Breaking News: State Department Announces Annual Limit Reached in the EB-5 Unreserved Category.
What does this mean for investors?
If you are a pre-RIA EB-5 investor or an applicant who did not invest in a TEA (Targeted Employment Area) or Rural project, U.S. embassies and consulates will NOT issue further visas in these categories until the start of the new fiscal year, October 1, 2024.
This is the first announcement from the State Department of this type since the enactment of the May 2022 EB-5 Reform and Integrity Act (RIA).
How EB-5 Visas are allocated:
There is an annual limit for employment-based visas, which also includes eligible dependents. Under the INA provisions, EB-5 visas account for around 7% of the total employment-based visas.
Of these visas, 32% are set aside for three categories of EB-5 applicants. Specifically, 20% are for applicants who invest in rural areas, 10% are for applicants who invest in areas with high unemployment, and 2% are for those who invest in infrastructure projects.
The remaining 68% constitute unreserved EB-5 visas.
Under RIA, new visa carryover provisions under the reserved categories were introduced. According to this, unused reserved visas from the fiscal year immediately prior will be rolled over to the current fiscal year within the same category. If these reserved carryover visas are not used within that fiscal year, either, then they will be carried over to increase the unreserved visa numbers.
This means that the reserved visas from FY 2022 (very few if any were used this year) were carried over to FY 2023. As FY 2023’s reserved visas also weren’t used in the same year, they rolled over to FY 2024. This translates into an unusually high number of EB-5 visas being available in FY 2024, including those made available in the unreserved category.
The State Department has confirmed the use of these unused visas stating, “. . . unused EB-5 reserved visas from FY 2022 may be made available in the EB-5 unreserved categories for FY 2024.”
Therefore, the State Department has successfully used all remaining unused reserved visas from FY 2022 as well as all allotted FY 2024 unreserved visas – a testament to the speed at which visas are now being processed in efforts to reduce the unreserved category backlog.
The annual limits will reset with the start of the new fiscal year (FY 2025), on October 1, 2024. At that point, embassies and consulates may resume issuing immigrant visas in these categories to qualified applicants.