As we embark on 2025, interest in the EB-5 program is as high as it has been in years. The program has steadily regained momentum since the passage of the EB-5 Reform and Integrity Act of 2022 (RIA), which created new guardrails for the program and three set-aside visa categories that provided opportunities for countries facing lengthy backlogs.
Thank you for reading this post, don't forget to subscribe!A new year, however, can bring new challenges, trends and questions. With that in mind, what might prospective EB-5 investors be on the lookout for in 2025?
Potential Retrogression For Set-Aside Categories
Anyone that is familiar with Eb-5 will not be surprised that retrogression is on the table for certain countries in the rural and high unemployment set-aside categories. In December, the Department State issued a warning in its January Visa Bulletin that retrogression was likely to occur sometime in 2025.
When that might occur is not certain. Both the rural and high unemployment categories remained current in the February Visa Bulletin that was released this week. In its simplest terms, retrogression occurs when demand outpaces supply. The EB-5 visa category is allotted roughly 10,000 visas per fiscal year and those visas are divided among the reserved (set-aside) and unreserved categories. Within each category, countries are allotted a certain number of visas based upon their past EB-5 participation.
When retrogression occurs, it is country specific. The two most likely countries to experience retrogression in 2025 are China and India. When retrogression occurs, an EB-5 applicant will face a delay in obtaining their conditional green card after their I-526E is approved as they will have to wait for visas to become available again. Retrogression also impacts concurrent filing if a visa number is not available.
Which Trump Faction Will Prevail on Immigration?
It is often a fool’s errand to predict how any incoming administration will handle US immigration policies and operations. However, as the new administration get set to take charge on January 20, one thing is clear – there is plenty of tension in the air.
On one side, you have a group of tech CEOs and leaders such as Elon Musk that provided the incoming President with strong public support and heavy financial backing in the run-up to the 2024 election. After the election, this group came out publicly in strong support for immigration categories such as H-1B that bring highly skilled immigrants into the United States. Their companies rely heavily on highly skilled immigrants as a key part of their workforce.
This group is likely to look more favorably upon an investment visa program such as EB-5, as it also tends to bring skilled and successful individuals into the United States. However, the vocal support for highly skilled visa categories from Musk and others was quickly and loudly met with backlash from MAGA hardliners such as Steve Bannon and Stephen Miller. This faction has argued that large-scale immigration, whether legal or illegal, has a negative impact on the American workforce and the cultural fabric of the country.
While the EB-5 program is not going anywhere in 2025, the influence of individuals such as Miller led in part to increased I-526 and I-829 processing times as well as increased rates of Requests For Evidence (RFEs) and Notices of Intent to Deny (NOIDs) during the first Trump administration.
Only time will tell which side, or if any side, prevails in this public spat over immigration.
More Groups Marketing Projects Pre I-956F Approval
When the RIA was enacted, it required regional centers to file an I-956F (Application for Approval of an Investment in a Commercial Enterprise) for each project seeking EB-5 investments. The purpose of the I-956F filing is to ensure that projects are in compliance with USCIS standards as well as create more efficiency for I-526E petitions as USCIS should theoretically only be reviewing the investor’s documents.
During the first couple of years under the RIA, many groups chose to only market projects once they had received I-956F approval. From a marketing standpoint, a project that has an I-956F approval is more attractive than one that is waiting for approval.
However, as groups finish up their first, second or third round of post-RIA fundraising, many may not want to, or be in a position to wait six or more months for an I-956F approval before entering the marketplace. Regardless of whether a project approval or not, prospective investors will continue to want to perform careful due diligence into any project that they are considering.
