EB-5 Immigrant Investor Program: Q&A on Rural Projects (Part 1)
Attorneys:Attorney Jeff Zhengquan Xie,Attorney Jiarui Yin,Attorney Qian Zhao,Attorney Haochun Ling, Xiao Xiang
In 2022, the U.S. Congress enacted new legislation governing the EB-5 Immigrant Investor Program, which effectively carved out additional visa slots for new investors. The newly established rural projects are one such measure to create these de facto additional slots.
Q: What exactly constitutes a "rural project"?
A: As the name suggests, a rural project is a project located in a rural area. It is a new investment priority introduced by the U.S. Congress under the EB-5 Reform and Integrity Act of 2022 (RIA). It is a product of the compromise between the urban and rural factions within the EB-5 industry.
Q: How can I determine whether an EB-5 project qualifies as a rural project?
A: A rural project is certainly located relatively far from major cities, but not all projects far from major cities qualify as EB-5 rural projects. The classification of a project as rural depends on whether the census tract where the project is situated is designated as rural. Due to the complexity and length constraints of this article, we cannot elaborate on the specifics here. The simplest way is to review the project’s Private Placement Memorandum (PPM) and the economist’s report for the project.
Q: How many EB-5 visa slots are allocated to rural projects in total?
A: The new RIA legislation reserves 20% of the annual EB-5 visa quota for rural projects, which amounts to 2,000 visa slots per year.
Q: Can we say that rural projects have added over 2,000 new EB-5 visa slots?
A: No. These 2,000 visa slots for rural projects are carved out from the original total annual EB-5 quota of 10,000.
Q: Does this put existing EB-5 applicants who filed their petitions earlier and are still waiting for visas at a disadvantage?
A: Absolutely.
Q: Could you specify what these disadvantages are?
A: Consider this: the total EB-5 visa quota is only 10,000, which was already insufficient to meet the demand from applicants already in the waiting line. Now that 2,000 slots are earmarked for rural projects, the number of visas available to the original pool of applicants is reduced. As a result, the waiting time for applicants who invested and filed their petitions earlier will become even longer.
Q: This seems highly unfair to legacy investors! Are there any countermeasures they can take?
A: Other than continuing to wait, their only option is to file a new EB-5 petition.
Q: What does "filing a new EB-5 petition" mean?
A: It means starting the EB-5 application process from scratch, with the only difference being that the new investment is made in a rural project.
Q: Why go through all this trouble?
A: The reason is that rural projects currently have dedicated visa slots available. Eligible applicants can immediately submit all required forms for their green card application through Dual Filing. Within a few months, they can obtain work authorization and advance parole, allowing them to live, work, and travel in the U.S. long-term. This is the biggest advantage of rural projects at present.
Q: What is the minimum investment amount required for a rural project?
A: The minimum investment is $800,000.
Q: I invested $500,000 in an EB-5 project a few years ago and am still waiting in the visa queue. Can I make an additional investment of $300,000 (totaling $800,000) to participate in a new EB-5 rural project?
A: No, you cannot.
Q: But the project I invested $500,000 in a few years ago is now classified as a rural project. If I top up my investment by $300,000 to reach the $800,000 threshold, can I still enjoy the benefits of the new EB-5 rural project policy?
A: It is extremely difficult. This would only be possible if the project developer revises the original project documents and requirements to comply with the new RIA rules. For example, the developer could require all legacy investors in the project to make an additional investment of $300,000, or split the project into two separate components: one requiring a $500,000 investment and the other an $800,000 investment.
Q: I see. But I don’t want to invest another $800,000 for immigration status—it’s too costly. I have an idea: can I withdraw my $500,000 from the current project, add another $300,000, and reinvest the total $800,000 in a rural project?
A: Theoretically, yes. You would need to contact your current project developer to inquire about the possibility of withdrawing your $500,000 investment. If withdrawal is permitted, you can reinvest the full $800,000 in an existing rural project and avail yourself of the immigration benefits offered by the current rural project policy.
Dear readers, if you have any other questions about EB-5 rural projects, please leave your comments below this article. We will address them in subsequent installments.
The above overview is prepared by XIE LAW OFFICES,LLC. to provide legal information to the Chinese community. It is primarily for academic discussion purposes and does not constitute legal advice on specific cases. If you already have legal representation, please consult your own attorney, who is familiar with the details of your case. Clients of Xie & Associates Law Firm, as well as readers who have not yet retained legal counsel, may contact Attorney Xie for specific legal questions. If you wish to reprint this document, please do so in full without any deletions, and clearly indicate the source.
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