The EB-5 Immigrant Investor Program has enjoyed immense popularity for many years and has long been considered one of the best ways to immigrate to the United States. EB-5 investment capital provides U.S. businesses with much-needed funds while enabling foreign nationals to apply for permanent resident status and relocate to the United States with their families. Despite the EB-5 program’s popularity and resounding success, many of the current policies established by United States Citizenship and Immigration Services (USCIS) disfavor the program—the EB-5 investment industry is in dire need of reform.

Given these circumstances, many industry members celebrated the Senate’s confirmation of Ur Jaddou as the new director of USCIS on July 30, 2021. Since Jaddou has extensive experience working in the U.S. immigration system, many believe that she will help solve the issues that plague USCIS and the EB-5 program.

Jaddou’s Background

Prior to her appointment as director of USCIS, Jaddou has served as the agency’s general counsel, majority chief counsel for the U.S. House Judiciary Subcommittee on Immigration and Citizenship, and director of DHS Watch. She was also a deputy assistant secretary at the U.S. State Department.

The Senate’s confirmation of Jaddou’s appointment is especially noteworthy because USCIS has been led by temporary acting directors for many years—surely, a more permanent directorship will result in sorely needed improvements to USCIS and the EB-5 investment industry.

Possible Changes to USCIS Policies

Jaddou has stated that she will work on solving USCIS’s funding issues. The COVID-19 pandemic caused a dramatic decrease in immigration petitions. Since much of USCIS’s budget comes from application fees, it announced a massive furlough scheduled for August 2020. Even though the furlough was ultimately averted thanks to tighter spending policies, USCIS desperately needs to return to solvency.

Perhaps the most important issue affecting the EB5 investment industry is USCIS’s notoriously slow petition processing times, which have caused stagnant visa backlogs for investors from numerous countries. In fact, China has experienced a backlog since May 2015. Given USCIS’s history of inefficiency, Jaddou will certainly have a lot of work to do to expedite the adjudication process for EB-5 applications.

Reactions to Jaddou’s Appointment

Many Republicans have openly expressed their distrust of Jaddou. However, her nomination was supported by numerous Democrats and agencies such as the U.S. Chamber of Commerce and the National Citizenship and Immigration Services Council. Many singled her out as the ideal candidate, citing her experience and promising track record. For example, Department of Homeland Security (DHS) Secretary Alejandro Mayorkas stated that Jaddou will “administer our Nation’s immigration system fairly and justly. As the daughter of hard-working immigrants, Ur understands how immigrant families enrich our country and the challenges they face.”

The United States is famous for its strong democracy and the various rights and freedoms its people enjoy. Nearly half of the world’s countries operate under authoritarian or semi-authoritarian regimes, and many of the countries with democracy face flaws with their political system, which leaves the United States as a shining beacon of hope in the minds of many. Many of those living under the boot of an authoritarian government yearn for a life of freedom as offered by the United States, and that desire fuels a large portion of EB-5 investments. While EB-5 Immigrant Investor Program stakeholders tend to focus on economic and practical benefits of a life in the United States, the freedom and rights of U.S. democracy are an equally important consideration behind many EB5 investments.

Let’s take a look through some of the most important freedoms and rights in the United States.

Freedom of Speech

Freedom of speech is guaranteed by the First Amendment of the U.S. Constitution and is arguably the most important freedom to U.S. democracy. In many countries, individuals and journalists alike can be punished by the government for criticizing government policy or (in)action, sometimes facing incarceration or even death. The United States is different. If a foreign national makes a successful EB-5 investment, they can enjoy the freedom to say anything they wish without fear of governmental repercussions. U.S. media has the same right to criticize the government with impunity and does so regularly.

Freedom of Religion

Though Christianity of various denominations is the most commonly practiced religion in the United States, there is no official state religion, and the nation is home to practitioners of all sorts of religions. Many Jewish people, Muslims, Hindus, Buddhists, agnostics, atheists, and others live peacefully in the United States, enjoying the right to practice their faith freely and preach it to others.

The Bill of Rights goes further than just enshrining religious freedom—it also prescribes the separation of church and state, prohibiting the U.S. government from establishing a state religion. In various countries around the world, religious minorities can find themselves persecuted and oppressed and could be arrested or killed for practicing the wrong religion or not practicing the state religion. Those desiring religious freedom should consider, if they have the means, making an EB5 investment as a relatively quick and easy pathway to permanent residency in the United States.

Right to Peaceably Assemble

The right to vote in elections is reserved only for citizens of the United States, in line with most other countries. However, in the United States, voting isn’t the only way to participate in democracy. Unlike in many countries, where governments crack down harshly on peaceful protesters, throwing them in jail indiscriminately or even killing them, the United States celebrates peaceful protest as a powerful means to positive change. Throughout U.S. history are numerous cases of peaceful protest inspiring significant policy changes, and everyone in the United States—citizen or not—is welcome to participate in or organize peaceful protests.

