Recently, the EB-5 program has experienced a remarkable resurgence, capturing the attention of investors, developers, and immigration practitioners alike. The question that arises is, “What has led to this revitalization?” Within this article, we will discuss the three main factors that have caused EB-5 to return to the spotlight.
- EB-5 Reform and Integrity Act of 2022
The EB-5 program desperately needed reform and USCIS was finally able to deliver in the early part of 2022. Where there were many known changes to the EB-5 program, such as the investment amounts, there are also changes that are not nearly as evident or known. First of which was the new set asides, which requires a percentage of the annually allotted EB-5 visas for high unemployment and rural areas. These set asides have encouraged developments to reach areas most in need and have benefited both the developer and investors. There have many other changes like the hold period of investments in projects, the time to adjudicate applications, and clarity on gifts and loans for investors. All of these clarifications have made it easier for not only investors to understand the program but also for stakeholders like the attorneys, developers, and regional centers to help explain the program. By making it easier to participate in the program for all people involved, the program is much more attractive.
- Rising US Interest Rates
As the US interest rates have risen sharply over the last 18 months, the interest in EB-5 capital from developers across the US has increased dramatically. As EB-5 practitioners, there was a long period of time when the calls from developers and investors alike had fallen off dramatically. Developers in the US were able to take advantage of cheap capital (as low as 3% at times) so the need to go overseas to raise money was not a necessity. As interest rates started rising, the interest in EB-5 did the same. For developers, the ability to save 3-6% interest on multi-million dollar raises changes the capital stack and profitability of a project immediately. The savings are immense and the benefit to the developer cannot be ignored. At the same time, the increased instability in world markets has made these investments more attractive in the US for foreign investors. This is almost the perfect storm from a financial standpoint for both developers and investors. We have seen a sharp rise in the number of calls, and consultations, with both developers and investors. While there is no way to tell if this will last months or even years, now is a great time for developers and investors who are interested in EB-5 to seriously consider starting the process.
- Concurrent Filing
With the new regulations in place, USCIS has given investors from all over the world (especially from China and India) a bit of a lifeline if they are applying for EB-5 from the US in a rural or high unemployment area. If you are in the US and make a qualifying investment, these applicants can actually file their green card application (form I-485, I-765, and I-131) concurrently with their I-526 application. This allows the investor to obtain both their EAD (work authorization) and travel permit. As a result, investors who are on non-immigrant visas with a dual intent can work and travel freely and not have to wait on the I-526 to be adjudicated. This can save years on the process. In addition, because their I-485 is already submitted it will likely get adjudicated as soon as their I-526 is approved. This change has brought much more interest to the program as both Chinese and Indian investors, along with investors from all over the world who are in the US, can see little more light at the end of the EB-5 tunnel.
In conclusion, the resurgence of the EB-5 program can be attributed to a variety of factors that have transformed its appeal to both investors and developers. The 2022 EB-5 Reform, high interest rates, and the ability to concurrently file a green card application are the three main factors that have not only revitalized the EB-5 program but have also opened new opportunities for those interested in pursuing the American dream through this immigration investment pathway.
If you have any questions regarding the EB-5 process, please reach out to us at 972-650-6848 or rpatel@patellegal.com.