Understanding the new EB-5 rural and set-aside visas, with Christian Triantaphyllis
This year, the USCIS reserved 20% of EB-5 visas for investors that put their money into rural areas, 10% for investing in projects in high-unemployment areas and 2% towards infrastructure projects. What are the guidelines for projects in these rural and high-unemployment areas? Which investors will benefit most from this? Christian Triantaphyllis, lead attorney in Jackson Walker's Investment Immigration practice, chats with Ali Jahangiri and provides an in-depth review of the changes to the EB-5 visa categories.
UPDATE: Our guest mentioned the retrogressed date for Indian EB-5 visas was October 2019. The correct date is December 2019.
Christian: You would definitely wanna invest in a TEA project, not only for the lower investment amount, but it's not backlogged right now. The only way you're backlogged is if you're investing in a non-TEA project right now. And why is that, Ali? Because both of those categories have those set-aside visas reserved for them, the 20% and the 10%. Basically, the government's protecting for those investors going forward. And eventually, those new investors will use up those set-asides, and there will be some kind of backlog created. But for the time being, they haven't been used up because they're brand new.
Ali: This is the “Voice of EB-5”, by EB5investors Magazine. Each week, we sit down with experts in the EB-5 investment space to get valuable insights and the latest EB-5 news. Hi, everyone. Welcome back to the "Voice of EB5." Lucky here we're sitting by a good friend and lawyer, Christian Triantaphyllis. He's been in the business for about 10 years. He's an immigration attorney, but he does also a lot of representation for regional centers and developers.
He's a partner at a firm called Jackson Walker LLP, and he specializes in I-526 and I-829s for direct investors and regional centers. He's based in Houston. Christian is also Chair of the Investment Immigration practice at Jackson Walker. He was a Top 25 Immigration Attorney for "EB-5 Investors Magazine" between the years of 2017 and 2019, and he was a Top EB-5 Rising Star in 2016. Christian, welcome to the "Voice of EB5."
Christian: Ali, thanks for having me. Appreciate it.
Ali: Before I get into the questions, I'd like to just ask you about, what's the reasoning why you got into immigration? What was the draw from law school to get into immigration?
Christian: Yeah, happy to talk a little bit about that. So, I had experience working at corporate law firms in the past. And going into law school, I wanted to do something International. And I wound up taking an immigration law class, and my professor had worked at a large corporate law firm in the business immigration practice of that firm. I'm also the son of an immigrant and a former Peace Corps volunteer, and all those influences together caused me to explore further the idea of becoming a business immigration lawyer. And that's what I did.
Ali: That's awesome. So your background is actually from the Greek, the Spartans, right?
Christian: That's right. My dad would tell you that he's not really an immigrant, he just planned on coming over to the U.S. to go to university and return to his home country and live his life there. But fate said otherwise, and he's still here many, many years later. And we do go back to Greece fairly often to visit family there as well.
Ali: Good. It's always good to connect with the immigrants like me. I'm an immigrant, too, so it's great to be in that pool of people. So, as a background on this podcast itself, for the "Voice of EB5," we wanna focus on the rural set-aside. Christian, can you talk about maybe some background on how the rural set-aside came about, and really what that really meant?
Christian: I could do that. So, in the past, prior to the new legislation that was passed in March of 2022, we always had this idea of taking advantage of rural areas. And the idea was that you could qualify for the lower EB-5 investment amount by investing in a rural area, that is, an area outside of a metropolitan statistical area and a town with under 20,000 people. But in the past, that's all it did. It allowed you to invest the lower amount, but so did investing in a high-unemployment area in an urban setting. So in either scenario, you can invest the lower amount of EB-5 investment.
When the new rules were passed, when the new legislation was passed, Congress took it a step further, and they said, "If you invest in a rural area, not only can you invest a lower amount, which is $800,000, but we're also gonna give you access to what's called priority processing, which is theoretically going to speed up each immigrant investor's immigration process, and we're going to put you into the pool of this reserved visas.
