With India facing retrogression in the EB-5 visa category, too, investors need to plan in advance to ensure children do not ‘age-out’ of the visa program.
The EB-5 visa or the employment based fifth-preference category of visa, which was introduced in the 1990s provides an opportunity for eligible immigrant investors to acquire green cards. While many see it as the fastest way to get a green card, provided one has resources to invest in the United States, with anti-immigrant sentiments rising in the country, the EB-5 program has also seen significant changes.
There had been anticipation in the investors’ community about possible changes to the program for a while. And when those changes were announced last week, there was bound to be some anxiety and unrest amongst those who were hoping to go through that route to attain permanent residency in the US.
According to the new regulations, the price of an EB-5 visa will jump to $900,000 effective November 21, 2019. The amount was fixed at $500,000 since the program’s inception. This is the figure for investments inside a Targeted Employment Area (TEA).
The minimum investment requirement rises to $1.8 million from $1 million outside of these areas.
The new regulations also tighten restrictions on what qualifies for a TEA by moving responsibility for determining this from individual states to the DHS.
This definitely means more scrutiny and more investment requirement.
How are the new rules going to affect Indian investors?
“For Indians seeking the EB-5 visa for better education and job prospects for their children, the increase merely implies a higher initial investment with the assured benefits of a fast-track green card in the future,” says Vivek Tandon, a lawyer and investment banker who advises EB-5 investors. “However, considering India has hit visa retrogression, such investors must plan their applications to ensure their children do not ‘age-out’ before the green card is issued.”
With Indian nationals already got caught in huge backlogs and waiting time in various visa categories, would this mean that the short investment route, for those who can afford it also has become more difficult?
“Those Indians living in the US with pending EB-category green card applications and seeking a faster route to the green card may find it tougher to switch to the EB-5 route,” says Tandon.
With an increased scrutiny and a record-breaking number of RFEs and denials being faced by employment-based visa applicants, there seems to be an increase in vigilance now for the EB-5 category too. Tandon, who also heads EB5 BRICS, a EB5 firm with offices in India and US explains: “Another change that is as significant as the investment hike is that only the DHS can designate targeted employment areas. With stricter implementation of rules related to TEAs, projects that used to qualify for the $500,000 investment requirement may end up in the $1.8 million investment category.”
Indians, who prefer investing in Regional Center TEA projects in urban areas, may find this option closed and may face a 260 percent effective increase in the investment requirement. “There is likely to be a surge in filings until November 21, which means those applying later may face a longer wait for the green card,” Tandon adds.