The need for reform has long been noted in the EB-5 Immigrant Investor Program community, but action has been slow. Ever-lengthening processing times have plagued the program since roughly 2014, when the infamous Chinese backlog was born. The EB-5 Regional Center Program, which allows foreign nationals to make an EB-5 investment through an approved regional center instead of directly in the new commercial enterprise (NCE), remains a temporary program subject to continual reauthorization. The public image of the economy-boosting residency-by-investment program is abysmal, with laypeople associating the program with the few stories of fraud that have preoccupied the media. All these issues can be solved with EB-5 reform, and that’s precisely what the EB-5 Reform and Integrity Act aims to do.

The EB-5 Reform and Integrity Act, drafted by bipartisan senatorial duo Chuck Grassley (R-IA) and Patrick Leahy (D-VT), has been on the table for several months, particularly entering the limelight following the divorcing of the EB-5 Regional Center Program from the omnibus funding bill it has traditionally been renewed alongside. With the regional center vying alone for reauthorization before its sunset date of June 30, 2021, industry leaders fear reform is the only way to secure the program’s future. Termination of the popular program could be disastrous for EB5 investment participants, and it would significantly impact the EB-5 program’s ability to foster the U.S. economy, spelling bad news all around.

On March 18, 2021, Grassley and Leahy finally officially introduced their reform bill to Congress. With this, the gears have been set in motion to finally reform the EB-5 investment landscape. Following the introduction, EB-5 industry trade association Invest in the USA (IIUSA), which has been rallying for the bill on the belief that it is the only way to achieve reauthorization, voiced its support for the bill.

Industry Leaders Optimistic

Grassley and Leahy have worked alongside IIUSA to draft the bill, which addresses various problem areas in the EB-5 program. If all had gone according to plan, the bill would have been introduced in December 2020 as part of the federal omnibus budget, but since the bill was unfinished at the time, its inclusion was ultimately impossible. With the EB-5 program given a sunset date of June 30, 2021, the clock is ticking, and the time to enact reform is growing smaller—which is why the EB5 investment world has been relieved to hear of the bill’s formal introduction in Congress.

The primary concerns of the bill revolve around integrity, security, and transparency, tightening anti-fraud regulations and better protecting the interests of honest, good-faith EB-5 investment participants, project developers, and regional centers. More stringent security measures would also improve the program’s public image and help the program combat its demonization in the press. The legislation the bill has laid out would provide these necessary protections while simultaneously allowing the program to prosper and continue to pour billions of foreign capital into the U.S. economy—a win-win.

Another key issue the bill addresses is long-term reauthorization for the regional center program. If the EB-5 Reform and Integrity Act passes, it will reauthorize the EB-5 Regional Center Program through 2026. While not permanent reauthorization, a five-year reauthorization would do wonders for the short-term future of the EB-5 program, with foreign nationals able to comfortably make EB5 investments without fear of sudden regional center program termination.

The coming of a new month once again brings a new Visa Bulletin from the U.S. Department of State—Bureau of Consular Affairs. With fiscal year 2021 more than halfway over, United States Citizenship and Immigration Services (USCIS) has still done little to use up the more than 18,000 visas allocated to the EB-5 Immigrant Investor Program for FY2021, with the Chinese final action date not budging for the entire duration of the fiscal year thus far. Whether USCIS will use the once-in-a-lifetime surge of visas available for EB-5 investment participants remains to be seen, but the current situation looks bleak. If, however, the Biden administration’s proposed U.S. Citizenship Act of 2021 comes to pass, USCIS programs will retain the allocated visas they failed to issue in a given fiscal year, safeguarding this uptick of EB-5 visas.

Indeed, the extra visas are unlikely to benefit Chinese EB5 investment participants. The Chinese final action date has failed to budge since September 2020, and according to a statement from Charles Oppenheim, the chief of the Visa Control and Reporting Division at the U.S. Department of State, Chinese EB-5 investors shouldn’t expect movement for the rest of FY2021. Calculations from November 2020 indicated a queue of about 6,000 Chinese nationals—primary EB-5 investment participants and their eligible family members—with I-526 approval and a current final action date awaiting an EB-5 visa. Oppenheim stated around the same time that he expected only around 3,000 EB-5 visas to be issued to Chinese nationals in FY2021, meaning final action date movement for the world’s most populous country is unlikely in FY2021.

