Those interested in an EB-5 visa should prepare an application at the earliest to maximise the chances of locking at the current rate, says Mark Davies
For the first time since its inception, the EB-5 Program is expected to increase in price on November 21, 2019. After a lengthy period of rumour and uncertainty, the US Government has confirmed that the new minimum investment level for EB-5 will be $9,00,000.While there are many avenues the industry may look at to delay or alter these changes, there will certainly be a wave of increased in I-526 filings over the next four months throughout the world. This is especially true for India, as not only is there an impending price increase, but the visa wait time for Indians is also growing. In spite of the changes, the EB-5 visa remains one of the fastest and most straightforward routes to a Green Card.
Investors seeking to lock in the current $5,00,000 price should consider acting soon if they are sensitive to the new potential price increase. It takes a US immigration attorney an average of two months to document the source of funds for Indian EB-5 applicants, which narrows the window of time available.
It’s also important to remember that selecting the right Regional Center with a history of protecting their investors is of utmost importance. Although many investors will be eager to file their applications as soon as possible, it is still essential to conduct thorough due diligence.
There is a particular sense of urgency in India where retrogression delays were announced last month. Anyone interested in an EB-5 visa should prepare an application as soon as possible to maximise the chances of locking in the current rate.
The exact length of the retrogression delay remains unclear, but we suspect this to be beyond four years, although pending legislation could bring some respite. Demand for EB-5 has skyrocketed in India in a very short space of time, and the country reached its annual quota of 700 EB-5 visas in June, more than three months before the visa year ends.
The 80% increase in the price is less significant than the industry had been expecting. The original plan was to increase the price to $1.35 million to take full account of inflation since the programme started in the 1990s. In the end, however, the lower $9,00,000 figure was chosen in order to maintain the differential between the price of an investmentplaced in an area of high unemployment and an investment outside of these so-called Targeted Employment Areas (TEAs).
The minimum investment made outside of a TEA is set to increase to $1.8 million from $1 million in November, and the definition of what constitutes a TEA is likely to get stricter.
The new rules switch jurisdiction over who can determine the geography of a TEA to the Department of Homeland Security from individual states, which had, in some instances, been gerrymandering to allow EB-5 investments to flow to wealthy areas with robust employment. As a result, it is important to work with a Regional Center with a project that would qualify under stricter TEA rules so as to avoid facing the possibility of paying $1.8 million.
The combination of retrogression and a fee hike is likely to cause a rush to file in India over the next few months. This means the queue is only likely to get longer. There is a possibility that the annual country quota might be doubled to 1,500 visas, which would serve to halve the waiting times.
For Indian investors who need to be in the United States sooner, there are other options for living and working in the United States on a non-immigrant visa while on the EB-5 waiting list for permanent residency. This includes opening a new branch of your existing Indian business in the United States or moving there to own and operate a franchise business. Consult with an immigration attorney to understand all the pathways open to you.
For those who can afford to wait a little longer and afford the higher price tag, it might be less stressful to wait until after November when demand normalises again. For example, families considering EB-5 as a route to a US education for younger children may have more time depending upon the children’s ages.