Similarly, U.S. government representatives answer to all constituents, even those without citizenship, so even temporary residents should feel free to reach out to their representative with any concerns. The U.S. political system is ever-evolving to better meet the needs of its diverse population, and everyone has a voice in this system. While the economic landscape of the United States is always a nice draw, the freedom to participate in politics is an equally legitimate motivation to make an EB-5 investment.

A Strong, Fair Legal System

The U.S. legal system prides itself on its fairness, guaranteeing rights even to those who are charged with a crime. Under U.S. law, anyone charged with a crime is considered innocent until proven guilty, and no one can be convicted and sentenced without a fair legal process. Those who do not have the means to hire a criminal lawyer will be provided one for free by the state, allowing everyone access to professional legal assistance in arguing their case. Criminal verdicts are determined by a jury of a defendant’s peers, not the government, ensuring maximal fairness.

People making EB5 investments to come to the United States probably won’t ever have to exercise these rights, but knowing a strong, fair legal system is in place to deliver justice and protect those who live in the United States may be a comforting thought for many, especially those from countries with corrupt justice systems that bow to the government.

Strong Civil Courts

The U.S. legal system extends beyond criminal justice. Civil courts across the United States settle disputes between individuals, businesses, institutions, and more, affording involved parties the same rights as in criminal justice cases. This system allows entities to push back against actions that have caused damages, whether monetary, psychological, or otherwise, and offers individuals or small businesses recourse to fight huge corporations or institutions. Though some may joke about the amount of litigation filed in U.S. courts, in truth, civil courts help protect individuals and small entities from abuse by larger, more influential entities. In fact, EB-5 investment participants often make use of this option when faced with abuse from United States Citizenship and Immigration Services (USCIS), such as in the famous case of Zhang vs. UCSIS.

America: Land of the Free

For those from authoritarian countries who must bow down to the government in all aspects of their lives, the United States can seem like paradise. The strong economy of the United States is only one part of the story—the rights and freedoms guaranteed by the Constitution are the underpinnings of the nation’s success. With an EB5 investment, foreign nationals the world over can claim a slice of the American life, enjoying the rights and freedoms that make the United States so great.

One of the beautiful things about the EB-5 Immigrant Investor Program is its flexibility. Foreign nationals from any country can participate in the residency-by-investment program, and their EB-5 investment capital can come from almost any source, as long as it is legal. This flexibility opens the program up to many foreign nationals dreaming of a life in the United States for themselves and their immediate family members.

Sourcing one’s EB-5 investment funds is often among the most complicated and time-consuming aspects of the EB-5 process. Newcomers to the program are often unsure as to where they may source their capital from. Below are five of the most common sources of EB5 investment capital and tips on demonstrating their legal sources to United States Citizenship and Immigration Services (USCIS).

EB-5 Investment Capital from Employment

Many foreign nationals who make an EB-5 investment earn their capital through employment. The employment may be with any company and in any sector, as long as it is legal. Depending on an investor’s employment situation, proving the lawful source of their employment income may necessitate collecting documents from multiple companies, sometimes dating back several years. In countries with less rigorous record-keeping standards than the United States, necessary documents may not always be available—but an experienced EB-5 immigration attorney can typically advise investors of a workaround.

Various documents can be used to prove the legal sources of an EB5 investment earned through employment, including bank statements, paystubs, and a letter from the respective employer confirming the position and salary. But proof of employment alone isn’t enough—an EB-5 investor must also demonstrate that they have paid all applicable taxes on their income by supplying their tax returns.

EB-5 Investment Capital from the Sale of Property

Whether they inherited a property or bought it and have sold it for a large capital gain, EB-5 investors commonly use the sale of property to fund their EB5 investment. To prove the lawful sources of such capital, the sale agreement is obviously necessary, as well as bank statements showing the funds being deposited in your account from the buyer. But that’s not all—USCIS wants to see that an EB-5 investor originally obtained the property legally. This may entail including the initial purchase agreement, along with proof of the legal sources for the capital used to purchase the property, or inheritance papers. Then, of course, an EB-5 investor must show they paid any property taxes due on the property.

In some cases, an investor owns a property for a significant period of time before selling it, making it difficult to trace the documents from the time of initial purchase. Under such circumstances, USCIS may be satisfied with a note explaining why obtaining these documents is impossible, backed up by statements from local experts. An EB-5 immigration lawyer can guide EB-5 investors through the best solution for their situation.

EB-5 Investment Capital from Loans

Loans are also an acceptable source of EB5 investment capital, whether they come from an institutional lender or an individual. However, securing a loan from an institutional lender is always the safer bet, as USCIS does not require documentation on how major banks sourced their capital for the loan. If contracting a loan from an individual, an EB-5 investor must include evidence showing how the individual acquired the amount. Another important condition to note is that a loan from a friend should be at market rate—USCIS is prone to deny loans significantly below the market average.

