment options: C5, T5, I5, and R5.

 

• C5 Investments (Direct Investment): These represent direct investments in commercial enterprises, but unlike set-aside categories, C5 investors are subject to backlogs and longer processing times, especially for applicants from high-demand countries like China and India. C5 investments do not enjoy the reserved visa benefits or priority processing available to rural projects.

• T5 Investments (TEA Projects): T5 investments have historically involved a lower capital requirement for projects in high-unemployment or rural areas. However, before the reform, these investments were not immune to backlogs. Under the reformed program, rural and high-unemployment TEA projects now have reserved visas and faster processing, giving them a distinct advantage over traditional T5 investments.

• I5 and R5 Investments (Regional Center Program): The I5 and R5 categories represent regional center investments, where investors pool capital and count indirect job creation. While these remain popular options, they are still subject to backlogs in countries like China and India. However, under the reformed program, rural and high-unemployment regional center projects benefit from set-aside visas and expedited processing, making them more appealing compared to unreserved regional center investments.

 

The Advantages Created From EB-5 Reform 

 

• Reserved Visas: The reform ensures that 20% of EB-5 visas are reserved for rural projects, 10% for high-unemployment areas, and 2% for infrastructure projects. This provides a clear path for investors from oversubscribed countries to obtain visas without facing the long wait times associated with traditional categories.

• No Backlogs in Set-Aside Categories: Investors in set-aside categories enjoy current visa availability, as indicated by the “C” status in the visa bulletin​(Document3)​(Document4). This is particularly beneficial for investors from China and India, where backlogs for unreserved EB-5 visas continue to stretch over years.

• Lower Investment Threshold for TEAs: The investment threshold for TEA projects remains lower, at $800,000, compared to $1,050,000 for non-TEA investments. This makes TEA projects more accessible while offering faster processing and no visa backlogs.

 

EB-5 Visa Bulletin Movement Confirms Shift Toward Set-Aside Investments

 

Due to changes introduced by the 2022 reform, many investors are shifting their focus toward rural and high-unemployment area projects. The appeal of reserved visas, faster processing times, and no backlogs is encouraging more investors to consider set-aside projects as a strategic alternative to traditional EB-5 investments.

 

This movement also represents a shift in how investors approach the EB-5 program, particularly those from countries with high demand. By choosing set-aside categories, investors can significantly reduce their waiting times and increase their chances of successful immigration to the U.S.

 

A New Path Forward for EB-5 Investors

 

The EB-5 Reform and Integrity Act of 2022 has introduced significant benefits for investors facing visa backlogs. By offering set-aside visa categories with faster processing and no backlogs, the reform provides a clearer, more efficient path to U.S. residency. When compared to traditional C5, T5, I5, and R5 investments, the set-aside categories offer distinct advantages, particularly for investors from China and India.

 

As the EB-5 program continues to evolve, understanding the impact of these reforms and strategically selecting investment projects will be key to navigating the U.S. immigration system successfully.

 

If you would like more information on the EB-5 visa, please contact our team to discuss further.