The EB-5 Immigrant Investor Program offers foreign nationals a chance to start a new life in the United States in exchange for a qualifying EB-5 investment in a new commercial enterprise (NCE). EB-5 investors hail from all around the world and come from various backgrounds and walks of life, so a one-size-fits-all solution doesn’t accommodate everyone’s needs. Fortunately, the EB-5 program offers a degree of flexibility to those considering making an EB5 investment. Namely, investors have the choice of investing directly in an NCE or investing indirectly via an EB-5 regional center.

Regardless of the path, everyone who pursues an EB-5 investment must fulfill the same requirements to be eligible for the coveted permanent resident status the program offers. One such requirement is involvement in the NCE in which one is investing. This requirement isn’t a major obstacle for most direct investors, who choose the route specifically to exercise more managerial control over their EB-5 investment capital. For those who invest through a regional center, however—and the majority of EB-5 investors do—the requirement can be daunting, as they may not have the time, desire, or experience to carry out substantial managerial work. Luckily, their managerial obligations are significantly lighter.

Managerial Duties in EB-5 Regional Center Investments

Though some investors may be interested in earning a return on their EB-5 investment, most EB-5 participants pursue the program solely for the green card benefit. For many, permanent resident status in the United States means a brighter, safer, more stable future for themselves and their family and is worth more than money. This leads to a significant proportion of EB-5 investors who either don’t want to, or cannot, participate in the day-to-day management of the NCE.

EB-5 regional centers are aware of EB-5 investors’ motivations, and most employ a structure specifically designed to circumnavigate this “active involvement” requirement. Most regional center projects are structured such that the investors sign on as limited partners, endowing them with certain rights, powers, and duties. While investors are then required to vote on pertinent business matters and policy decisions, this setup absolves them of the need to engage with daily managerial tasks.

More Freedom for Investors

Besides escaping the need for grueling daily management work, the limited partnership structure offers numerous benefits for EB-5 investors. With a minimal managerial obligation to the NCE, investors can pursue their own employment, education, or other endeavors in the United States, allowing them to structure their life how they envision it. In a similar vein, the setup allows investors to make an EB-5 investment in a suitable project anywhere in the United States while living in an entirely different state. For example, an EB-5 participant could invest in a Georgia EB-5 project but settle down in Massachusetts.

Before signing a contract with an EB-5 regional center, an investor should carefully read the terms and conditions and consult with a qualified EB-5 immigration attorney to ensure the agreement will satisfy the managerial involvement requirement of the EB-5 program. Failure to demonstrate sufficient involvement in the EB5 investment on the I-526 petition could result in denial, so this step is not to be overlooked.

The first half of 2021 has been a suspenseful six months for the EB-5 investment community, with stakeholders bating their breath as they watched the rapidly unfolding developments in the EB-5 space. The EB-5 Regional Center Program has been a hallmark of EB-5’s success throughout the 2010s, when EB-5 demand reached an all-time high and the United States welcomed thousands of EB-5 investors from all around the world. But as successful as the regional center program has been, Congress has yet to make the program permanent, even though the base EB-5 Immigrant Investor Program is. So, when Congress separated the program from the omnibus funding bill it has traditionally been coupled with, it aroused panic in the EB5 investment community. Could the program vie for reauthorization all on its own?

As it turns out, no, it couldn’t—at least not without reform. That has been the concern of EB-5 industry leaders since January, who have steadily warned that failing to enact wide-ranging EB-5 reform would likely result in the suspension of the program. A bipartisan duo—Senators Chuck Grassley and Patrick Leahy—introduced the EB-5 Reform and Integrity Act to the Senate in late 2020, and while the bill wasn’t perfect, it would have implemented the integrity changes necessary for the EB-5 Regional Center’s all-important reauthorization. While most EB-5 investment stakeholders embraced the bill, despite its flaws, some continued holding out for a better option that ultimately never came.

Why Did the EB-5 Regional Center Program Expire?

On June 24, Grassley and Leahy, joined by fellow Senator John Cornyn, requested unanimous consent from the Senate to pass the EB-5 Reform and Integrity Act. They praised the regional center program and the positive impacts it has had on the U.S. economy, including the thousands of jobs it has helped create. The addition of Cornyn was a surprise to many who had been following the developments, as he was an original co-sponsor of the Immigrant Investor Program Reform Act, a different EB-5 reform bill that stood in opposition to the EB-5 Reform and Integrity Act, and it gave many hope for a positive outcome.

Unfortunately, one of the co-sponsors of the Immigrant Investor Program Reform Act—Lindsey Graham—was less willing to be flexible. Graham and another senator objected to the unanimous consent and thus halted the bill from being passed. Senator Chuck Schumer failed to bring forth temporary reauthorization to keep the program afloat until a decision on reform is reached, and that was that—once the clock struck midnight on July 1, 2021, the EB-5 Regional Center Program was officially suspended.

What Happens Now?