To be on the safe side, it’s also recommended to secure the full amount of the loan with the EB-5 investor’s personal assets. Courts have ruled that unsecured loans are indeed valid for EB-5 investment purposes, but with USCIS’s tendency to alter its interpretations on a whim, it’s far safer to use a secured loan, if possible. Again, experienced EB-5 counsel can help determine the best path for any individual EB-5 investor.

EB-5 Investment Capital from Gifts

Though it may come as a surprise to some, gifts are a common and valid source of EB-5 investment funds, particularly from parents to children. Most young EB-5 investors come to the program by way of a gift from their parents, allowing them to work toward U.S. permanent residency as they complete their studies in the United States.

While a gift is a perfectly valid source of EB5 investment capital, investors must still prove the legality of the gift. First, they must provide a written document detailing the gift, with the donor stating in no unclear terms that the recipient has no obligation to repay the amount. If a gift tax is applicable, as in some countries, such as South Korea, the investor must also include records of the tax having been paid.

However, the bureaucracy doesn’t stop there—USCIS wants to confirm that the donor obtained the capital from lawful sources. Therefore, the donor must agree to divulge comprehensive information on the sources of their funds, just as a principal investor would do for employment income. Additionally, if the donor is not an immediate relative, it’s always good practice to include an explanation as to why the donor was willing to gift such a large amount to the EB-5 investor.

EB-5 Investment Capital from Inheritance

Like gifts, inheritance may be used as a source for an EB-5 investment, but the documentation for inherited EB5 investment capital can be tricky. Naturally, the relation of the investor to the deceased must be demonstrated, as well as a copy of the will or other evidence of their right to the inheritance. If the applicable country or state levies inheritance taxes, proof of payment must also be included in the investor’s I-526 petition.

Where inheritance source of funds gets difficult is in demonstrating the legal source of the deceased’s capital. In some cases, this can entail tracing decades of documents, some of which may be impossible to obtain. Explanations attesting to the impossibility to obtain such documents and affidavits asserting the source of funds may be acceptable alternatives—as always, an EB-5 immigration lawyer can provide tailored advice for any investor’s situation.

Consult with an EB-5 Immigration Attorney

This is a non-exhaustive list showcasing merely the most common sources of EB5 investment capital. Investors can and do use an array of other sources to fund their EB-5 investments, and as long as they can prove the money came into their possession legally, anything goes. It is also, of course, possible to use funds from several different sources.

With a complex program like the EB-5 program, it’s important to remember that there is no one-size-fits-all solution, and all investors have unique situations. That’s why it’s imperative to retain an experienced EB-5 immigration attorney who can guide you through the best sources to use for your EB-5 investment.

Many foreign nationals want to relocate to the United States and enjoy the country’s strong economy, political stability, high standard of living, and delightful culture. Perhaps the best way to obtain permanent resident status in the United States is to participate in the EB-5 Immigrant Investor Program. The EB-5 program, which has been active since 1990, allows foreign nationals to obtain green cards by investing in qualifying U.S. enterprises. EB-5 investments stimulate the U.S. economy by creating a source of reliable, legal funds for businesses in need. Moreover, the successful, high-net-worth individuals who participate in the EB-5 program become valuable assets to the country. After gaining their green cards, EB-5 investors may eventually apply to become U.S. citizens.

If you are interested in making an EB-5 investment to obtain permanent resident status, keep in mind that United States Citizenship and Immigration Services (USCIS) sets out several requirements for EB-5 investors. All EB-5 investors must be in a position to make the EB5 investment and cover the associated fees. Further, they must be able to invest funds that remain at risk and create the required number of jobs. USCIS also requires investors to provide exhaustive documentation proving that their funds were sourced legally—if investors cannot submit the needed proof, then USCIS will deny their visa petitions.

Additionally, EB5 investments can be made either directly or through a USCIS-approved regional center. In the direct investment model, investors can only count directly created jobs given to full-time workers. Typically, individuals who make a direct EB5 investment are much more involved in the day-to-day operations of the business. In contrast, EB-5 investments made through regional centers allow investors to count direct, indirect, and induced jobs, thus making it easier to meet the employment creation criteria.

In light of the complexity of the EB-5 program and the many different ways to make an EB-5 investment, interested individuals would do well to enlist the services of an immigration attorney and EB-5 consultants. The following overview shows how individuals can obtain permanent resident status through an EB-5 investment.

1. Identify a Suitable EB-5 Investment Opportunity

Investors can choose between a direct investment or a regional center project. Note that the minimum required investment amount is $1,000,000. However, projects located in targeted employment areas (TEAs) have a reduced minimum required amount of only $500,000. TEAs either have high unemployment rates or are rural. EB-5 investors should choose projects with promising job creation potential.