Twenty percent of the overall 10,000 EB-5 visas that are granted each year are gonna be reserved for those who invested in rural areas." And so that creates an advantage, too, because if someone's investing in a rural area, not only might you get your I-526 petition, your EB-5 petition approved faster under the priority processing, but you should always also get access to that 20% set of reserved visas, while the rest of the pool of EB-5 investors are all going into the overall pool.
So this turns into an advantage, a significant advantage for countries that have historically oversubscribed or taken up more than their share of allotted EB-5 visas, which then creates a backlog, a bottleneck of those visas being issued to investors from that country. So that we typically think of China, Vietnam, and, on occasion, India in the EB-5 world, those countries that have oversubscribed or created a backlog of EB-5 visas being issued to them.
But with this reserved visa access under the rural category, basically, Congress and now USCIS has said, "If you invest in a rural project, you have first dibs on this 20% set of visas going forward." So someone from China or Vietnam or India is gonna have access to those visas when their I-526 petition is approved. And, eventually, it's gonna be very popular. It already has become very popular to invest in a rural area to try to get access to these set-aside visas. And, eventually, so many of those will be taken up by certain countries that they will also backlog. But for the time being, they're not backlogged and they're available on a first-come, first-served basis.
Ali: So, let me understand that. So, is it the fact that they get their 526, they get their conditional...? How does the backlog work? Is it for the Green Card, the 829 approval, or is it for the 526, for the...?
Christian: Right. Good question. So, the backlog is not gonna affect how many people are filing I-526 petitions or I-829 petitions, the backlog affects who gets to go to the U.S. Embassy or consular post or file to request a Green Card here in the United States once the I-526 petition is approved. Who's gonna be issued that Green Card? So the backlog limits the number of people from each country from getting the EB-5 Green Card based on an I-526 being approved if that certain nationality is over-subscribing, it's using up their allotment of the EB-5 visas, which is 7%.
So, a certain country becomes very involved in EB-5, you could have 1,000, 2,000, 3,000, 4,000, however many I-526 petitions filed each year from that country, but the number of EB-5 Green Cards issued will be limited by this backlog because they're gonna start using more than their 7% annualized allowance of the overall 10,000 EB-5 visas that are given out each year.
Ali: So, in a practical world, call me a Vietnamese investor right now, would I wanna invest in rural deal or a TEA deal? Or, does it not make a difference right now?
Christian: So, right now, both rural and high-unemployment TEA have their reserved visas available to a Vietnamese investor because rural gets 20% set-aside visas of the overall 10,000 and high unemployment gets 10%. And because those categories were created in March earlier this year, those set-aside visas have not been used up yet, right? Because I-526 petitions have been filed, but they haven't been approved yet, and people have not been issued those EB-5 visas or Green Cards under those reserved categories.
So for right now, somebody from Vietnam could pursue their EB-5 visa and wind up as a Green Card holder under the rural category or the high-unemployment category. Now, rural has a little more leeway though, right, because it has 20% as compared to 10%. So we may see that the urban and high unemployment will be used up faster in terms of the number of EB-5 visas that can be granted than rural because their 10% is less than 20%.
Ali: But at this point, Christian, it doesn't matter, as a Vietnamese investor, if I file a petition under a rural project or under a TEA. It's the same difference right now, correct?
Christian: That's right. They're both current. Neither one is backlogged.
Ali: So, let's take the question one step further, Christian. So, imagine I'm from India, and I believe India just started backlogging, correct?
Christian: So, India have just started backlogging, that's right, but they are backlogged for people who filed before these reserved set-aside visas were available. So if you filed your I-526 petition prior to March 2022, you're part of the old regime where you did not have these 20% or 10% set-aside visas available. They are sort of in a different bucket than the individual who might file today under a TEA, such as rural or high unemployment if that makes sense. They're in the big pool.
