The Current and Future State of the EB-5 Program
Last month, Kristina Hernandez provided an overview of the EB-5 process, describing how to apply, and how to eventually obtain a Green Card. This article will provide a more in-depth insight into what the EB-5 process looks like right now, and more importantly, what changes are we seeing on the horizon.
As of now, the EB-5 program is still an excellent option for immigrants from almost any country who have the means to invest the minimum amount. If you have been keeping an eye on the current trends in business immigration, then you may know that using the H-1B visa as a pathway to get a Green Card has become increasingly difficult.
The EB-5 program offers a much faster alternative. Not only is there no backlog for anyone other than mainland Chinese nationals, but there are also added benefits such as the freedom to travel and in-state tuition at public universities. Below are the current processing times for the three applications that must be filed. However, despite these long processing times, non-Chinese immigrants are still able to obtain a green card in about two years.
- I-526: The current processing time is between 20 to 25 months. There are, of course, outliers, with some cases taking more or less time. Typically if an investor files for a project that has already been approved by USCIS, it will take less time to process the I-526. On the contrary, if the I-526 is filed based on a pending I-924 (Application for Regional Center Under the Immigrant Investor Pilot Program), the I-526 will almost never be approved until the I-924 is approved.
- I-829: The current processing time is between 2 ½ to 3 years. This is after waiting the requisite 2 years from the approval of the I-526. Despite I-829s taking so long to adjudicate, USCIS officers have been instructed to issue extensions of the conditional green card in one year increments, allowing the investor to continue to travel freely.
- I-924: The current processing time is over 20 months.
The most frequent investors are immigrants from mainland China, Vietnam, South Korea, Taiwan, and India (respectively). Currently, Chinese nationals are the only ones facing a backlog. However, it is expected that Indian nationals will face a backlog by the summer of 2019, and that Brazil, Korea, and Taiwan will face a backlog by the summer of 2020. This is due to the large upswing in the number of EB-5 applications filed as an alternative to the EB-2 and EB-3 employment-based visas. Despite the backlog, the EB-5 process would still be a much faster alternative for Indian nationals.
One important thing to note, however, is that you must keep your investment going throughout any backlog period. For example, those from mainland China must maintain their “at risk investment” for the 10-15 years that it may take to obtain a Green Card. This is important keep this in mind if you are investing funds that you will need access to after a number of years.
The future of EB-5s: Legislative and Regulatory Changes
As it stands, the EB-5 program is set to expire on September 30, 2018. Most do not find this concerning because the program has been extended more than 10 times since it was started in 1990. However, with the midterm elections on the horizon, we could see some difficulty in getting new legislation passed. The proposals for changes that have been released focus on three major issues: minimum investment amounts, TEA (Targeted Employment Area), and priority date retention.
While many things in immigration right now seem uncertain, an increase in the minimum investment requirements seems to be the most certain change. The investment amounts have not changed since the program was started in 1990. If an investment is in a qualifying region, the minimum investment amount is $500,000, otherwise it is $1,000,000. Right now there are two proposals being made. The first proposal comes as a regulation change from DHS. This proposal seeks to increase the minimum investments to $1,300,000 and $1,800,000. The second proposal is for a legislative change coming from Congress. This includes a much more reasonable increase to $925,000 and $1,025,000.
As I mentioned, an increase seems inevitable. Rather than fighting any change at all, the best thing to do would have the pro-immigration community work together to lobby congress for a legislative change.
TEA (Targeted Employment Area)
Starting an EB-5 project in a “targeted employment area” lowers the minimum investment amount from $1,000,000 to $500,000. As of now, the statute very clearly grants this authority to state and local governments. However, these new proposals would take that authority out of the hands of state and local governments and give it to the federal government. This may effect what is designated as a “targeted employment area”.
Priority Date Retention
In the past, if something caused an EB-5 application to become invalid, an investor could simply find a new investment project and refile because the processing time was so short. However, as the backlog grows for Chinese nationals, and looms in the future for Indian nationals, this may no longer be viable option. In response to this issue, DHS has proposed a change to the regulation that would allow an EB-5 applicant to save his priority date from his original filing and use it in his subsequent filing. That means, for example, if the investment project is not performing to the necessary standards, the investor could invest in a new project without losing his priority date from his original investment.
Since, as previously mentioned, you have to maintain your “at risk investment” while you are waiting for your priority date to come current (for those who are held up by the backlog), this new proposal will be particularly helpful to Chinese nationals. Unfortunately, this proposal does not extend to those who are derivatives of the EB-5 investor. When you are granted a conditional Green Card as an EB-5 investor, your spouse and children (those under 21) are also given conditional Green Cards. One of the new concerns is that the adjudication period is taking longer and longer, and children are becoming at risk of aging out. Even with this new proposal, children who turn 21 before the conditions are removed from their Green Card will not be able to use their former priority date. They will have to either find another way to stay in the country legally, or they will have to find a new EB-5 investment project of their own.
Although I have barely skimmed the surface of the EB-5 visa, this article should provide a good insight into what is going on currently with the program and what we expect to see in the coming months. If you have further questions about EB-5 visas, please contact a qualified immigration attorney.