The US EB-5 visa has seen a significant shift in the source countries of candidates, according to the latest data.
Between 2014 and 2019, Chinese candidates have surged and then crashed, with the shortfall being made up by Indians and Vietnamese candidates.
Like all immigration programs, the EB-5 faces an uncertain future with the impact of the coronavirus pandemic. It is worth taking stock of where the program stood at the end of 2019, and see where it will fit into the US immigration system once the COVID-19 crisis has passed.
China: Sharp Surge Followed By Crash
Chinese candidates are a significant source of demand for investment immigration programs across the world and this is true for the EB-5 visa program.
Introduced in 1990, the program exceeded its annual cap of 10,000 visas for the first time ever in 2014 primarily due to surging demand from Chinese investors. That year marked the peak of Chinese demand with more than 85 per cent of all EB-5 visas issued going to investors from mainland China.
Demand from Vietnam and other countries led to China’s share of EB-5 visas falling slightly, but it continued to account for three out of every four EB-5 visas issued in 2017.
However, the huge demand-supply mismatch led to a huge visa backlog for Chinese investors, which meant applicants were staring at waiting periods as long as 15 years to qualify for two-year conditional permanent residence in the US.
Combined with other factors like growing trade tensions, concerns in the US over Chinese dominance of the program, and tighter currency controls in China led to a drastic fall in demand.
China’s share in the total EB-5 visas issued plummeted from 75 per cent to 48.3 per cent in a single year between 2017 and 2018. The decline continued in 2019 with investors from mainland China accounting for 45.7 per cent of all EB-5 visas issued.
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India: H-1B Alternative
India’s share in the program has risen from a tiny 0.9 per cent in 2014 to eight per cent in 2019, a staggering increase of 788 per cent in just five years.
With the US cutting down hard on H-1B approvals for Indian IT companies and waiting periods for EB-1, EB-2, and EB-3 categories running into decades, the Regional Center investment route has become the preferred route to the US green card for wealthy Indians.
The popularity of the EB-5 visa among Indians is evident from the fact that the country became the third nation after China and Vietnam to fully utilize its quota and hit the EB-5 backlog.
Now, Indian applicants are staring at an average waiting period of eight years from filing of the I-526 petition to being granted conditional permanent residence. Yet, demand is unlikely to taper any time soon because alternative routes are either too unreliable or involve longer waiting periods.
2020: Path Ahead
With investors rushing to file applications before the increase in minimum investments – from $500,000 and $1 million to $900,000 and $1.8 million respectively – 2020 was expected to be a tepid year for the EB-5 program.
However, the coronavirus pandemic is a new variable in the equation. It is possible the US government may roll back the investment hike or relax other requirements of the program to boost FDI inflows and boost job creation.