Don’t panic—the EB-5 Regional Center Program isn’t over. While the future is uncertain, this fiasco will probably at most cause a few months of delay instead of terminating this valuable program altogether. This isn’t the first time the regional center program has expired—it once expired temporarily in December 2018, remaining suspended for a month. While this temporary suspension resulted in extra delays for EB5 investment participants, many of whom were already stuck in backlogs, it didn’t have any long-term effects on the program, and processing resumed as normal following the reauthorization. In all likelihood, this time will be similar.

On June 30, 2021, United States Citizenship and Immigration Services (USCIS) updated its website to announce the changes coming to the EB-5 program over the period of suspension. The immigration agency will reject any Form I-924 petitions to set up a new regional center and Form I-526 petitions affiliated with a regional center EB5 investment, and processing on any currently pending such petitions has been halted. The announcement did state, however, that USCIS is still accepting I-829 petitions even for EB-5 investments affiliated with regional centers and that investors should continue to respond to requests for evidence (RFEs), notices of intent to deny (NOIDs), and other USCIS correspondence in a timely manner. On July 1, 2021, the agency updated its announcement to add that it would no longer accept I-485 petitions associated with regional center investments, either, even though overseas consulate processing is slated to continue.

As the EB-5 investment community careens into the future of the program, stakeholders should maintain a cool head and continue to push for meaningful reform. It’s not too late to pass the EB-5 Reform and Integrity Act and regain reauthorization for the critical EB-5 Regional Center Program. While the developments as of late are disturbing, they don’t spell the end of the world for the EB-5 program and the thousands of foreign nationals who have made EB-5 investments. Reauthorization is still likely in the future of the regional center program.

In light of the EB-5 regional center program’s expiration on June 30, 2021, many EB-5 investors and industry stakeholders are concerned about the EB-5 investment program’s future. However, despite the cause for concern, most industry representatives remain convinced that the regional center program will be reauthorized shortly. Many are pointing to direct investments as a viable option in the interim.

Will the EB-5 Investment Program Be Reauthorized?

Senators Grassley (R-IA) and Leahy (D-VT) have led the push for the reauthorization of the EB-5 regional center program. Their bill, called the EB-5 Reform and Integrity Act of 2021, would have authorized the program through 2023. However, when the senators pushed for a unanimous consent vote, Senator Lindsey Graham (R-SC) blocked the effort. With the Senate on its summer recess, the EB-5 regional center program expired on June 30, 2021.

Despite the program’s expiration, EB-5 industry stakeholders remain confident because the program is unlikely to end permanently. The regional center program has poured billions in foreign capital into the U.S. economy, and many senators’ constituents will not want the program to disappear.

The EB-5 regional center program could potentially be reauthorized as part of a spending bill in Fall 2021. The longer timeframe would give senators and lobbying groups more time to negotiate. Although it may be disappointing for EB-5 industry stakeholders to hear that the program will not be reauthorized immediately, they can be sure that these efforts would secure the long-term authorization of the EB-5 regional center program.

What Happens Once the Program Expires?

Those who have already made an EB-5 investment may find it unsettling to hear that the program is about to expire. However, the recent history of the program’s previous expiration periods shows that there is nothing to fear.

In December 2018, the federal government failed to pass the omnibus spending package to which the EB-5 regional center program was attached. This led to a federal government shutdown and the de facto expiration of the EB-5 regional center program.

Following the regional center program’s expiration, the Department of Homeland Security (DHS) released the following statement.

“The EB-5 Immigrant Investor Regional Center Program expired at the end of the day on Dec. 21, 2018, due to a lapse in congressional authorization to continue the program. All regional center applications and individual petitions are affected. . . We will continue to receive regional center-affiliated Forms I-526, Immigrant Petition by Alien Entrepreneur, and Forms I-485, Application to Register Permanent Residence or Adjust Status, after the close of business on Dec. 22, 2018. As of Dec. 22, 2018, we will put unadjudicated regional center-affiliated Forms I-526 and I-485 (whether filed before or after the expiration date) on hold for an undetermined length of time…. USCIS will provide further guidance to the public if legislation is enacted to reauthorize, extend, or amend the regional center program.”

Even though DHS announced that it would put any incoming I-526 applications on hold, it was implied that these applications would be processed once the program was reauthorized. It seems that DHS will handle pending petitions after June 30, 2021 in a similar manner. Any pending petitions will presumably be put on hold until the program is reauthorized. Once the program is reauthorized, United States Citizenship and Immigration Services (USCIS) will likely resume processing applications.

What Does This Mean for Investors Who Invested at $500K?

On June 22, 2021, just a few days before the regional center program expired, the U.S. District Court for the Northern District of California ruled that former acting DHS Secretary Kevin McAleenan did not have the authority to institute the EB-5 Modernization Final Rule. The new regulations set forth by the Modernization Rule, including the raising of the minimum investment amount for TEA projects from $500,000 to $900,000, were also invalidated by the court ruling.

This court ruling meant that EB-5 regional center investors could make their investments under the pre-November 2019 guidelines during a short period. Under these guidelines, the minimum investment amount was $500,000 for TEA projects and $1,000,000 for non-TEA projects.

While DHS has released no specific information regarding how these investors will be treated until the program is reauthorized, most EB-5 industry representatives believe that these investors will be classified along with those who had invested at the $900,000 minimum amount for TEA projects.