Ali: Imagine I'm in India right now, you know, we have an event there coming up in November, we're all gonna go there, and this question is gonna come up, and it's gonna be, "What should I choose right now, a rural project or a TEA project? And does that make a difference for my immigration?" What would tell an Indian investor, you know, call it November when they're asking this question?
Christian: Sure. Under the new legislation and the new program, both our current, and by current I mean not backlogged under the EB-5 Visa Bulletin, all right, so both of them are immediately available. If you have your I-526 petition approved today, if you filed today and got it approved tomorrow, you could request your EB-5 visa under rural TEA or high-unemployment TEA under the new EB-5 legislation.
However, there are some other factors to consider whether you're from India or Vietnam. If you wanna be part of the larger 20% set-asides, then you'll pursue rural. If you wanna try to get access to priority processing, which is going to be faster processing, I don't know when we'll see USCIS start acting on that. But if you wanna be part of priority processing, then you'll pursue rural.
If you say, "Look, I don't need that, I just wanna make sure that I try to get access to the set-aside visas. I don't want my wait to be compounded by lots and lots of backlog," right now it'd be the time... "And I wanna invest in a city, an area that I'm familiar with," well, then, invest in a high-unemployment TEA project because the backlog is not affecting those petitions right now for anyone who decides to invest and file today. You got to weigh your interests.
Ali: So, right now I'm an Indian investor. Do you recommend that I look for a rural project or just a regular TEA project?
Christian: Well, first, I would say you would definitely wanna invest in a TEA project, not only for the lower investment amount, but it's not backlogged right now. So neither one is backlogged right now. The only way you're backlogged is if you're investing in a non-TEA project right now. And why is that, Ali, because both of those categories have those set-aside visas reserved for them, the 20% and the 10%.
Basically, the government's protecting for those investors going forward. And eventually, those new investors will use up those set-asides, and there will be some kind of backlog created. But for the time being, they haven't been used up because they're brand new. But, of course, non-TEA, that's been around since 1990. So it's just part of the big overall pool that everyone was subjected to in terms of the visa issuances prior to March of 2022.
Ali: So, non-TEA for India is backlogged, but TEA for India is not backlogged, correct?
Christian: That's right.
Ali: Okay. So, if I'm in India right now, it makes no difference if I choose a rural deal or a TEA deal. There is no backlog, correct?
Christian: That's right, because they both have access to the reserved visas. They're not taken up yet. And you just have to think through, "Do I wanna be part of the 20% rural set-aside or the 10% high unemployment set aside?"
Ali: Got it. So there's a 10% high unemployment set aside, and right now that hasn't been backlogged yet for India, correct?
Christian: That's right, because that set aside was only recently created in March, just like the rural set aside was recently created in March.
Ali: Okay, so there's a new 10% set aside for TEAs as well. And that is the distinction that I think is good to bring home here, and that's why the Indian folks are not retrogressed yet, is because of that 10% set aside for TEA, correct?
Christian: Yeah, that's right. They've got the 10% available to them and the 20% available to them. Now, Indian investors who invested prior to March of 2022, none of this existed yet. These reserved set-asides, that didn't exist yet. Yes, there were targeted unemployment categories like high unemployment and rural, but they were not specifically granted any kind of set-aside visas.
So, it was just part of the overall pool of EB-5 visas granted each year that everyone was just a part of. So when India retrogressed, well, will be retrogressed in October, that's for individuals who are filed prior to March of 2022 being subjected to that retrogressed date of October 2019. And then people who invest in non-set-aside visa categories going forward, which is non-TEA, that's the only one that doesn't have the set-aside.
Ali: Okay, so now you've really clarified this. So let's just now switch tracks to China. Back in the day, four years ago, when we were filing the petitions, China had retrogressed, I believe, 8, 9, up to 10 years. Is that correct?
Christian: Yes. May be even more, but that's right.
Ali: So, with all that retrogressions, did we catch up over the last four years with the Chinese applications? Is that why they're now current?
