EB-5 Visa Retrogression: For Indian Investors

Written by Dheer Ved (dheer.ved@xumitcapital.com)

India into EB-5 Visa Retrogression

EB-5 visas are allocated on a fixed annual basis and when they are depleted, a “backlog” or “visa retrogression” occurs. This list is published monthly by the Department of State in the form of a Visa bulletin.

The U.S. Department of State released the Visa Bulletin for October 2022, which has put EB-5 Indian nationals into a visa backlog for the second time with a cut-off date of 8 Nov, 2019. This means that I-526 petitions filed on or after 8 Nov, 2019 or pre-RIA investors will be placed in the waiting list. In simple words, demand exceeds supply, that is, the number of applications United States Citizenship and Immigration Services (USCIS) has received exceeds the number of visas available. It is too early to tell how long this retrogression is going to be for Pre-RIA Indian investors.

Now let’s understand what a Visa Bulletin is?

Visa Bulletin is a monthly publication issued by the state department listing all the categories of immigrant visas and when green cards become available for each category and to see how the dates are progressing and it lets you see where you are in the line for green card.

Important terms to understand in visa bulletin:

The monthly visa bulletin shows 2 charts:

(A). FINAL ACTION DATES FOR EMPLOYMENT-BASED PREFERENCE CASES

On the chart below, the listing of a date for any class indicates that the class is oversubscribed. “C” means current, i.e., numbers are authorized for issuance to all qualified applicants; and “U” means unauthorized, i.e., numbers are not authorized for issuance. (NOTE: Numbers are authorized for issuance only for applicants whose priority date is earlier than the final action date listed below.)

Final Action Dates

(B). DATES FOR FILING OF EMPLOYMENT-BASED VISA APPLICATIONS

The chart below reflects dates for filing visa applications within a timeframe justifying immediate action in the application process. Applicants for immigrant visas who have a priority date earlier than the application date in the chart may assemble and submit required documents to the Department of State’s National Visa Center, following receipt of notification from the National Visa Center containing detailed instructions. The application date for an oversubscribed category is the priority date of the first applicant who cannot submit documentation to the National Visa Center for an immigrant visa. If a category is designated “current,” all applicants in the relevant category may file, regardless of priority date.

The “C” listing indicates that the category is current, and that applications may be filed regardless of the applicant’s priority date. The listing of a date for any category indicates that only applicants with a priority date which is earlier than the listed date may file their application.

Dates of Filing

Indian EB-5 investors are subject to a final action date of November 8, 2019, as per the October 2022 Visa Bulletin. This indicates that the only investors who are qualified to acquire EB-5 visas are those who submitted their I-526 petitions prior to that date. All investors who submitted Forms I-526 or I-526E after November 8, 2019, must wait until the Department Of State moves forward with the final action date.

Visa Annual Allotment

There are 140,000 employment based visas available each year. EB-5 immigrant visa gets approximately 10,000 visas each fiscal year (October — September). And only 7% of EB-5 visas are available to each country i.e. a per-country limit of 700 typically applies, although the visas left over, or those that have not been taken up by countries for which demand is low, are assigned to countries with higher demand at the end of each fiscal year. When the number of applications exceeds the number of visas available, the government sets a cut-off date, a process known as “visa retrogression”.

EB-5 list four categories for investment namely:

The EB-5 Reform and Integrity Act, 2022(RIA) introduced 3 new visa categories which accounts for 32% of the total EB-5 visa pool for the investors. Rural Areas have 20% (2,000) of the total visas reserved, High Unemployment Area (often referred to as Targeted Employment Area) have 10% (1,000) of the total visas reserved and Infrastructure Projects have 2% (200) visas reserved. One important thing to note is that the 7% annual country cap is also applicable to the set aside categories. For example: 7% annual cap for the country means India is allotted 700 visas for the fiscal year and 32% is set aside which means only 224 visas are available for the set aside category.

The best suitable options for the Indian EB-5 investors are rural and high unemployment areas who are interested in the set aside category while infrastructure projects only account for 2% of the EB-5 visa pool which is less known among the Indian investors. EB-5 investors who file after March 2022 or Post RIA have no visa retrogression, have no visa backlog for reserved categories even for EB-5 investors born in India.

More or less 95% of the EB-5 projects are in the High Unemployment Areas reflecting the popularity among the EB-5 investors. This suggests that the limited supply of TEA set-aside visas for high-unemployment areas will be exhausted quickly, and this category may become oversubscribed in the coming months. These visas are limited in supply so we could see the State Department publishing the cut off dates in the near future.

The safest and the best option for the EB-5 investor is to take on the Rural TEA projects which accounts for 20% of the visas available. It indicates a safer path to avoid visa retrogression for the EB-5 investors.

Key takeaways for Indian EB-5 investors considering EB-5 investment at $800k:

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Xumit Capital is a boutique investment advisory firm that deals in equity, global & crypto portfolios and investment migration programs.