As expected, the April 2021 Visa Bulletin places the Chinese final action date at August 15, 2015, for the eighth month in a row—and hitting the unfortunate one-year milestone is predicted. Chinese EB5 investors trapped in this processing limbo should keep an eye on the progress of the U.S. Citizenship Act of 2021, which proposes a comprehensive overhaul of the U.S. immigration system, including the removal of country-based visa limits, the retention of allocated yet unissued visas, and the exemption of eligible family members from the primary visa pool of employment-based immigration programs. This bill could redefine the EB-5 landscape and the position of Chinese EB-5 investors within it—but without the bill, Chinese EB-5 investment participants are in for a long wait.

Fortunately, Vietnamese investors are in a better position. While still subject to a backlog, unlike Indian investors, who escaped this burden in July 2020, Vietnamese investors can rejoice in the almost two-month jump of their final action date from October 22, 2017, to December 15, 2017. This leap represents the most sizeable EB-5 final action date advancement in several months and indicates a much brighter situation for Vietnamese EB-5 investment participants yet to achieve a current final action date than for their Chinese counterparts.

In terms of dates for filing for EB-5 applicants, only Chinese nationals are affected—in fact, China is the only country that has been impacted by a date for filing backlog in the EB-5 program’s more than 30-year history. While those waiting for final action date advancement have already submitted their visa application and are simply awaiting approval, Chinese EB-5 investors with a priority date later than December 15, 2015, are not even permitted to submit their EB-5 visa applications.

The Chinese date for filing has remained in place since March 2020, when the rapid international spread of the COVID-19 virus initially shut down the world. It’s already been more than a year since the date advanced, but as long as the Chinese final action date stays put, so too will the Chinese date for filing. With the final action date expected to remain at August 15, 2015, for at least the rest of FY2021, the date for filing is similarly expected to stay at December 15, 2015, at least until October 2021.

2020 was not a good year for participants of the EB-5 Immigrant Investor Program. It was not a good year for most inhabitants of the planet, as public life began to shut down and people were confined to their homes indefinitely. With shutdowns, lockdowns, and border closures, those who had made an EB-5 investment and were in queue to finally receive U.S. permanent resident status suddenly found their new life in the United States unattainable, with U.S. embassies and consulates temporarily ceasing routine visa services. Domestically, United States Citizenship and Immigration Services (USCIS) closed its offices to in-person traffic in the early stages of the pandemic, and the Trump administration enacted a year-long ban on most forms of employment-based immigration. It was a bad year for hopeful foreign nationals looking to forge a better life in the United States.

Most years, the country-based statistics of EB-5 visa issuances offers insight into what countries represent the highest levels of EB-5 demand, what share of investors from a particular country opt for EB-5 regional center investment, and how many EB5 investment participants from a specific nation obtained their EB-5 visa through domestic adjustment of immigration status rather than overseas consular processing. In 2020, the statistics are more representative of who was lucky enough to obtain a U.S. green card despite the mass shutdowns and processing bottlenecks due to the COVID-19 pandemic.

Adjustment of Status EB-5 Visas Issued

With consular processing effectively shut down for much of 2020, the door was left wide open to process I-485 petitions from domestic EB-5 investment participants to change their U.S. immigration status. With Charles Oppenheim, chief of the Visa Control and Reporting Division at the U.S. Department of State, declaring in November 2020 the existence of around 2,500 pending I-485 petitions just for Chinese applicants, theoretically, USCIS could have processed a maximum number of pending I-485 petitions to salvage as many allocated EB-5 visas as possible. But in practice, the immigration body failed to even meet FY2019 figures of adjustment of status EB-5 visa issuance.

I-485 processing for Chinese and Indian nationals was up, but only slightly. Across the board, other countries saw drops—such as Brazil, which fell from 214 in FY2019 to a measly 36 in FY2020. Overall, the number of adjustment of status EB-5 visas issued in FY2020 was lower than in the three preceding fiscal years, down 26% from FY2019. The percentage of adjustment of status visas among all EB-5 visas issued in FY2020 was indeed higher than previous years, but that was due to the overall lack of visas issued for EB-5 investments in FY2020.