What Does This Mean for Direct Investments?

Even though the vast majority of EB-5 investors choose to make their EB-5 investments through regional centers, there is another way to make EB-5 investments: EB-5 investors can participate in the EB-5 program by investing directly in their projects. Although direct investments have been fairly uncommon, several EB-5 industry representatives have suggested that they will become more widespread until the EB-5 regional center program is reauthorized.

Given that the EB-5 Immigrant Investor Program is designed to bestow U.S. permanent residency rights upon applicants in exchange for a successful EB-5 investment in a qualifying project, U.S. citizens are ineligible to participate. Foreign nationals residing in the United States on other visas may also overlook the program, since they’ve already attained residency rights. But temporary U.S. residents are just as welcome to participate in the popular residency-by-investment program as foreign nationals living overseas, and if they hope to make the United States their permanent home, an EB5 investment is a thoroughly wise investment.

The Benefits of Permanent Residency over Temporary Status

Though millions of foreign nationals dream of living in the United States, the dream is unattainable for most. Immigration is difficult, and even those who secure U.S. visas are only granted a temporary stay. The United States doles out thousands of H-1B employment visas and F-1 student visas each year, but both come with stringent restrictions on the activities the visa holder can undertake during their stay, and both are temporary, nonimmigrant visas, obliging the foreign national to return to their home country when their visa expires. Indeed, most immigrants to the United States can only stay temporarily, and depending on their visa, they may be barred from taking on employment, educational opportunities, or making multiple entries into the United States.

A permanent resident, conversely, enjoys most of the same rights and freedoms as U.S. citizens. A green card holder can live, work, and study anywhere in the 50 states without restriction. They can access the world-class health facilities that the United States boasts, they can more easily gain admission to world-renowned U.S. universities, and they may even be eligible for in-state tuition rates, which can generate thousands of dollars in savings. Upon retirement, they can cash in on their pension benefits both from overseas and from the United States, and they may qualify for Medicare and other Social Security benefits.

Making an EB-5 Investment from within the United States

If a foreign national is already residing in the United States on a different visa, be it an H-1B, an F-1, or anything else, they have the option of making an EB-5 investment and obtaining a green card. With a green card, the restrictions around employment and education fall away, and they can live indefinitely anywhere in the United States. Their immediate family members—spouse and unmarried children younger than 21—are eligible to receive green cards alongside them.

An example is an H-1B worker. H-1B visa holders may have an opportunity to obtain permanent residency, but it could take more than a decade, and they would be subject to harsh employment restrictions and visa regulations for the entire duration. With an EB5 investment, an H-1B visa holder could instead receive their green card in a few years, securing permanent U.S. residency rights to confidently settle down in the United States.

The process of making an EB-5 investment from inside the United States is essentially no different from the process for overseas investors, although domestic EB-5 investors can more easily travel to the site of their project for an in-person inspection. An investor, domestic or overseas, must select a qualifying EB-5 project and commit the minimum required EB5 investment amount to it—either $900,000, if the project is in a targeted employment area (TEA), or $1.8 million if it is not. The investor must then compile an I-526 petition, in which they must document the lawful sources of their EB-5 investment capital, as well as justify the TEA status of their project, if they are investing the lower amount of $900,000. Throughout the investment period, the investor must keep their investment capital at risk and, at the end of their two-year conditional permanent residency period, prove that their EB5 investment created at least 10 new full-time jobs for U.S. workers.

Whether an investor lives in the United States or another country, they have two choices for their EB-5 investment: direct or via an EB-5 regional center. The regional center route is the more popular option, as it allows investors to benefit from the extensive experience and expertise of the regional center operators and relaxes the job creation requirements by allowing indirect and induced jobs to count toward the 10 necessary jobs.

Adjusting Status to EB-5

After a domestic EB-5 investor’s I-526 petition is approved, they may file Form I-485 with United States Citizenship and Immigration Services (USCIS) to adjust their status from their nonimmigrant visa to an EB-5 green card. This is a much quicker and easier process than what overseas investors face—EB-5 applicants filing from abroad must submit a DS-260 to the U.S. embassy or consulate in their country and undertake a visa interview before receiving their EB-5 visa. Some domestic applicants adjusting their status may also have to undertake a visa interview, but it’s not required in all cases.

It can take some time for USCIS to process an I-485 petition to adjust immigration status, but domestic EB-5 investors have options to increase their freedom while they wait. By filing an I-131 petition, a domestic EB-5 investor can obtain authorization to travel internationally and return to the United States while their I-485 is pending. Similarly, an I-765 petition allows an investor to obtain employment authorization, enabling them to work freely in the United States as they await their permanent resident card. An I-765 petition may not be necessary for H-1B visa holders who plan to maintain their job, but it may be indispensable to an investor who graduates from a U.S. college on an F-1 visa.

All around the world, foreign nationals rely on the EB-5 Immigrant Investor Program to pursue a new, promising life in the United States for themselves and their immediate family members. U.S. permanent resident status for an EB-5 investor and their family offers invaluable benefits, such as facilitated enrollment at U.S. colleges, state-of-the-art health facilities, and the ability to live, work, and study freely anywhere in the United States, and all that is available through a one-time, largely passive EB-5 investment.

