The EB-5 Program: New and Improved
10 May 2023 | Applicable law: Hong Kong, US | 5 minute read
The EB-5 Immigrant Investor Program (EB-5) is a highly popular pathway for foreign investors to gain U.S. permanent residency (Green Card). While the program has been in existence since 1990, it previously struggled with systemic problems, including remaining a “pilot” program that required constant approval by Congress. It also increasingly became unattractive for individuals born in Mainland China due to a significant backlog.
Thankfully, however, last spring, the US Congress clearly addressed these issues by enacting the EB-5 Reform and Integrity Act of 2022, which has (1) renewed the program until September 2027; (2) set aside a portion of each year’s quota of 10,000 EB-5 green cards – regardless of country of birth – for specific projects/areas; and (3) allowed those already in the US in lawful non-immigrant status to concurrently file to adjust their status to lawful permanent resident.
The new EB-5 program has a number of important changes:
- Investment amount. The current the minimum investment amount is US$1,050,000, but US$800,000 for investments in certain targeted employment areas (TEAs). The minimum investment amounts used to be US$1,000,000 and US$500,000, respectively.
- Reserved visas. 32% of the annual EB-5 immigrant visa quota of 10,000 are set aside for specific types of EB-5 projects, including 20% for investments in US rural areas, 10% for high unemployment areas, and 2% for qualifying infrastructure projects. As of the date of this article, there is no back log for Mainland-born Chinese nationals in these set aside visas.
- Adjustment of status. Most individuals in the US in lawful nonimmigrant status can now file an Application to Adjust Status to Permanent Resident (AOS) concurrently with an EB-5 petition. Previously one had to wait until an EB-5 petition was approved, which is typically more than 2 years, before being eligible to file an application to adjust status.
Strategies for Asian investors
- Get the timing right. The US issues 10,000 EB-5 visas each year. Given excessive demand on an annual basis and statutory country quotas, the US is forced create a backlog waiting list (retrogression). Retrogression affects applicants born in places such as Mainland China, India, and Vietnam. However, given the "set aside visas" under the new program, there are ways to potentially mitigate or eliminate the standard wait time by choosing qualifying investment projects.
- Concurrent filing. EB-5 applicants in the US now have the ability to apply to file for AOS. This can be hugely beneficial, for example, to an F-1 student studying the US. While studying in the US, a student can concurrently file for EB-5 and continue studying in the US while awaiting EB-5 approval. During that waiting period, the student can also apply for an employment authorization document (EAD) to be eligible to work for any US employer. This has proven to be very popular as it was not previously possible.
- Relevance to Hong Kong? Place of birth can sometimes create added delays during the EB-5 process. However, as of today, a Hong Kong place of birth remains a separate category from a "China-mainland born" person. Therefore, even without using the "reserved visa" option, the EB-5 path for a Hong Kong-born person can be a relatively fast option to the US.
US immigration laws provide many opportunities to those wishing to permanently or temporarily settle in America. The updated EB-5 rules are quite attractive and should be considered as a serious option. When analyzing these questions, it is important to make an informed and optimal decision.
This article was first published in The American Chamber of Commerce.