So, what prevented the mass issuance of adjustment of status EB-5 visas in FY2020, when consular visas were all but impossible to grant? Given Oppenheim’s previous remarks, a depression in demand seems implausible. Rather, USCIS’s snail-paced processing speed is likely to blame, with slow Visa Bulletin movement the likely culprit behind the low number of Chinese EB5 investment participants receiving visas. EB-5 visa issuance has been on a downtrend trend since a high in FY2018, so the abysmal figures cannot be solely attributed to COVID-19.

Steep Drop in Overall EB-5 Visa Issuance

The pandemic’s dramatic effect on the EB-5 program can be seen in the overall number of EB-5 visas issued. Although the EB-5 program had more than 11,000 visas earmarked for it in FY2020—more than the previous three fiscal years—it issued little more than 3,500, letting almost 7,500 visas go to waste. EB-5 investment visas issued through consular processing dropped by 69% to around 2,400, while I-485-based visa issuance fell by 26% to around 1,100. The loss of 7,500 visas was offset by the massive gain at the beginning of FY2021, when unused family-based visas were recycled through the EB programs, granting the EB-5 program upwards of 18,000 visas—but with the pandemic still raging on in March 2021, whether those EB-5 visas will actually be granted in FY2021 remains to be seen.

EB-5 Visa Issuance in FY2020 by Country

As usual, Chinese EB5 investment participants topped the country list in FY2020, accounting for more than 46% of all EB-5 visas issued in the fiscal year. India and Vietnam also accounted for sizeable portions, at 17% and 13%, respectively, and South Korea was next in line at just 4%.

EB-5 investment through a regional center remained the overwhelming favorite of EB-5 investors, with 91% of those lucky enough to receive an EB-5 visa in FY2020 having affiliated with a regional center. Of the 15 countries that saw more than 20 EB-5 visas in FY2020, two—Mexico and Japan—had no direct investors at all. Others, like Russia or the UAE, had only two. Direct investment seemed more popular among Iranian investors, however, with 14 out of 54 Iranian investors having made a direct EB5 investment.

Most interesting is the breakdown of visas issuance through consular processing versus adjustment of status petitions. Despite the total shutdown of consular processing throughout half of FY2020, it nonetheless accounted for more than half of all EB-5 visa issuances in the 15 major EB-5 countries, with the exception of Venezuela. In Iran, consular processing represented a whopping 96% of EB-5 visa issuances, which suggests that almost no Iranian nationals received an EB-5 visa in the latter half of FY2020. Even though USCIS was effectively unable to issue consular processing EB-5 visas for several months, the agency apparently could not muster the capacity to dole out adjustment of status EB-5 visas in their stead.

The 2,400-odd EB-5 visas issued in FY2020 through consular processing are likely to have been distributed between October 2019 and February 2020, before the world shut down due to the COVID-19 pandemic. If the pandemic hadn’t struck and USCIS had continued processing at the same pace, the yearly total still would have only come to around 5,000, plus another maybe 1,500 resulting from approved I-485 petitions. At roughly 6,500, this still would have been the lowest number of issued EB-5 visas among the three years preceding FY2020, meaning EB-5 investment stakeholders would be wrong to direct all their ire toward the pandemic and its containment measures. Clearly, there also lies a problem with USCIS’s processing practices, independent of the pandemic.

As advantageous as the EB-5 Immigrant Investor Program is for foreign nationals looking for a permanent life in the United States, the slow, inefficient processing practices at United States Citizenship and Immigration Services (USCIS) can cause major headaches for EB-5 investment participants, particularly those from backlogged countries. The program has been plagued with problems since FY2019, with the COVID-19 pandemic only compounding existing issues. While Indian EB-5 investors experienced a monumental clearing of their backlog in July 2020, the backlogs have remained for Chinese and Vietnamese investors. In fact, with the addition of Hong Kong EB5 investment participants following Beijing’s implementation of the controversial Hong Kong national security law, China’s EB-5 backlog has grown even larger.

USCIS’s lackluster efforts in I-526 petition adjudication are understandably off-putting to foreign nationals considering making an EB-5 investment, particularly if they hail from China or Vietnam. However, investors hoping to gain permanent residency rights in the United States would be wise to not write off this popular residency-by-investment program just yet—pending legislation could be a game-changer for the EB5 investment world.