2. Transfer the Investment Funds

Before transferring the funds to the project’s account, EB-5 investors must make sure that they are ready to document the sources of their funds. USCIS will ask them to trace the invested funds back to their sources in great detail. As previously mentioned, the funds must remain at risk once they are invested.

3. Submit Form I-526

Once an investor has transferred the funds to the project’s account and made sure that they are in compliance with all USCIS regulations, it is time to file Form I-526, Immigrant Petition by Alien Investor. In this petition, investors submit evidence that they have followed all USCIS regulations governing the source of funds, investment amounts, job creation, and other factors. Note that the EB-5 investment must be made before the filing of Form I-526. Typically, an investor’s immigration attorney files the I-526 petition for them. The adjudication process for most I-526 petitions may take between two to five years, depending on the investor’s country of origin.

4. Obtain Conditional Permanent Residence

Once USCIS approves the I-526 petition, an investor can apply for conditional permanent resident status by sending Form DS-260 to the National Visa Center. Investors who already have an immigrant visa must instead submit Form I-845. This conditional permanent resident status will last for two years.

5. Submit Form I-829

Within the last 90 days of their conditional permanent residency, investors must file Form I-829, Petition by Investor to Remove Conditions on Permanent Resident Status. In this petition, investors submit further proof that they have fulfilled all USCIS criteria. Once the form is approved, the investor and their immediate family receive permanent resident status. In five years, they will be eligible to apply for U.S. citizenship.

The EB-5 visa process can be complex, but investors who obtain permanent residency always find that their efforts were worthwhile. Further, EB-5 professionals can provide you with invaluable guidance and simplify the process significantly.

The EB-5 Immigrant Investor Program is famous for offering foreign nationals the opportunity to immigrate permanently to the United States in exchange for an EB-5 investment in a qualifying U.S. business, termed “new commercial enterprise” (NCE) in the EB-5 world. Though the EB5 investment journey may be quicker and easier than many other routes of immigration, it’s still a lengthy process that demands significant criteria and paperwork from participants. An EB-5 investment is characterized by a few key petitions, but meeting the requirements for those petitions can be difficult and time-consuming.

Form I-526: The Initial Petition

Form I-526 is what officially kicks off an applicant’s EB-5 investment journey. This is an investor’s first interaction with United States Citizenship and Immigration Services (USCIS). But investors must dedicate significant time and effort to preparing the I-526 petition, including setting up their EB-5 investment itself. An investor should carefully consider their investment options and choose an EB-5 project that aligns with their needs and goals. They should also conduct due diligence on prospective regional centers, if they, like most applicants, are making an EB5 investment through a regional center.

Prospective EB-5 investors are strongly encouraged to consult with an experienced EB-5 immigration attorney to discuss their individual needs, goals, and circumstances. An EB-5 lawyer can help an investor determine the best type of EB-5 investment for them and their family and guide them through the preparation process for the I-526 petition. Most importantly, they can help investors navigate the fund-sourcing aspect of the petition, generally cited as the most challenging and time-consuming aspect.

USCIS needs to know that any EB-5 investment funds it handles have come from lawful sources. Thus, investors are required to present proof of the lawful sources of their EB5 investment capital. EB-5 capital can come from any number of sources—including multiple sources—as long as the investor can prove its legality. USCIS demands an extremely rigorous fund-sourcing process—for example, showing the sale of a real estate asset alone isn’t sufficient. The investor must also show how they sourced the money to originally purchase the asset as well.

When the I-526 petition is finally compiled, the investor pays the processing fee and files it with USCIS. Processing times vary, but typically, it takes between two and five years for I-526 adjudication, depending on the investor’s country of citizenship.

After I-526 Approval: Obtaining Permanent Residency

Simply obtaining I-526 approval does not automatically grant a foreign national and their immediate family members permanent resident status. Instead, EB-5 investment participants must undertake another process to obtain the status, which further delays their relocation to the United States.

If an applicant has made their EB5 investment from overseas—as most EB-5 investors do—they must submit Form DS-260 to the U.S. Department of State (DOS). DOS verifies the investor’s admissibility and invites them and any family members accompanying them to the United States to schedule a visa interview at their local U.S. embassy or consulate. After a successful interview, an applicant is granted access to the United States, and their two-year conditional permanent residency starts upon landing in the United States.

Foreign nationals already residing in the United States under a different visa status are also eligible to make an EB-5 investment, and while their journey is generally identical to overseas applicants, it does differ at the post-I-526 stage. Domestic investors do not go through consular processing—instead, they file Form I-485 with USCIS to adjust their immigration status. Upon approval of their I-485 petition, their conditional permanent residency period begins.