EB-5 investors can opt to either funnel their EB-5 investment capital directly into the new commercial enterprise (NCE) or work with an EB-5 regional center to pool their capital together with other investors and inject it into larger projects. Making an EB5 investment through a regional center offers a number of advantages that render it by far the preferred path of EB-5 investors. For example, not only can regional center investors leverage the deep EB-5 knowledge and expertise of the regional center operators, but they can also generally satisfy the managerial requirements simply by signing on as a limited partner, and they can include indirect and induced jobs toward the job creation requirement.

Since an EB-5 regional center is a commercial entity, it will require fees from EB-5 investors. The freedom and facilitated EB5 investment process that regional centers offer is well worth spending the extra funds, but this also makes it crucial to conduct careful due diligence before selecting a regional center. Making an EB-5 investment through a regional center is a major step—but with proper research, it could be one of the best investments a foreign national makes in their future.

Points to Consider When Choosing a Regional Center

EB-5 regional centers are commercial entities approved by United States Citizenship and Immigration Services (USCIS) to manage and facilitate EB5 investments. They gain approval for a particular geographical area, such as a state, and may sponsor projects within that area. Most regional areas primarily sponsor projects that qualify for targeted employment area (TEA) designation, as TEA status allows investors to invest half the minimum EB-5 investment amount (i.e., $900,000 instead of $1.8 million).

When looking for a regional center to invest through, a prospective EB-5 investor should look into the backgrounds and experience of its managers. Checking the track record of the regional center is also particularly important—how many projects has the regional center sponsored in the past? How many investors have received I-526 petition approval? How many have received I-829 petition approval? How many previous investors have had their investment capital returned at the end of the investment term?

There are certain questions an investor should also ask when considering a specific EB-5 project sponsored by a prospective regional center—has the regional center worked with this project developer before? Have they sponsored any similar projects before? Don’t forget to look into the project developer, too, examining their track record, experience, management, and more.

Reach out to the regional center and ask all the questions you want to their team. If the regional center is reputable, they’ll be happy to answer your questions and provide any documents you might request to determine their legitimacy.

Resources for Researching Regional Centers

An EB5 investment is a major journey, and it’s important that investors undertake all the necessary precautions prior to jumping into an EB-5 investment. Conducting all regional center–related due diligence at the regional center itself isn’t sufficient—investors should branch out and consult third-party resources as well.

USCIS

If an EB-5 regional center doesn’t have USCIS approval, it isn’t a regional center. Verify whether a prospective regional center is approved by USCIS by checking out USCIS’s comprehensive list of approved regional centers.

Better Business Bureau

The Better Business Bureau can also be a resource for prospective EB-5 investors looking for the right regional center. Simply search the name of a regional center to see its rating as well as comments and complaints from clients.

Local Departments of Buildings

While local Department of Buildings can’t provide insight into a regional center, they can help an investor determine whether a specific project is suitable for EB5 investment. The majority of regional centers work with commercial real estate projects, so an investor can simply locate the address of the development project (or ask the regional center team for it) and plug it into the Department of Building website for that region. These websites can offer information such as the owner of the property, the general contractor for the development project, and any permits or violations that have been issued.

We’ve put together a list of the Department of Buildings websites for some of the biggest U.S. cities:

• New York
• Los Angeles
• Chicago
• San Francisco
• Atlanta
• Miami

Participants in the EB-5 Immigrant Investor Program are often concerned about United States Citizenship and Immigration Services (USCIS) processing times—and for good reason. Their immigration plans, and those of their immediate family members, are effectively on hold until their permanent residency status is confirmed.

Unfortunately, the estimated processing time ranges provided on USCIS’ official government website can be misleading and difficult to understand. The time it takes to process applications can fluctuate depending on factors like the number of applicants and service center productivity. It’s normal to have to wait two to three years between making a qualifying EB-5 investment and receiving conditional permanent residency status.

A better way to assess how long you’ll have to wait for your petition to be accepted is by looking at the historical processing data. These provide you with median processing times for each visa form for each year.

This article explains what factors affect form processing times, how USCIS reports processing data, and how to reduce your form processing time.

 

What Impacts USCIS Productivity?

The productivity of USCIS and the Investor Program Office (IPO) tends to fluctuate based on leadership changes. There was a particularly notable decline in 2019 and 2020 under the leadership of Sarah Kendall.

The number of EB-5 petitions submitted by investors and the resources available to USCIS processing centers also impact the organization’s productivity.

Thankfully, EB-5 processing times are beginning to stabilize. This is down to two main factors:

• USCIS is back to full strength after the COVID-19 pandemic and is working through the subsequent backlog.
• The Reform and Integrity Act of 2022 introduced several measures to allow new applications to be processed quickly.

How Does USCIS Report Processing Times?

USCIS publishes two figures that indicate processing times:

• The time it took to process 80% of applications over the last six months. The latest figure for any visa type can be found on the official government Check Case Processing Times page. This figure isn’t particularly helpful, as most investors will have their petitions processed much faster. However, it ensures investors have realistic expectations of how long their applications may take to process.
• USCIS historical processing times. USCIS publishes historic data on the median processing time over the course of a year for each form type. The median represents the midpoint of processing times, with 50% of applications processed faster and 50% processed slower than the median. The figure for the current year is based on the data collected thus far.

