WHAT ARE THE IMPACTS OF
RETROGRESSION?
The industry became addicted to the massive influx of
Chinese EB-5 capital prior to retrogression. This allowed
many inexperienced issuers, developers and networks
to enter the EB-5 market, and in some cases resulted in
fraud and failed projects. Given that the Chinese market
is now 16.2 years in retrogression, according to Charlie
Oppenheim, Chief of the Visa Control and Repor ting
Division, and effectively shut down, a “rest-of-world”
sales strategy has to be employed to successfully
source EB-5 capital. This results in two developments
that have changed the industry:
T h e f i r s t o n e i s t h a t t h e r e h ave b e e n a d r a m a t i c
reduction in EB-5 par ticipates that can successfully
raise EB -5 capital, which has resulted in fewer
companies doing business. Competition and costs to
source investors has also dramatically increased since
2018.
The result of these changes are increased standards
a n d f i d u c i a r y ove r s i g h t , w h i c h h ave d r a m a t i c a l l y
improved project quality and investor protection across
the industry.
WHAT’S THE FUTURE FOR
RETROGRESSED COUNTRIES?
Bar ring a le gislative bill , re g ulations will inc rease
the difficulty of procuring investors in retrogressed
countries. Here is a synopsis of the current retrogressed
countries:
India is not dead yet. It is not predicted that 2020 will
be a great year in India for EB - 5 , bu t Oppenheim’s
2019 announcement that the reduction in the backlog
from 8.4 to 6.7 years changed the outlook to be more
positive. This reduction was easily predicted as we see
around 1.8 family members per petition in India, which
did not seem to be accurately depicted in previous
backlog predictions. A slow 2020 will likely allow this to
continue to decrease the Indian backlog, which will lead
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