How the U.S. Citizenship Act of 2021 Can Benefit the EB-5 Program

Immigration-friendly President Biden may not have the EB-5 program specifically in mind with his proposed overhaul of the U.S. immigration system, but the sweeping changes his administration is looking to enact could change the landscape of the program and revitalize lost interest among prospective EB5 investment participants. The bill contains a myriad of provisions that would tighten up the U.S. immigration system as a whole, and among them are three important proposals that could finally eliminate EB-5 backlogs.

Eliminating Country-Based Caps on Visa Issuance

As of March 2021, the EB-5 program is subject to a country-cap restriction that limits the number of visas that can be issued annually to recipients of a given nationality to a mere 7%. Putting aside the fact that this system ignores differences in population and demand, with the same figures reserved for China and Andorra, the restrictive rules discriminate based on nationality and force honest EB5 investment participants into processing limbo through no fault of their own. If the country caps were done away with, the backlogs may largely disappear.

Fortunately for Chinese and Vietnamese EB-5 investors, Biden seems to agree that the system is unfair. One of his proposals is the elimination of the country-cap system, which would free up thousands of investors to finally receive the EB-5 visa they earned long ago. With no more country caps, the need for investors to redeploy their EB-5 investment capital may also be reduced, lessening financial risk and allowing investors to have their capital repaid more quickly.

Exempting Families from the Visa Pools

One of the key motivations of EB-5 investors is to forge a better life for their children in the United States, including by sending them through the U.S. public school system or securing higher chances of college admission for them. Even if this isn’t one of the driving factors to make an EB5 investment, investors would hardly move to the United States if it meant leaving their spouse and dependent children behind. So don’t worry—this proposal isn’t suggesting families be disallowed from claiming green cards in relation to an EB5 investment.

But the addition of family members on most EB-5 petitions eats away at the available EB-5 visas for a year, which typically clocks in at around 10,000. Estimates have put the number of visas going to primary investors at a little over 3,000, with the rest being taken by family members. If family members were exempted from the pool, as the U.S. Citizenship Act of 2021 proposes, they would still receive permanent residency rights, but their visas would not be taken out of the pool of EB-5 visas, meaning the program could grant visas to roughly 10,000 primary investors per year. This would roughly triple the program’s output capacity, driving down backlogs and wait times.

Reclaiming Historically Unused Visas

The EB-5 program’s underutilization in its early years could also constitute a boon to those with active EB5 investments in 2021. Though the residency-by-investment program was born in 1990, it failed to gain significant traction until the 2010s, regularly issuing fewer than 500 EB-5 visas annually. With the capacity to issue about 10,000 visas each year, tens of thousands of EB-5 visas have been lost throughout the years.

If the U.S. Citizenship Act of 2021 comes to pass, the EB-5 program can reclaim the tens of thousands of visas it failed to distribute in its first two decades. This move alone could clear up the EB-5 program’s lengthy backlogs, and combined with the above two initiatives, backlogs could remain a relic of the past for the foreseeable future of the EB5 investment program. Though not specifically focused on the EB-5 program, the U.S. Citizenship Act of 2021 is just what is needed to reinvigorate the program and attract new EB-5 investment capital from foreign nationals seeking a better life in the United States.

Though most foreign nationals who participate in the EB-5 Immigrant Investor Program do so from their home country, a number of applicants make their EB-5 investment from within the United States. These investors already hold valid non-immigrant visas—such as a student visa or an H-1B work visa—and use an EB5 investment to obtain permanent residency rights in the United States, allowing them to stay indefinitely even after their original visa expires.

Whereas overseas EB-5 investors apply for their U.S. green card through the National Visa Center and their local U.S. embassy or consulate, those already residing in the United States forgo the visa interview process and simply file Form I-485 to adjust their U.S. immigration status. Of course, since immigration is always a complicated process, the adjustment of status process also comes with a mountain of bureaucracy, and traditionally, foreign nationals wishing to change their U.S. immigration status have also been required to submit Form I-944.

What Is Form I-944?

Form I-944, clocking in at a whopping 18 pages, was introduced in February 2020 by United States Citizenship and Immigration Services (USCIS) to be filled out by any foreign national requesting an adjustment of their status. The form, meant as a declaration of self-sufficiency, was intended to show that the applicant would not burden the U.S. social welfare system. It therefore required a library of documents regarding the foreign national’s finances and assets, rendering the otherwise simple adjustment of status application complicated and time-consuming.