The two figures combined give some indication of how long investors may have to wait. Here’s the latest processing data, as of November 2023:

Form	Historic median processing time	80% of all petitions over the last 6 months processed within:
I-526: Immigrant Petition By Alien Entrepreneur	50 months	55 months
I-485: Application to Register Permanent Residence or to Adjust Status (employment-based visa)	8.6 months	Depends on local USCIS offices
I-829: Petition by Investor to Remove Conditions on Permanent Resident Statu	49.4	67 months
I-924: Application For Regional Center Designation Under the Immigrant Investor Program	22.1*	N/A

*The data for Form I-924 is from 2021. At the time of writing this article, no new data was available.

When reading processing data, it’s worth considering that:

• Around 50% of investors are likely to have their forms processed quicker than the median processing time
• Around 20% are likely to have to wait longer
• Extreme outliers can increase the “time it took to process 80% of applications” figure

The graph from 2019 below helps to illustrate this. It shows USCIS I-829 processing times for Q1 of that year. According to historical data, the median processing time for 2019 was 25.9 months. However, we can see that a large number of cases were completed in a shorter amount of time.

It also shows that one petition took up to 78 months to process. This is likely to have been a complex case. For example, there may have been questions over whether the applicant posed a national security risk.

I-526 and I-829 processing times are getting longer

Unfortunately, median processing times for Forms I-526 and I-829 have increased in recent years. I-485 normal processing times have remained roughly consistent.

The increase in waiting times for Forms I-526 and I-829 isn’t the result of USCIS not processing petitions quickly. In fact, earlier this year, USCIS reported an 83% increase in processing efficiency for I-526E and I-526. The cause of the problem is more likely that the number of new investors filing an application petition or request increased in the last year.

How Fast Is Form I-526E Processed?

USCIS has yet to release specific data on I-526E processing times. However, we’ve seen I-526E petitions for projects in rural TEAs gaining approval in less than three months. In our experience, most of these petitions take an average of six months.

This suggests that I-526E petitions will be processed quicker than standard I-526 forms. Note that there may still be a processing delay if problems with your application arise.

As mentioned above, investors in rural TEA projects may be able to get I-526E approval in less than 12 months, as they now qualify for priority petition processing under the RIA.

Also, while investors from China and India were previously forced to experience significant delays due to their country’s backlog of EB-5 applications, they can now avoid these delays by investing in a TEA project.

What Causes Slow Processing Times?

Slow processing times could be due to issues with your petition or at USCIS, including:

• High numbers of petitions being submitted, meaning USCIS takes longer to process new applications
• A visa backlog experienced by the investor’s home country
• The investor hasn’t filled in their form correctly
• The investor has broken an immigration regulation or the law
• USCIS discovered evidence that the investor represents a national security concern

How to Speed Up Your Form Processing Time

EB-5 investors have very little control over USCIS processing times. There are, however, things you can do to speed up the process:

File Form I-829 at the right time

Form I-829 should be filed within 90 days before your two-year conditional Green Card expires. If you leave it until after your conditional residency expires, your ability to gain a permanent residency card will be jeopardized. It will also be rejected if you file it more than 90 days before the expiry date.

Fill all documentation and evidence correctly

To get each petition approved, you need to fill it out in full and provide concrete evidence to support it. For example, Form I-829 requires evidence that your investment has created 10 full-time jobs. Gaps in documentation or poor evidence could lead to your form being rejected or slow down its processing time.

Work with a regional center

There are several ways that working with a regional center will help speed up processing time for EB-5 forms. Examples include:

• Exemplar projects: Regional centers can submit exemplar project proposals. Once an exemplar is approved by USCIS, the project section of I-526E forms for applicants investing in that project will automatically be accepted.
• Support with forms: Regional centers work closely with USCIS, therefore, they know what a good petition looks like. They can help investors fill out forms and provide the right evidence.
• Documenting job creation data: Regional centers document job creation data on behalf of their investors.

Expedite your petition

You can ask for some forms to be expedited. However, you need to have a specific, compelling reason. These include:

• Severe financial loss
• Humanitarian or emergency reasons
• A non-profit organization has requested it because it will benefit the United States’ cultural or social interests
• It’s in the interest of the United States government
• Errors made by USCIS

USCIS Processing Times: Conclusions

The EB-5 Immigrant Investor Program is an ideal way for foreign nationals to gain a Green Card by investing in a USCIS-approved project. But long processing times can be a worry—especially when it affects your family’s immigration plans.

Our advice is to assume that your application could be delayed when making your immigration plans. This way, you and your family will have a plan in place if complications arise. Once you gain permanent residency status, you can apply to become a U.S. citizen by submitting an application for naturalization.

For more information on EB-5 processing or to get help filing your petitions, get in touch with EB5AN. We’ve helped hundreds of EB-5 investors to gain permanent residency status in the U.S. Book a free consultation and discover how we can do the same for you.