Christian: So, China, it hasn't caught up. That backlog that you refer to, it still exists. But that's for people who filed up until March of 2022. It's the same analysis. So they're all part of the same pool of EB-5 visas that was available to them in the past. But now, a Chinese investor who wants to file under the rural 20% reserves set-aside visas or the high unemployment 10% reserves set-aside visas that were recently created in March, they have access to those set-aside visas just like anyone else who wants to file today. So that person would not be subjected to the long backlog that the other Chinese investors are still subject to.
Ali: So, that eight-year wait or the seven-year wait, how much have we chipped away from that, well, Chinese wait that existed?
Christian: It's still very significant right now. Only those who filed prior to January of 2016 can get their EB-5 visa if they have their I-526 petition approved. So think of all those investors who filed after that date who are gonna be waiting for years until getting their Green Card.
Ali: So there's a fact pattern now that if I would have filed in 2016 in China or 2017, and I got put on this backlog of eight years, and I'm still waiting right now, there's a situation where a new Chinese investor can come in under the rural program and immediately get in that five-year wait, whereas someone who filed four years ago is still waiting because they're in that eight-year wait.
Christian: That's right. Because a new investor can invest in a rural project, file a I-526. And when the I-526 is approved, they can get access to the 20% set-aside visas that are currently available while the investor who filed prior to the establishment of the set-aside visas does not have access to them.
Ali: So how about the 10% set-aside that was created by the legislation? Does that affect the Chinese as well that currently apply?
Christian: Yes, they have access to those just like everyone else. No backlog there, either.
Ali: So if you're Chinese, you can either do a TEA or a rural. And as of today, nothing's been retrogressed and you're in line to get your application in timely fashion, which is, I'm guessing, you can get the whole thing done within what, five years is it?
Christian: Yeah, I-526 is approved and hopefully back to normal processing times. And then you can go get your EB-5 visa at the consulate through the National Visa Center and come into the country as a conditional Green Card holder for two years. Could be done in a matter of five years or so.
Ali: So, that seems unfair to the investors that were from China in 2016 and 2017, isn't it? They've been waiting so long and now a new investor comes along and files.
Christian: I agree, it's unfortunate for those investors, for sure. I think the idea was when this legislation was created in March, Congress wanted to encourage investors to invest in rural projects, and they did that by creating this priority processing idea and set the reserved set-aside visas at 20%. And then they also said, "Look, we're gonna limit how you create a high-unemployment area, you know, in a city. You can't just call it together, this number of census tracts."
So, now that projects are limited on the number of census tracts they can put together to qualify as a high unemployment, there are going to be specific areas in cities that need more investment, need this kind of job creation that are taking advantage of the program because they qualify at the lower investment amount of $800,000. So I think Congress wanted to give them an advantage, too, so this 10% was set up.
In the past when investing in a targeted employment area, okay, yes, rural was rural, but high-unemployment TEA in an urban area was not necessarily a blighted area, right, because of the many, many census tracts that would be put together to qualify for high unemployment. So perhaps Congress is saying, "Well, now that we're kind of limiting who can qualify as high unemployment in a city, we want those investors to get an advantage as well."
Ali: So, obviously, this "Voice of EB5" is dedicated for the set-aside discussion, which is probably one of the top topics. The most frequently asked is about the set-asides. So it's really helpful, Christian, to really, really dig into this because if it's confusing to me, then it's most likely confusing to everybody.
Christian: I'm trying to articulate this in a way that makes sense to you, make sense to people listening, and make sure that what I'm saying makes sense. So there's a lot of moving parts to this.
Ali: Yeah, but, in a summary, obviously, this podcast is dedicated for the rural set-asides to you, and I think a lot of the listeners are gonna wanna delve into these questions. But I'm gonna take it one step further now and talk about the difference of, does this have anything to do with the conditional I-526 petition so that you can get your consular processing and come to the United States? Does it have anything to do with coming to the U.S., or is this merely an approval for the actual Green Cards?
