What are Rural EB-5 Projects?
As per the New EB-5 Reform & Integrity Act of 2022 signed by President Biden on March 15 2022, there are a whole new set of rules for all new EB-5 Investments. You can read the changes here. Chief amongst the new rules is the change in the minimum investment limit to $800,000 USD for high unemployment areas and rural area projects. Although rural projects were also accorded TEA status in the past. The new rules have made some changes to the rural criteria making them more attractive to EB-5 investors compared to high unemployment areas (previously known as TEA) projects. So what are the advantages of investing in Rural EB-5 projects? Read below:
Visa set-asides for Rural EB-5 Projects
The new Act sets a visa quota of 20% of the annual EB-5 visas (green cards) exclusively reserved for EB-5 investors investing in rural areas of the United States. The term ‘rural area’ is defined as any area other than an area within a metropolitan statistical area or within the outer boundary of any city or town having a population of 20,000 or less.
Based on the average annual quota of 10,000 EB-5 green cards issued, 2000 of those will be issued to only investors of rural area projects. This creates a major advantage for Investors in rural projects especially from retrogressed/backlogged countries like China (and probably India and Vietnam in the future). If a Chinese investor invests in a non-rural EB-5 project today, his/her wait time will be over 10-15 years because of the China retrogression/backlog in EB-5. But if the same Chinese investor invests in a rural project today, their wait time will be essentially zero years because of the new set asides for rural projects. Of course, the wait time for rural projects can also increase in the future if more and more new Chinese investors invest in a rural project. But as of today, since this rule is just being implemented, there are no waiting lines. Indian and Vietnamese investors can also bypass future retrogression fears by investing now in a rural area project, thereby locking their place at the front of the queue for the rural visa set asides.
Priority processing for rural EB-5 projects
Apart from the visa set asides, there is yet another powerful incentive created by the Act to invest in a rural EB-5 project – Priority processing. The average EB-5 petition takes almost 2 years on average to get approved by USCIS. But the new law directs USCIS to process rural EB-5 investors petitions on a priority basis. The law doesn’t specify a time limit for the priority processing, but USCIS has previously processed expedited EB-5 petitions within 90 day to 180 days. We will have to wait and see how fast USCIS can process rural project petitions before we can give a concrete timeline on priority processing. Nonetheless, this will definitely speed up processing times for rural projects. Coupled with the new concurrent filing law, this is a huge advantage for rural EB-5 project investors.
Learn more about rural EB-5 Projects
Although the above are two major advantages of rural projects, the investor still has the same risks as any other EB-5 investment is concerned. There is still the risk of job creation and capital return. Investors will have to meticulously evaluate projects before investing in a project. We have currently evaluated a few rural projects and conducted on-site visits and due diligence checks on the project financials. Please send us an email at [email protected] or fill out the contact us form to learn more about evaluating rural EB-5 projects and for any clarifications about the new laws.