One of the key issues that has plagued the EB-5 Immigrant Investor Program in the late 2010s has been the emergence—and continued deepening—of EB-5 backlogs. Backlogs are not unique to the EB-5 program—rather, they’re due to a United States Citizenship and Immigration Services (USCIS) policy that restricts annual visa allocation based on country of citizenship. All countries have equal limits, regardless of size or demand, and when the quota is reached for nationals of a given country, pending applicants must wait until the next fiscal year. Regarding EB-5 investments, the biggest countries are China and Vietnam, which, as of June 2021, both face backlogs.

The Chinese backlog surfaced in 2014, when the EB-5 was gaining increasing traction in China and the rest of the world. China has long dominated the program, many years accounting for around 80% of all investors. Unfortunately for applicants of Chinese nationality, this has resulted in exceedingly long wait times, with new EB-5 investment participants from China told to expect wait times of seven or more years as of June 2021.

In 2018, after months of speculation, Vietnam joined their northern neighbors in USCIS’s monthly Visa Bulletin. However, while EB-5 demand in Vietnam is evidently strong, it doesn’t compare to the spiraling wait times faced by Chinese EB5 investment participants. Vietnamese investors have certainly been disadvantaged compared to those from most other countries, but the Vietnamese backlog has never reached the depths of the Chinese one. And now, according to Charles Oppenheim, the chief of the Visa Control and Reporting Division of the U.S. Department of State, those who have made EB-5 investments from Vietnam may finally see the backlog clear up by September 2021.

The Jump in the Vietnamese Final Action Date

Considering the dismal movement in final action dates throughout 2020 and now 2021, the shock announcement has come as a surprise to many Vietnamese investors. For much of this period, the Vietnamese final action date, which stood at April 15, 2018, in the June 2021 Visa Bulletin, has only been moving forward slowly, with two months constituting a large advancement. Compared to the Chinese final action date, which had failed to advance for almost a year, the situation was rosy, but Vietnamese investors still expected a long road ahead of them to complete their EB5 investment journey.

And then, the July 2021 Visa Bulletin was released.

The Chinese final action date advanced by three weeks, but that small step forward was so overshadowed by the massive leap of the Vietnamese date that it was hardly news. In contrast, the Vietnamese final action date jumped almost two entire years to April 1, 2020. In a landscape of processing inefficiencies, worldwide public shutdowns, and remarkably slow Visa Bulletin action, this jump has come as a pleasant shock. And officials are hinting at even better news for Vietnamese investors going forward.

The Factors Behind the Vietnamese Final Action Date Prediction

Considering the shocking leap of Vietnamese final action date in the July 2021 Visa Bulletin, the idea of Vietnam achieving “current” status by September suddenly doesn’t seem so unrealistic. And it wouldn’t be the first time a country had escaped an EB-5 visa backlog—India did so in July 2020.

Vietnam’s leap forward may be attributable to two key factors. The first is USCIS’s slow processing of I-526 petitions—indeed, slowing the addition of new Vietnamese applicants waiting for visa availability helps shrink the backlog. While it may sound counter-intuitive, this is not necessarily a bad thing for the Vietnamese investors with pending I-526 petitions, either. With Vietnam stuck in a backlog, these investors will have to wait for their EB-5 visas either way, but at least if they have a pending I-526 petition, their children will be protected from aging out. If they’re simply awaiting visa availability, their children aren’t protected.

The other factor influencing Vietnam’s move is the processing abilities of the U.S. embassy in Ho Chi Minh City. In 2020, as COVID-19 ravaged the world, consular processing was shut down broadly. In 2021, as the world cautiously reopens, different countries are at different stages, and not all U.S. consulates are at equal processing capacity. Ho Chi Minh City has been pumping out the EB-5 visas to Vietnamese nationals, issuing more than 540 by April 2021 and a staggering 320 just in March 2021 alone.

In China and India, the situation is different. The consulates in Guangzhou and Mumbai, respectively, have hardly processed any EB-5 visas for people from their countries who have made an EB-5 investment. In fact, between October 2020 and April 2021, only 14 Chinese nationals and 29 Indian nationals have been recorded as being issued consular EB-5 visas.

In light of this situation, it’s likely that Vietnam will be the only country to hit the FY2021 per-country visa cap of 1,302 visas—nearly double the limit in previous years. That will likely allow the country to clear up its backlog, as predicted by Charles Oppenheim, and hopefully Vietnam will stay out of the Visa Bulletin in the future. However, even if EB5 investment participants from Vietnam face another backlog in 2022, it may not last long. The rollover of visas from the family-based visa categories in FY2022 is predicted to result in more than 20,000 visas for the EB-5 program, enabling each country to claim up to 1,441 visas. This spike could also help drive down the Chinese backlog, as long as Guangzhou starts upping its processing capacity.

Those in the EB-5 investment community have faced their fair share of challenges throughout the late 2010s and into the 2020s, including a global pandemic, but as the world begins to open up after COVID-19, the EB-5 world is being confronted with more hardships. Most pressingly, the looming sunset date of June 30, 2021, on which the EB-5 Regional Center Program has been slated to expire, is hurtling toward us, and many see EB-5 reform as the only path to salvation. Another problem in the EB-5 investment program—one that has been around since November 2019—is the new regulations enacted with the Modernization Rule, which restricted the definition of targeted employment areas (TEAs) and increased the minimum required investment amounts by 80%.

