By: Rebecca S. Singh, Esq. & Joanna Lee, Esq.
With wait times for Indian and Chinese nationals to file adjustment of status through EB-2 or EB-3 for an employment-based green card estimated up to over 100 years, the EB-5 category continues to be the fastest route to a green card for those able to meet the investment requirements. This is even more so after the enactment of the EB-5 Reform & Integrity Act of 2022 (RIA), providing set aside categories that jumped investors in otherwise backlogged countries (e.g., China, India) ahead of pre-RIA cases.
What Are Set-Aside Visas Under EB-5?
The EB-5 category is allotted 10,000 visas to qualified individuals seeking lawful permanent residence via capital investment in a commercial enterprise. Most of these visas are in the Unreserved category that includes those applicants who invested prior to the RIA or any post-RIA investments that do not qualify for the set-aside categories. There are a set of reserved visas (the “set-aside” visas) for investments made in qualified Rural (20%), High Unemployment (10%), or Infrastructure (2%) locations.
The set-aside visas have been a game changer for Chinese and Indian nationals who, prior to RIA, already had visa backlogs in the unreserved category – allowing post-RIA individuals to invest in one of the three visa set-aside categories. These new investors can reap the benefits of 1) filing for their green card applications concurrently (or at the same time as their EB-5 applications if the investor is already in the U.S. under a nonimmigrant visa), 2) applying for employment and travel authorization if able to file for their green card concurrently, and 3) receiving conditional green cards sooner based upon the current visas available in these set-asides.
Potential Backlog?
As TEA and Rural projects continue in popularity amongst EB-5 investors due to immediate visa availability (and faster adjudication time, but for another discussion!), the big question remains: will we see backlog in certain countries? We at MSA, have long been predicting that it is only a matter of time before the TEA and Rural set-aside categories become backlogged for Chinese and Indian nationals. The number of petitions in queue for these two countries have quickly risen in just two years, even with the increased capital investment from $500,000 to $800,000.
However, it has been predicted by Michael Hanley, Data Scientist at the U.S. Department of State, that visas will remain current in all set-aside categories through FY 2024 and early FY 2025. For now, visas are still currently available under these categories, but don’t be fooled – the 2025 fiscal year begins October 1, 2024. Could there be backlog by the end of the year?
EB-5 Carryover – will it help backlog?
The Michael Hanely indicated that the Department of State is fairly confident in the FY 2024 and FY 2025 visa availability predictions based upon the number of unused or “carryover” visas from other categories that, as left unused, carry over to the next immigration category.
FY 2022
FY 2023
FY 2024 (est.)
FY 2025 (est.)
Worldwide Employment Limit
281,507
197,091
161,000
140,000
EB-5 Newly-Available Pool (7.1%)
19,987
13,993
11,431
9,940
Unreserved (68% of EB-5 Newly Available pool)
13,591
9,515
7,773
6,759
Reserved (32% of EB-5 newly available pool)
6,396
4,478
3,658
3,181
Reserved Carryover
6,496
4,478
3,658
Unreserved Carryover
6,396
4,478
Unreserved Total
13,591
9,515
14,169
11,237
Reserved Total
6,396
10,874
8,136
6,839
As we consider visa availability presently and for the future, the data suggests that for FY 2024 there are category visas available. These numbers factor visas from other immigrant categories that went unused and then “carried over” to EB-5 for use. These unused visas can largely be attributed to the Pandemic when thousands of visas went unused during that time period.
Michael Hanley suggests it will use the entire allotment of visas available for FY 2024. It is our hope that we will see a reduction in backlogged cases for investors in the unreserved category, those who filed pre-RIA, as it is only fair.
Based on the same numbers above, for FY 2025 there will be 11,237 unreserved and 6,839 reserved visas available. Looking closer at FY 2025 estimated numbers, if the “rest of world” petitions increase and China and India demand remains high, then final action dates could be set by mid to end of FY 2025 because there will be less unused “rest of world” visas available.
EB-5 Limits for FY 2025 (Baseline Estimates)
Category
Worldwide Total
China
India
Unreserved (68%)
11,237
787
787
Set-Aside: Rural (20%)
4,274
299
299
Set-Aside: High Unemployment (10%)
2,137
150
150
Set-Aside: Infrastructure (2%)
428
30
30
The above chart is a baseline estimate provided by Michael Hanley based on data from the U.S. Department of State. From these predicted numbers, China will use any unused “rest of world” unreserved numbers each quarter because they have the earliest priority dates.
At the May 2024 IIUSA EB-5 Industry Forum, the topic of visa availability in the set-aside categories was a primary focus for all who attended. IIUSA’s own compelling analysis of the State Department’s data found that visas should remain current for Chinese and Indian nationals in the set-aside categories at least through early to mid FY 2025.
Rural or High Unemployment?
If we rely on the fact that the set-asides are likely to remain current for the rest of FY 2024 and at least partially through FY 2025, it stands to wonder, which of the set-aside categories will become backlogged sooner – rural or high unemployment?
With the rural set-aside provided 20% or 2,000 of the total EB-5 visas and high unemployment set-aside provided 10% or 1,000 visas, along with the fact that there are simply more high unemployment projects available on the market, it is reasonably concluded that the high unemployment category will be the first of the reserved set-aside categories to go into backlog.
Currently, there are more visas than demand for the rural set-aside category, and virtually all of the 200 (2%) infrastructure set-aside visas are available. With such numbers staring at us, one would think that Indian and Chinese nationals should focus their attentions on rural projects over high unemployment to avoid possible visa delays (and that regional center rural projects receive priority processing).
However, investors should balance the speed of getting a green card with the strength of the project in terms of: 1) the development team, 2) the return on investment (ROI), 3) the return of initial capital investment, 4) the likelihood to complete the project, and 5) the creation of the required jobs, among other factors. Rural projects are not without risks, and it may be worth a slightly longer wait time for the right project.
In the end, who is most affected by potential backlogs of the set-aside categories?
It is important to note that for any potential EB-5 investor who is born in a country other than China or India – all categories of the EB-5 visas remain current. There are currently no predictions that these “rest of world” categories will become backlogged in FY 2024 or FY 2025 either. This means that those born in countries other than China or India do not need to be overly concerned about visa availability and are free to choose projects regardless of being in reserved or unreserved categories.
Those born in India and China do not have the same luxury as the rest of the world given the current visa backlog in the unreserved category. However, as discussed above, the reserved category Rural and High Unemployment set-aside categories remain current for Indian and Chinese nationals for now.
Indian and Chinese nationals should not get complacent, for though it appears Rural and High Unemployment set-asides will remain current through mid FY 2025 is welcome news, FY 2025 starts October 1, 2024 and therefore, we could be seeing backlogs in these two set-aside categories for Chinese and Indian nationals as early as Spring or Summer FY 2025 conservatively and as late as Fall FY 2025 (end of FY 2025).
Given the significant popularity of Rural and High Unemployment projects, it is only a matter of time until these set-aside categories are backlogged for Indian and Chinese national investors and therefore, we urge such investors not to wait!