Form I-829: The Final Petition

Form I-829 can only be filed within the final 90 days of an EB5 investment participant’s two-year conditional permanent residency period. The purpose of the petition is to remove the conditions and grant the petitioner unrestricted permanent residency rights in the United States, and to have these conditions removed, an investor must prove that their EB-5 investment did, in fact, meet all the criteria of the EB-5 program.

An investor must satisfy several criteria for a successful EB-5 investment, including maintaining the EB5 investment capital at risk throughout the entire investment period and creating a minimum of 10 new jobs for U.S. workers. Those who make EB-5 investments directly in an NCE must present 10 new jobs on the payroll of the NCE, but those who invest through a regional center need only present a third-party economic calculation using approved methodology that indicates at least 10 direct, indirect, or induced jobs. The I-829 petition must be submitted with evidence to support the fulfillment of these criteria, as well as the filing fee and biometrics fee. If the I-829 petition is approved, the investor and any included dependents have the conditions removed and become fully fledged permanent residents of the United States.

The popularity of the EB-5 Immigrant Investor Program is undeniable—since 2008, the program has skyrocketed in demand, becoming a popular means of obtaining U.S. permanent resident status for foreign investors around the world. Nonetheless, the program remains controversial in the United States, and a sea of policy issues undermine its effectiveness for EB-5 investment participants, project developers, other EB-5 stakeholders, and the U.S. economy alike. While foreign investors have flocked to the program to earn U.S. permanent resident status for themselves and their immediate family members, the ever-slower processing times at United States Citizenship and Immigration Services (USCIS) and the agency’s retroactively applied rule changes frustrate those who make EB5 investments.

Lawsuits from disgruntled EB-5 investment stakeholders are not uncommon and can have drastic impacts on the program, overturning previous regulations. One famous example is Zhang v. USCIS, where the courts ruled against USCIS’s assertion that unsecured loans constituted indebtedness and thus not a valid source of EB-5 investment capital. Even more dramatically was the case of Behring Regional Center LLC v. Chad Wolf et al., which resulted in the Modernization Rule being overturned. The Modernization Rule had increased the minimum required EB-5 investment amounts by 80% and tightened the rules governing targeted unemployment area (TEA) designation, making EB5 investments far more expensive and harder to qualify for the lower TEA investment amount.

Then, among the U.S. public, the EB-5 program holds a negative reputation of fraud and corruption. This is in part due to the negativity bias of the media, which capitalizes on any instances of fraud in the EB-5 program, while, naturally, not reporting on the many successful and honest EB-5 investments. Politicians are often reluctant to offer support for the program, despite its positive influences, due to its controversial nature. Some politicians have even taken a hardline stance against the program, alleging rampant fraud.

Indeed, the EB5 investment world is swirling with legislative problems and regulatory issues, which is pushing some would-be investors away to residency-by-investment programs in other countries. The program’s dire need for reform has been the pivotal EB-5 investment topic of the first half of 2021, with reform seen as the only way to save the EB-5 Regional Center Program from expiration on June 30, 2021. And sure enough, when the Senate failed to enact the much-needed reform, the program expired, causing major headaches and delays for EB-5 investment stakeholders of all kinds. So, there is no shortage of policy issues in the EB-5 program.

Fraud and National Security Concerns

Perhaps the most common criticism of the EB-5 program is the doors it opens for fraudulent activities and national security risks. One U.S. senator even noted the egregious possibility of the EB-5 program for spies from the Chinese Communist Party to gain U.S. permanent residency rights. When adjudicating petitions, USCIS may flag EB-5 investors with ties to foreign adversaries or with connections to organized crime or terrorism, but the agency may not deny immigration rights to an applicant simply based on national security concerns, indeed opening the door to abuse by malicious actors.

Fraud is also a major concern for EB-5 stakeholders and the U.S. public alike. A few famous cases of EB-5 investment fraud have tarnished the program’s image in the media, and while most EB-5 stakeholders are honest and act in good faith, the industry has been pushing for meaningful reform for years. For one thing, USCIS requires investors to show the lawful sources of their EB5 investment capital, but when records date back decades in countries with poor documentation systems, it’s hard for USCIS to truly verify the source of funds. Project developers may also defraud investors in Ponzi schemes, creating fake projects that simply siphon off EB-5 investment funds for the enrichment of the project leaders. Finally, EB-5 regional centers may also participate in fraud, fooling investors with aggressive promotion tactics that lead investors to believe regional centers are government-run.

USCIS has taken measures to confront and stem problems of fraud in the EB-5 program, but without comprehensive program reform, it’s difficult to truly move forward. Since 2018, the agency has worked more closely with the Federal Bureau of Investigation (FBI), Immigration and Customs Enforcement (ICE), and the Securities and Exchange Commission (SEC) to identify instances of money laundering or other fraudulent activities, as well as national security issues including potential terrorists or spies. Proposed changes, such as the ability to terminate regional centers involved in criminal activity, the ability to prevent individuals with criminal records from being principals of regional centers, and the authority to audit regional centers, could go a long way in allowing USCIS to more effectively root out EB-5 fraud.