Indeed, these new rules have not been popular among EB5 investment stakeholders such as investors, developers, and regional center operators. But while most adjusted—by either making a larger EB-5 investment, tweaking the location of their project, or shifting their business model to accommodate the legislative changes—the Behring Regional Center in California and Florida EB5 Investments LLC in Florida chose to file lawsuits.

Lawsuits Against the EB-5 Modernization Rule

Filing suit simply because new regulations invalidate your business model will hardly get a regional center anywhere, especially when so many of their peers have adjusted to the changes and continue to run successful businesses. But the lawsuits do have a legitimate legal grounding. They target what the plaintiffs see as illegal finalization of the regulations, requesting the courts to vacate the rules and allow the EB-5 program to revert back to the former legislation.

When Florida EB5 Investments LLC took their case to court, they lost their motion for injunctive relief, which would halt the regulations, at least until a decision was reached on the case. As of June 2021, the courts are still adjudicating the regional center’s claim of “illegal finalization,” but until a decision is reached, the rules will stay in place.

So the Behring Regional Center jumped in, filing the same lawsuit in a different court. This time, the court was more open to the plaintiff’s arguments. The court did not grant injunctive relief during the adjudication period, but the judge did, with the plaintiff’s permission, switched the motion to a summary judgment. Under these circumstances, whatever the judge rules determines the future of the Modernization Rule regulations: if the government wins, they stay, but if the plaintiff wins, they go. And with the court requesting the government to provide suggestions for possible remedies, many in the EB-5 investment world jumped to conclusions about how the judge would rule. Rumors abounded that the Modernization Rule regulations would be overturned and the $500,000 and $1,000,000 EB5 investment amounts would be back.

Mayorkas’s Interjection

Unfortunately, the case is not that simple. For one thing, there has yet to be an official ruling, and legal cases tend not to be quick. For another, the government is clearly in favor of the updated regulations.

The plaintiff’s argument rests on the idea that the Department of Homeland Security (DHS) did not have a Senate-confirmed secretary at the time the legislation was ratified. The rationale is that the person who ratified the regulations was an “acting secretary,” not a Senate-confirmed one, and the law states that actions taken by an acting secretary may not be ratified. The argument further claims that at the time of ratification, the “acting secretary” position was not filled by the person who was next in line to fill it, invalidating the position entirely.

So, what did the newly Senate-confirmed head of DHS, Alejandro Mayorkas, do in response to the lawsuit? He simply ratified the regulations, throwing an unexpected wrench into the case. And in response to this sudden plot twist, the Behring Regional Center’s lawyers, in turn, filed a pleading in which they claimed the government cannot protect the regulations retroactively to shut down the lawsuit. As of June 16, 2021, the court has yet to issue a ruling on this pleading.

The EB-5 Regional Center Program Reauthorization Conundrum

While many EB-5 investment stakeholders would be thrilled to see the Modernization Rule regulations overturned, most are focusing their attention on the looming sunset date of the EB-5 Regional Center Program. As the window to act gets ever smaller, the EB-5 community is increasingly embracing the EB-5 Reform and Integrity Act—as imperfect as it may be—as a key tool to procure reauthorization for the regional center program, the lifeblood of the EB-5 program. And that’s why the Behring Regional Center’s controversial lawsuit seems so strange—under circumstances where the very regional center program itself is under existential threat, this particular regional center continues to push forward with a lawsuit to overturn previously enacted rules. The lawsuit would have no impact on the standing of EB-5 Regional Center Program reauthorization—the efforts seem misplaced during this period of EB-5 crisis.

On June 22, 2021, Judge Jacqueline Scott Corley of the U.S. District Court of the Northern District of California (the “Court”) issued an order granting summary judgment in Plaintiff’s favor in the matter of Behring Regional Center LLC V. Chad Wolf, et al.

In summary, Plaintiff sought both (1) a declaratory judgment that the Final EB-5 Rule (changing the minimum investment amount from $500K to $900K among other changes) which went into effect on November 21, 2019, is without force and effect, as well as (2) an injunction barring Secretary Mayorkas from reinstating the Final EB-5 Rule absent compliance with the APA’s rule-making process.

The Court granted relief on the first item and issued remand with vacatur – essentially invalidating the Final EB-5 Rule. However, the Court declined to grant Plaintiff an injunction barring Secretary Mayorkas from reinstating the Final EB-5 Rule absent compliance with the Administrative Procedure Act’s (APA) rulemaking process. Therefore, the Court has set aside the Final EB-5 Rule and has remanded the matter back to the agency (Department of Homeland Security).

Although the Court did invalidate the Final EB-5 Rule, it is highly likely that Secretary Mayorkas will take action to reinstate the Final EB-5 Rule as the Court declined to grant Plaintiff an injunction barring Secretary Mayorkas from reinstating the Final EB-5 Rule absent compliance with the APA’s rule-making process.

