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Could Another EB-5 Visa Retrogression Be Around the Corner for Set-Aside Visas?

Immigrant investors from India, China, and Vietnam looking for U.S. citizenship often inquire about EB-5 retrogression. Retrogression caused when the demand for EB-5 visas from a given country exceeds the limited number of visas allotted to applicants from said country in a government fiscal year (October 1st – September 30th).

When a country is retrogressed, all existing applicants that have not yet received their conditional Green Card must wait until the next fiscal year to become eligible for their Green Card to be issued—even if they already have a I-526E (conditional Green Card) approval. Often times, retrogressions have ripple effects into subsequent years. If demand outstrips the number of visas issued for several consecutive years, one can see how the retrogression can quickly get out of hand thereby causing extended delays in receiving the Green Cards.

For reference, each country has a 7% cap on the total amount of EB-5 visas available for issuance to investors in a given fiscal year. As of the time of this writing in early 2023, the Visa Bulletin states that China and India are retrogressed in the unreserved EB-5 categories. Prior to the recent Reform and Integrity Act, there was only the unreserved EB-5 categories, therefore the backlog both countries are currently experiencing is due to legacy applicants in the previous EB-5 program. 

However, all countries including China and India are listed as “C” (Current) for the reserved/set-aside EB-5 visa categories which means they are not facing retrogression for rural, high-unemployment, and infrastructure projects. A “current” designation on the Visa Bulletin for an Indian/Chinese born investor means that they are eligible to receive their conditional Green Card if they already have an approved I-526E petition.

Matters are further complicated due to the fact that the Visa Bulletin does not show in real-time the current number of applicants in waiting.

The Visa Bulletin is only a snapshot. It states at the date of publishing whether or not visas are immediately available for each country. If there is a backlog, it shows at what date you must have applied (AKA your ‘priority date’) to be eligible to receive an EB-5 Visa. Such data can change drastically from month to month depending on how many visas were issued in the month prior. This creates problems for EB-5 petitioners trying to gauge how long it will take to receive their conditional Green Card as well as what category project they should invest in.

Below is an unfortunate example of how misleading the USCIS Visa Bulletin can be: In September of 2022, India was listed as ‘current’ for the unreserved EB-5 category.

Yet in October of 2022, Indian nationals were no longer considered to be “current” and would be retrogressed by three years.

How could this happen? The short answer is that many visas were issued to Indians from March 16th, 2022 (when the EB-5 program was re-authorized) through September 2022. By the time the quota for India born nationals was reached, the USCIS looked down and saw that the last person to get an interview date to go retrieve their Green Card applied on November 19th, 2019. Hence the reading on the bulletin for a final action date of November 19th, 2019.

If there is a lesson to learn from this, it is that investors must proceed with caution as a ‘Current’ designation on the Visa Bulletin does not necessarily mean that they are safe from a possible retrogression in the future.

To know whether or not you are safe from retrogression, you must be able to accurately estimate the following:

  1. The number of people from your country that have applied before you and have yet to receive their conditional Green Card
  2. The number of Visas available for applicants from your country

Calculating Approximate Visas to Be Granted in 2023

Every year, the EB-5 program sets aside predetermined percentages of the total allotted visas available in the EB-5 program, broken down as follows:

  • 20% rural
  • 10% high-unemployment
  • 2% infrastructure

If any set aside visas are unused, then they are allowed to carry over to the next year.

[1] Image Credit IIUSA

Due to COVID-19, there was a decrease in global mobility and closures of the U.S. consulates throughout 2022, so there were substantially more visas available for the Employment-Based (EB) categories in the 2022 fiscal year thanks to roll-overs from unused family-based immigration visas – this makes for a total of approximately 281,507 EB category visas. Per the original US Nationality and Immigration Act the the EB-5 program is allotted 7.1% of the total number of visas available to the EB visa categories. This allows one to deduce that the EB-5 program had 19,987 visas available in 2022.

Furthermore, since 6,396 (32%) reserved EB-5 visas were unused in 2022 they will rollover into the amount of reserved visas available for the EB-5 program in fiscal year 2023 thereby adding  to fiscal year 2023’s allocation of set aside visas. (Note that set asides went unused in 2022 thanks to the new RIA passing relatively late in the fiscal year therefore not giving the USCIS enough time to approve new set aside caegory EB5 investors and grant them visas before the end of fiscal year 2022).