USCIS Data Collection Issues

Another major area of policy issues in the EB-5 program is USCIS’s poorly organized data collection methods. USCIS’s failure to digitalize much of its data, instead relying on heaps of paperwork, makes it difficult to trace necessary tidbits of information and effectively identify irregularities that could indicate fraud. Historically, USCIS has also requested relatively little information from EB-5 investment participants, omitting even information that could aid in detecting fraud. Gradually, the agency has been expanding the amount of information it collects and the ways it interacts with it, but there remains much room for improvement.

In 2017, USCIS increased the number of in-person site visits made to EB5 investment projects, finding more than 30% to be “not operating as expected,” whether because they were deserted, had gone out of business, or were not undertaking the activities they had claimed to. A historical lack of site visits could mean there is a sizeable number of EB-5 projects who have gotten away with fraudulent activities undetected.

USCIS’s failures in data collection also impede the ability of EB-5 investment stakeholders to calculate the economic impacts and job creation figures of the EB-5 program. USCIS only verifies that at least 10 jobs have been created per investor instead of tracking the precise number of jobs each investor created, significantly undercutting the total number of jobs created. Overall, USCIS data provides stakeholders with little insight into where EB5 investment capital goes.

Petition Processing Issues

For EB-5 investment participants, one of the worst policy issues at USCIS has been the adjudication times for EB-5 petitions, which have steadily increased over the 2010s as program demand shot up. In particular, Chinese investors face extremely long processing delays, due to country-based restrictions on annual visa allocation. Some investors have grown frustrated at their long waits and even submitted lawsuits to withdraw their EB5 investment and give up their ambitions to immigrate to the United States.

In 2018, USCIS hired a slew of new employees dedicated to EB-5 petition adjudication to help speed up processing times, which did improve the situation. But in 2019, processing times increased significantly again, with USCIS attributing the delays to strengthened measures to ensure integrity. In April 2020, the immigration agency introduced a new I-526 petition processing strategy that prioritized petitions from applicants whose countries did not face an EB-5 visa backlog, asserting that this move would help streamline processing and speed up the process for those who don’t face backlogs. 2020 was an unusual year in many ways, and USCIS couldn’t have predicted the pandemic that swept the world—but the visa availability processing approach didn’t appear to decrease processing times. Processing times is one of the areas that most EB-5 reform initiatives target, pushing for USCIS to return to reasonable processing times.

The EB-5 Immigrant Investor Program is one of the best ways for foreign nationals and their families to relocate to the United States and enjoy the country’s thriving economy and delightful culture. To qualify for permanent resident status, foreign nationals must make an EB5 investment in a qualifying U.S. enterprise and create or preserve at least 10 full-time jobs. Moreover, potential EB-5 investors received encouraging news on June 22, 2021—the EB-5 Modernization Rule had been invalidated, so the required minimum investment amounts decreased to $500,000 for targeted employment area (TEA) projects and $1,000,000 for non-TEA projects. Since United States Citizenship and Immigration Services (USCIS) or the Department of Homeland Security (DHS) could take action to raise these minimum amounts, EB-5 investors should take advantage of this opportunity while it lasts.

Admittedly, interested foreign nationals may feel apprehensive about making an EB-5 investment due to the June 30, 2021 suspension of the regional center program. Still, they can be confident that the program will be reauthorized in the coming months—after all, the regional center program previously expired in December 2018 but was later resumed. In fact, the program may be reauthorized in Fall 2021 as part of a spending bill.

Regardless of whether potential investors are interested in investing directly or making a regional center investment once the program is reauthorized, the following guidelines will help them prepare for the EB-5 investment process.

Procure Source-of-Funds Documentation

USCIS has put in place strict guidelines regarding the source of funds of EB-5 investments. When filing Form I-526, investors must provide exhaustive evidence that outlines the sources of their funds and proves their legality. To make matters more complicated, the required documentation will vary depending on the source of funds in question. For instance, EB-5 investors using funds gained from real estate sales will have to submit a property ownership certificate and purchase and sales contracts. On the other hand, foreign nationals who use gifted EB-5 capital will have to procure a written gift agreement signed by both parties. Proving the legality of EB-5 investment funds can be difficult and time consuming, so be sure to gather all the relevant documentation as early as possible.

Work with EB-5 Professionals

The many regulations governing the EB5 investment industry can be confusing to foreign nationals who are new to the program and want to minimize their investment risk. If a foreign national’s EB-5 investment does not comply with all the applicable guidelines when their I-526 petition is filed, USCIS may deny their application or send a request for evidence (RFE). Therefore, EB-5 investors should hire an experienced immigration attorney. Investors can also work with EB-5 consulting firms, which can help them keep up with the rapidly-changing EB5 investment industry.