To view the full order granting summary judgment, please click here.

“We are very pleased by the Judge’s ruling,” said Sam Silverman, managing partner of EB5AN. “Many qualified and deserving foreign investors were excluded from the EB-5 program when DHS improperly increased the minimum investment amount. Our team is excited about this news and proud to offer Saltaire St. Petersburg Phase II (Loan) for immediate subscription at a reduced investment of $500,000. However, serious EB-5 investors need to act quickly because the window of opportunity is likely to be short, potentially closing on June 30, 2021, the current sunset date of the EB-5 regional center program.”

An administrative action by DHS Secretary Alejandro Mayorkas to reinstate the rule, or legislative action by the U.S. Congress, could return the minimum investment amount to $900,000 within days. Therefore, an unprecedented short period of time exists for foreign nationals seeking U.S. residency to invest at the reduced $500,000 investment threshold.

Saltaire St. Petersburg Phase II (Loan) is a low-risk EB-5 visa investment in a high-rise luxury condominium in downtown St. Petersburg, Florida. The project is being developed by KOLTER, one of the largest private real estate developers in the United States. Construction is underway and all project financing is in place, and over 75% of the condominium units are already sold with non-refundable cash deposits. An EB-5 visa investment in Saltaire St. Petersburg Phase II (Loan) is secured by a parent-entity repayment guaranty and all investors receive an I-526 early release guaranty.

Investors seeking additional information or needing to speak with an experienced EB-5 immigration attorney about immediately submitting an I-526 petition should send a message to info@eb5an.com.

It’s been a while since a monthly Visa Bulletin from United States Citizenship and Immigration Services (USCIS) has offered the EB-5 investment community good news of any magnitude. The three-week jump in the Chinese final action date in the June 2021 Visa Bulletin was good news, but only because the Chinese final action date hadn’t budged in close to a year before that. Under normal circumstances, a three-week move would hardly warrant celebration. The fact that predictions had assumed the Chinese final action date would not move until at least October 2021 did, however, make the advance more impressive.

The Chinese final action date moved ahead two months in the July 2021 Visa Bulletin, suggesting continued movement forward may once again become the norm for EB5 investment participants from China. However, this time, Vietnam has stolen China’s spotlight. Indeed, a two-month advancement pales in comparison to a two-year leap forward.

That’s right—two entire years. Unless the figure in the July 2021 Visa Bulletin is a typo, the final action date for EB-5 investment participants from Vietnam has sped ahead by an astonishing two years, taking the final action date from April 15, 2018, in the June 2021 Visa Bulletin to April 1, 2020, in the July 2021 bulletin. And if that weren’t enough of a shock, the chief of the Visa Control and Reporting Division of the U.S. Department of State has more good news for Vietnamese investors: he expects Vietnam to achieve “current” status by September 2021.

July 2021 Visa Bulletin, Chart A

In Chart A of the July 2021 Visa Bulletin, “01APR20” is printed clearly in the EB-5 row of the Vietnam column. Broken down, this means April 1, 2020. To Vietnamese EB-5 investors, who have been suffering from delays and long processing waits for three years, this may seem unbelievable, but there it is, clear as day. Effectively, any Vietnamese national who made an EB-5 investment between April 2018 and April 2020 is now eligible to receive their conditional U.S. green card and begin their life in the United States—with predictions of the door soon opening for the remainder of Vietnamese investors.

The Chinese final action date has also moved ahead, this time by two months. This is a higher pace than in the June 2021 bulletin, which saw the first movement in the Chinese date for close to a year. The EB5 investment community celebrated alongside Chinese investors when the final action date finally moved, and the July 2021 bulletin indicates that forward momentum may become the new normal for Chinese investors.

The final action dates for those who have made an EB5 investment through an EB-5 regional center stand out in the July 2021 bulletin—all values are “U.” “U” stands for “unauthorized,” with USCIS taking into account the uncertain status of the program going into July. The EB-5 Regional Center Program is set to expire on June 30, 2021, unless it secures reauthorization from Congress, and many EB-5 investment stakeholders fear reauthorization will be contingent on program reform. With less than two weeks to go, reform has still failed to be enacted, and the EB-5 community is growing increasingly anxious as the sunset date nears. Industry experts note that the U.S. government is unlikely to let such a valuable program expire permanently, but a temporary suspension could be in the cards, presenting investors with unwelcome delays in their EB-5 investment journey.

July 2021 Visa Bulletin, Chart B

Unfortunately, the movement in the EB-5 final action dates has not been reflected in the dates for filing. Chinese EB-5 investment participants have built up such a massive EB-5 backlog that many have to wait just to file their application for an EB-5 visa following I-526 petition approval. The Chinese date for filing has remained at December 15, 2015, for more than a year, and though changes in the date for filing will inevitably follow final action date progress, the momentum has clearly not been sufficient yet. Chinese investors waiting to file their EB-5 visa applications must continue to sit tight.

Interestingly, the regional center values in Chart B are not “U” for unauthorized but the same as those for direct EB-5 investors. While this is probably just an administrative oversight, hopefully it indicates a continued future for the EB-5 Regional Center Program.