Christian: So, all this set-aside visa talk does not really affect the filing of the I-526 petition. And, for now, it doesn't affect as much the approval of the I-526, although USCIS could start saying, "Well, we're not gonna actually adjudicate your I-526 petition, we're not gonna process it until there's a visa available to you on the Visa Bulletin." But I won't get into that too much.
Ali: I don't mind, Christian. Visa Bulletin, I mean, let's just talk about that. So explain in layman's terms, if you can, what's the difference between getting a Visa Bulletin versus the I-526 approval? How do I get to the country?
Christian: Yeah, here's what I'm trying to say. So, in the past, USCIS processed I-526 petitions on a first-in, first-out basis. If I filed my I-526 before you, mine would be processed and approved before yours, regardless of where I was in the world. Well, in 2020, I believe USCIS said, "We're changing our policy on that. We're gonna instead process your I-526 petition on visa availability."
So if I am from a country where it's backlogged, meaning that EB-5 visas are all taken up for the time being and it says so on this Visa Bulletin that's posted each month, then USCIS won't actually process my I-526 petition until I'm no longer backlogged. You know, the date on which I filed my I-526 is now availably be processed according to this Visa Bulletin.
So, when countries get backlogged onto this Visa Bulletin, that can start to affect the length of time it will take the I-526 petition to be approved. But when we look at this, we really think about how the Visa Bulletin is gonna limit or make someone wait how long, wait the amount of time to get the actual EB-5 visa to move into the U.S. to be a permanent resident. That's what it really controls.
But under this new policy, if you are from a backlogged country, your I-526 might take longer because USCIS will say, "Well, look, you don't have an EB-5 visa available to you anyway. Even if we approve your I-526 petition today, you still need to wait two, three, four years to get the EB-5 visa under this backlog. So we're gonna hold your I-526 petition until it becomes current."
I haven't seen a lot of that in action yet, though, Ali, because this policy being created in 2020, it was really not a good time to start getting examples because COVID really stopped consulates for a year. And right now I'm seeing most of my clients with approvals go through this consulate's processing system from 2019 and 2020. So I'd like to see this new policy in action, or actually some advantages for people from backlogged countries because if they'd use this policy to process I-526s on a visa availability standpoint, it could protect age-out issues for older children because the I-526 petition won't be approved until the EB-5 visa is available.
But right now for someone thinking about moving forward and filing their I-526, none of this really applies because it's all current for someone who invests in rural or high unemployment. That will change as people are using these two categories left and right, right now. People are filing I-526s. So eventually, those will backlog as well, and we'll see how that affects the Visa Bulletin and if it affects people's wait time.
Ali: That's a great explanation. Thanks for explaining that, Christian. So as of right now, we're waiting to see what happens. Everything is open for the investors. And if I'm understanding correctly, it's gonna be a while until we figure out if USCIS pushes back on anything, right?
Christian: Yeah. And, I mean, we need to see I-526s approved under these new categories to start then seeing them backlogged from certain countries. Because it's not until people start getting the EB-5 visas under these new categories will the backlog occur.
Ali: I know you can't look inside of a crystal ball, Christian, but I also wanted to ask you if you're gonna look in and see timeframe-wise, how much time do we have? People wanna hear your prediction. Tell us what you think, well, when it's gonna backlog, when things are gonna slow down.
Christian: Well, it's all about how fast can the I-526 petition be approved, right? Because once they're approved, people start requesting their EB-5 visa at the consulate or start being issued their Green Cards in the country if they filed to get their Green Card in the U.S. If I-526s speed up on processing times, if it takes a year to two years, then perhaps we'll start seeing backlogs for these set-asides by 2024. But that's all dependent on getting newly filed I-526 petitions approved in a timely manner.