Identify a Suitable EB-5 Investment Opportunity

Interested foreign nationals should start doing research on available EB-5 projects as soon as possible. When evaluating potential EB-5 investment opportunities, they should be on the lookout for high-risk or suspicious projects that do not have contingency plans in case of a capital shortfall. The safest EB-5 projects have taken steps to ensure their completion even if they do not gather all the planned capital, and EB-5 consultants can help identify such projects. For example, EB5AN offers highly reliable EB-5 projects and has a 100% I-526 and I-924 project approval rate.

Making a successful EB-5 investment requires careful planning and research, but it can lead to a new life in the United States. Schedule a meeting with EB5AN to learn more about current EB-5 investment projects.

United States Citizenship and Immigration Services (USCIS) has released the Visa Bulletin for August 2021, which contains thrilling news for the EB-5 investment industry. In many cases, the monthly Visa Bulletin reports long, stagnant wait times for EB-5 investors from backlogged countries. In contrast, the August 2021 Visa Bulletin has positive news for Chinese and Vietnamese investors.

Chart A of the Visa Bulletin, “Final Action Dates for Employment-Based Preference Cases,” shows that Vietnam has finally achieved “C” (current) status. This means that the long backlog for Vietnamese EB-5 investment visas has been resolved, and Vietnamese investors no longer have to wait until the final action date catches up with their I-526 priority date. Now, every Vietnamese investor with an approved non-regional center I-526 petition is eligible to apply for conditional permanent resident status through the EB-5 program. This is certainly wonderful news for all Vietnamese foreign nationals who have made an EB-5 investment. Vietnam had been experiencing a visa backlog since 2018, but its final action date leaped forward by two years in the July 2021 Visa Bulletin.

China’s situation has also taken a positive turn: the final action date for Chinese EB-5 investments advanced one week from November 8, 2015, to November 15, 2015. This may seem like a very small step forward, but any improvements in the final action date for China are always welcome—after all, the final action date for China remained the same for almost a year prior to the June 2021 Visa Bulletin. The one-week jump in the Chinese final action date follows an even more significant two-month advancement in the July 2021 Visa Bulletin.

Foreign nationals planning an EB5 investment should keep in mind that the final action dates for regional center investments are all marked as “U” (unauthorized) because of the June 30 expiration of the regional center program. As of that date, USCIS is not accepting I-526 petitions associated with a regional center. Still, USCIS has asked regional center EB-5 investors to continue to answer requests for evidence (RFEs), which leaves the door open to a future reauthorization of the program. In fact, the regional center program may be reauthorized as part of a fall 2021 spending bill.

In contrast to Chart A, Chart B of the August 2021 Visa Bulletin, “Dates for Filing of Employment-Based Visa Applications,” is devoid of encouraging news. China’s date for filing of December 15, 2015, has not advanced in over 12 months. This means that Chinese foreign nationals who have made an EB-5 investment and have an I-526 priority date after December 15, 2015, are not allowed to file their visa applications with the National Visa Center (NVC).

The above news indicates that the EB-5 investment industry is changing rapidly. If you are considering an EB-5 investment, schedule a free consultation to learn more about available opportunities. EB5AN is here to guide you through the EB5 investment process and help you enjoy the many benefits of relocating to the United States.

There’s hardly a person in the world who hasn’t been affected by the worldwide pandemic caused by the COVID-19 virus. With millions of deaths, small businesses decimated, and public life entirely shut down, the world has never seen anything like it. EB-5 investment stakeholders were among those affected—2020 was, in various ways, not a good year for the EB-5 Immigrant Investor Program.

U.S. Embassy and Consulate Shutdowns

The first way the pandemic affected EB-5 investors was through the mass shutdowns. In March 2020, United States Citizenship and Immigration Services (USCIS) closed all offices nationwide, canceling all visa appointments and only partially reopening in June 2020. Overseas, all U.S. embassies and consulates suspended routine visa services, staying open only for emergencies. This meant that EB5 investment participants could no longer schedule or attend visa interviews, even if they already had I-526 petition approval. Unable to complete this final step of securing an EB-5 visa, investors were left in limbo, with no way to claim the conditional permanent resident status they had earned through their EB-5 investment. Services were phased back in starting in August 2020, but decisions were left up to the individual consulates based on the situation in the respective country.

Immigration Bans

Immigration and travel bans around the world have been a key mark of the pandemic, with most countries restricting access to foreign nationals. The United States, under the Trump administration, was no exception: in April 2020, Trump announced a ban on most forms of employment-based immigration for 60 days, eventually extending it to run through the rest of 2020. EB-5 investment participants were initially exempt, much to the disappointment of certain U.S. senators, who wrote to Trump to ask the EB-5 program to be similarly banned, citing hyperbolic allegations of widespread fraud. EB5 investment stakeholders struck back, pointing out all the positive impacts the EB-5 program has had on the U.S. economy and development, all at no cost to the U.S. taxpayer.

