By Anayat Durrani
With the passage of the EB-5 Reform and Integrity Act of 2022, the EB-5 program in the visa bulletin is now grouped into four categories: unreserved, rural set aside, high unemployment set aside, and infrastructure set aside. The infrastructure projects category is new to the EB-5 industry and is one that has left many EB-5 stakeholders seeking more guidance on what projects qualify.
“The RIA made some significant changes to the EB-5 program. One of them was adding an infrastructure category to allow for a lower amount of investment by EB-5 investors,” says Roy Carrasquillo, managing shareholderof Carrasquillo Law Group PC. “While it is specified in the visa bulletin, there is still some ambiguity about what projects are eligible under this category.”
He says one of the main gray areas that needs further clarification is whether only government-sponsored projects are included or if privately-funded infrastructure projects are also eligible for investment under the infrastructure projects category.
“Furthermore, investors and project developers have been seeking clarification about whether government sponsorship is a requirement for qualifying infrastructure projects under the EB-5 program,” says Carrasquillo. “As of now, there is no clear guidance from the USCIS on this matter, which has contributed to the uncertainty surrounding this category.”
EB-5 visa set aside categories in the visa bulletin
Visa set asides are a new category of reserved visas under the EB-5 Immigrant Investor Program created with the passage of the RIA in March 2022. The RIA requires the U.S. government to set aside 20% of the total number of available visas for applicants who invest in rural areas, another 10% for those who invest in high unemployment areas, and 2% for those who invest in infrastructure projects.
“The main reason this category has not been fully elucidated is because it is fairly new,” says Chad Graham, executive partner at Graham Adair. “A lot of times with new legislation, it takes a while for cases to make their way through the vetting process where governing bodies make decisions, which gives additional guidance on policy and best practices.”
Graham says as infrastructure projects start to get approved, stakeholders will get a better sense of which types of projects fit the program.
“The thing people probably don’t want to talk as much about are the projects that will be denied,” says Graham. “We tend to learn more from denials than from approvals, which is not comforting to the initial investors under the infrastructure category.”
The importance of further guidance from USCIS about EB-5 infrastructure projects
Carrasquillo says considering the complexity of infrastructure projects and the magnitude of their impact, he says it’s important for foreign investors and the US government to have a clear understanding of the EB-5 infrastructure investment options available.
“A well-defined and structured infrastructure category could provide a significant boost to infrastructure development projects across the United States, creating jobs and supporting economic growth,” says Carrasquillo. “It is essential for the USCIS to provide further guidance and clarity on the infrastructure category under the EB-5 program to allow these investments to materialize.”
Carrasquillo believes the infrastructure category is a promising investment option for foreign investors. However, he says due to the ambiguity surrounding eligible projects and whether government sponsorship is a requirement, more guidance is needed by the USCIS.
“My advice to early investors would be, yes, stick with government-sponsored projects especially early on,” says Graham. “This seems to be the aim of the program: to improve public infrastructure, which mostly falls within the purview of the government. I would advise against testing the boundaries early on.”
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