Let's think about rural. What if priority processing means I-526 petitions are now approved in under 12 months or faster? Well, that would mean for all these rural I-526 petitions that we're filing this month and next month, if they're all approved within a year's time from now or so, we could start seeing backlogs for certain countries like China or India by the end of next year. I think that's probably a pretty aggressive timeline.
Ali: That's insane.
Christian: But that's dependent on priority processing coming through and USCIS being serious about moving those forward quickly. That's very good, though, Ali, for those who go forward now. Because that means if they're getting I-526s approved that fast, they're gonna be able to immediately request their EB-5 Green Card or their EB-5 visa abroad and enter into the U.S. as a conditional permanent resident. So there's other reasons why, if you're considering EB-5, to move forward under one of these set-aside categories sooner rather than later.
Ali: So, looking at your crystal ball, how's this gonna affect developers, and how do you see the rural versus the TEA versus the projects coming out? What do you see in your crystal ball for projects that are gonna be successful versus non-successful? And I know you can't predict this, but in terms of, are you gonna see more rural next year? And do you think TEAs fizzle out more within a year, year and a half? What's your prediction on the developer raising money front?
Christian: Well, I think rural and high-unemployment urban projects will remain popular. I mean, right now, I'm working with a number of different clients on both rural deals and high unemployment TEA deals because people wanna help their investors take advantage of the immediately available set-aside visas. But even when certain backlogs occur for countries, rural is still gonna have priority processing available to it, right?
So once we start seeing that faster processing time and action by USCIS, I think investors are gonna be very interested and continue to be very interested in rural projects. So I think more of those will probably come online over the next 6 to 12 months. There are rural deals out there right now, but I believe there will probably be more in the future as developers look to rural areas and identify good projects in those areas.
In terms of high-unemployment urban projects, even when the set-aside visas backlog for countries like China and perhaps India or Vietnam, you still get access to the lower investment amount of $800,000. You're still investing in an area in the United States that you've heard of, that perhaps you've been to, perhaps is with a developer that's a name brand or a well-known company. You're still investing in an economic situation that you're perhaps more accustomed to or comfortable with because perhaps you do that type of business in your home country.
Maybe you're a real estate developer, and maybe you do know hotels and condominiums and things like that, and that's something that you're comfortable investing in. So you still get access to that $800,000 investment level, could be from a country that's not gonna be subjected to a backlog in the near future, and high-unemployment area is still gonna be in a city setting, is gonna be your preference. So I think they'll both remain consistently popular.
Ali: That's great advice for developers as well. I appreciate that. I know they're listening on this podcast as well. Christian, that puts us at the end of the podcast. I do wanna, you know, let you know we appreciate all your participation and all the events and everything, all the advice you give out to everybody. You've been a huge help. You've become a favorite among a certain group of folks in the EB-5 space. Is there anything you wanted to add towards the end about your practice or what you do at Jackson Walker?
Christian: Well, sure. Well, thanks for the kind words. I'm always happy to help support your group. It's been a big benefit to grow my practice as well. So the thanks is mutual. But I would say that the immigration practice at Jackson Walker continues to grow stronger and busier every day, which is good to see. We are very much focused on all things business immigration, do some family immigration, but I enjoy working with families from all around the world who are looking at the EB-5 program or other kind of investor visas like the E2, or forming startup companies and moving into the U.S. under the L-1 visa program.
We really focus on making sure the client gets a lot of attorney connection and focus. We have a team of attorneys, paralegals, support staff that work on each case, but we really wanna make sure that they're getting the care they need from the attorney and the rest of the resources that we can put around them.
Ali: Appreciate you, Christian. And we'll be in touch soon, and hope to see you in India.
Christian: All right, I'll be there.
Ali: This has been the "Voice of EB5" by EB5investors Magazine. To learn more about this episode, please visit eb5investors.com/podcast. To stay up to date with the latest EB-5 discussions, be sure to subscribe to the show wherever you listen to the podcast. And if you like the show, please consider leaving us a 5-star review, it helps us out a lot. See you next week.