When the Trump administration extended the immigration ban, they also tightened it to include more classes of immigrants—but to the relief of EB-5 participants, the EB-5 program was still exempt. Of course, in reality, it wasn’t that simple: investors still had to overcome the various travel restrictions in place in other countries. Some countries had exit bans on their citizens, and others refused to allow layovers, meaning that some investors who were technically permitted to enter the United States still couldn’t travel.

Economic Impacts

When talking about the EB-5 program, it’s important to remember that EB-5 investors aren’t the only stakeholders. EB-5 project developers are also key actors in the program, and in some cases, the devastating economic impact of the COVID-19 pandemic brought their projects to a screeching halt. The hospitality and tourism sectors were particularly decimated, and hospitality happens to be one of the biggest industries for EB-5 projects. The single largest industry is commercial real estate development, which was also badly affected. Not only did these impacts force many projects to suspend development, but they also hurt the ability of EB5 investment participants to create the 10 full-time jobs needed for EB-5 program requirements. The high rates of unemployment that quickly followed the initial shutdowns also altered which areas of the United States qualify as targeted employment areas (TEAs), affecting projects with investors who had yet to file their I-526 petitions.

USCIS Funding Shortages

Unsurprisingly, USCIS saw a steep drop in the number of immigration petitions received in the wake of the COVID-19 pandemic and lockdowns. USCIS largely funds its activities through the processing fees received with petitions, so when this cash supply was suddenly cut off, the agency suffered. USCIS announced massive furloughs in August 2020, although the immigration body was ultimately able to skirt the furlough by reducing spending and upping revenue. The shortfall was addressed in a funding bill for 2021, which approved hikes to premium processing fees to help the agency stay afloat. The bill also required USCIS to provide Congress with a five-year plan to address processing inefficiencies and improve processing times for all types of immigrants. Since premium processing is not available for EB5 investment stakeholders, the change had little impact on the EB-5 program, although the five-year plan will.

There is a great deal of uncertainty surrounding the current state of the EB-5 Immigrant Investor Program. June 2021 was a pivotal month in the history of the EB-5 program—on June 22, the U.S. District Court of the Northern District of California ruled to invalidate the EB-5 Final Rule. This measure had raised the minimum investment amounts to $900,000 for targeted employment area (TEA) projects and $1,800,000 for non-TEA projects. The court’s ruling caused the minimum investment amounts to return to their pre-November 2019 status of $500,000 for TEA projects and $1,000,000 for non-TEA projects. Of course, these lower amounts were a great incentive for individuals considering an EB-5 investment.

Just a few days later, on June 30, 2021, the regional center program was suspended because the Senate failed to pass the EB-5 Reform and Integrity Act of 2021, which would have reauthorized the program for three more years. As a result, United States Citizenship and Immigration Services (USCIS) has ceased to process all I-526 petitions associated with a regional center EB5 investment.

During this tumultuous period for the EB-5 program, USCIS published the processing statistics for January to March 2021 (FY2021 Q2). The number of processed I-526 and I-829 petitions remained remarkably low, which reflects the Immigrant Investor Program Office’s (IPO’s) reduced productivity levels. This trend is especially disappointing in light of the lower demand caused by the ongoing COVID-19 pandemic—in theory, USCIS adjudicators should have more time available to take care of incoming petitions. Still, the receipt statistics do show some improvement for Form I-829.

Possible Effects of the Regional Center Program’s Expiration

The processing data shows how urgent and critical it is for the regional center program to be reauthorized by the government. By the end of March, there were over 13,000 unprocessed I-526 petitions. The regional center program’s suspension has undoubtedly caused difficulties for thousands of investors (past data shows that the vast majority of EB-5 investments are made in regional centers).

The regional center program’s inactive status may be good news for direct EB-5 investors and I-829 applicants. Given that USCIS will no longer accept I-526 petitions associated with regional centers, more adjudicators should be available to work on direct EB-5 investment I-526 petitions and I-829 petitions. If this is the case, then the existing backlog of I-526 petitions could be processed in its entirety by the end of 2021. Of course, these are all conjectures—there is no way of knowing exactly when the reauthorization of the regional center program will take place.

On the bright side, the receipt data for Form I-829 is positive when compared to the statistics from the previous quarter: from January to March 2021, there was a total of 1,053 received I-829 petitions. This means that an increasing number of EB-5 investors are completing their conditional permanent residence period and applying for permanent residence. In contrast, only 98 I-526 petitions were received during this period.

As mentioned, the uncertainty surrounding the regional center program and the EB5 investment minimum amounts makes it difficult to predict what the trends for the following quarter will look like. Nonetheless, investors can be sure that the regional center program will likely be reauthorized in the near future.