A recent estimate from IIUSA states family-based immigration visas will return closer to their historical average in 2023 and therefore will leave less visas rolling over to the EB category in fiscal year 2023. Hence the approximate number of 200,000 EB Visas. Factoring in the rollover of unused reserved EB-5 visas from fiscal year 2022, it is expected that the EB-5 program will have 20,596 visas available for distribution in fiscal year 2023 with 10,940 visas available for the reserved categories.

Using the diagram above, here are the specific number of visas – not applicants – available per category in fiscal year 2023:

  • Rural projects – 6,837 visas
  • High unemployment projects – 3,419 visas
  • Infrastructure projects – 684 visas

Since the EB-5 program also grants visas to the immediate family members of each investor, it should be factored in that applicants on average have 2.5 dependents with them. Therefore, the real number of spaces for applicants should be divided by 2.5 to yield a more accurate estimate.

Here is the approximate total number of EB-5 investors for fiscal year 2023 (including 2022 rollovers):

  • Rural projects – 2,734 investors
  • High unemployment projects – 1,367 investors
  • Infrastructure projects – 273 investors

However, it is important to note that Charles Oppenheimer, visa consultant and former Chief of Immigrant Visa Control at the U.S. Dept. of State, previously stated that the 7% country cap will also pertain to set aside visas. So assuming that investors under the new RIA start to get I526E approvals and/or file for adjustment of status this year the max numbers per set aside category would be 191 investors in rural projects, 95 investors in high unemployment projects, and 19 investors in infrastructure projects on a per country basis before a backlog ensues. This being said there will be a new batch of set a side-visas in fiscal year 2024 that will help bolster the above stated amounts by another 1.3x respectively. Even still we are not talking about a lot of investors before a retrogression will set in.

Now, before one panics there are two important technicalities to note:

  1. Non-Indian/ Chinese investors do not need to worry about this pittance of set aside visas as they can still use unreserved visas (up to 7% of total unreserved) if the set asides have already been taken by their fellow countrymen.
  2. If set aside visas go unused by other countries, then China and India can go beyond their 7% quota of available set asides and use the remaining unused reserved visas. It is unlikely that there will be any leftover urban TEA set asides, but there could certainly be additional rural set asides left over assuming that the majority of the non-Indian and non-Chinese investors apply for urban TEA or unreserved category projects (which they will). This means that there will likely be even more rural investor slots in fiscal years 2023 and 2024 than previously stated. How many more is hard to say.

How to Avoid Being Retrogressed

After the reauthorization of the Regional Center program, the majority of regional centers resumed their previous high-unemployment EB-5 raises that they were working on prior to the program’s lapse in June of 2021. Given that the Visa Bulletin does not look forward in time, it’s likely that all of the high-unemployment visas set aside have already been accounted for by Chinese and Indian-born investors.

It’s very likely that within the next year or two, the Visa Bulletin will immediately change and show how India and China are “suddenly” retrogressed for this high-unemployment set-aside visa category. Therefore, the best way for immigrant investors to avoid facing extended delays caused by retrogression is to place their investment into a rural project.

As pointed out, rural projects have approximately double the amount of spaces for investors. Many of those spaces have not been accounted for as there are less rural projects in the market. It is therefore very likely rural EB-5 project invesors will not experience a backlog if they can file their application before the end of the year. Lastly, if/ when rural projects do experience retrogression in the future, the holdup will be eliminated more quickly than high-unemployment retrogression thanks to the rural category being designated with double the amount of set-aside visas. 

Selecting a rural project is certainly a promising way to bypass an additional 2-5 year waiting period. Even better, rural projects are granted priority-processing over all other EB-5 project categories.

In summary, unless Chinese or Indian investors plan on doing concurrent filing, we are advising clients from these two backlogged countries to not consider high unemployment TEA projects as that will not guarantee a speedy path to permanent residency status. Our current estimate for rural projects is that by the end of the year (December 2023) rural could also become backlogged (although more data is needed). We are therefore advising Chinese and Indian nationals to move forward with their I526E application in a rural EB-5 project before the end of 2023 to ensure an equitable immigration process.