The Trump administration expanded the legislation to encompass a larger number of social welfare benefits, including Medicare and federal housing assistance, but the expansion was met with a deluge of lawsuits that alleged a federal law violation. The result was the blocking of the legislation, which the Trump administration filed an appeal against. However, on March 9, 2021, before the U.S. Supreme Court could consider the appeal, the Biden administration announced its stance against the appeal. In fact, it also announced the complete elimination of Form I-944 for adjustment of status applicants. With the U.S. government no longer defending the regulation, the Supreme Court dismissed the numerous pending appeals, so now, foreign nationals looking to adjust their immigration status need not worry about the declaration of self-sufficiency.

The Advantages for EB-5 Investors

Given that an EB5 investment requires a minimum of $1.8 million (or the lower investment amount of $900,000, if the project is in a targeted employment area, a.k.a. TEA), the average EB-5 investor would be unaffected by the I-944 petition. An individual with the means to engage in an EB-5 investment should hardly be affected by this ruling—or at least, that’s what many think.

But in fact, many EB-5 investors are not investing their own wealth but rather EB-5 investment capital donated by relatives. For example, a popular path for many foreign investor parents is to gift their child the required sum to make an EB5 investment, meaning the investor has enough funds to participate in the program but may not have a lot of money outside of this gift. This scenario is particularly popular for international students in the United States, and the previous I-944 requirement led to a hairy situation for students who had, for example, applied for health care subsidies through a state health insurance marketplace.

Student EB-5 investment participants can breathe a sigh of relief with the Biden administration’s announcement of the elimination of the I-944 requirement, as it makes their path to an EB-5 visa dramatically simpler. As of March 9, 2021, I-485 petitions are to be filed without Form I-944, and if an adjustment of status applicant has already filed an I-944 petition, USCIS will disregard it in its adjudication.

Throughout most of its more than 30-year history, the EB-5 Immigrant Investor Program has leaned on the ever-popular EB-5 Regional Center Program to help guide foreign nationals through the EB-5 investment process and maximize the job creation potential of the program while protecting investors’ interests. Given the overwhelming success of the regional center program and the economic stimulation it has provided to the United States, it may surprise prospective investors to learn that the regional center program has not been made permanent. Instead, it is subject to continual reauthorizations from Congress, which can cause headaches for EB5 investment stakeholders.

Traditionally, the regional center program has been extended in conjunction with a wider government spending bill, which has all but guaranteed its reauthorization. That has changed with Congress’s December 2020 decision to divorce the popular program from the spending bill, setting an EB-5 Regional Center Program sunset date of June 30, 2021. Without the security of the larger bill to back it up, the regional center program must now stand on its own merits to gain reauthorization—and industry leaders fear it will fail without EB-5 reform.

Fortunately, bipartisan duo Senators Chuck Grassley and Patrick Leahy have proposed the EB-5 Reform and Integrity Act, which proposes a wide range of reform measures for the EB-5 program, including strengthening security and anti-fraud measures, more stringently protecting investors’ interests, and reauthorizing the regional center program through 2024. The downside of the proposed legislation is that it could usher in stricter application requirements, making it harder for new applicants to initiate an EB5 investment. But there’s still time left until June 30, 2021: if you manage your time carefully, you can submit your I-526 petition before the June 30 deadline.

Identify a Reputable Regional Center

It’s not mandatory to make an EB-5 investment through a regional center, but it is recommended due to the numerous advantages regional center investment offer. Specifically, with a regional center investment, EB-5 applicants can enjoy a higher level of freedom, involving themselves in the management of the new commercial enterprise (NCE) simply by signing on as a limited partner. Even more importantly, those with EB5 investments through regional centers can count indirect and induced jobs in their job creation calculations, making it easier to obtain a U.S. green card.

The access to highly experienced EB-5 experts with a duty to maximize investors’ chances of immigration success cannot be understated, either. This makes selecting a reputable, trustworthy EB-5 center imperative. When browsing regional centers, reach out and ask their staff a wide array of questions to ascertain the quality of the organization.

Hire an Immigration Lawyer

Attempting the EB-5 investment process without an EB-5 immigration attorney is highly unadvisable. Hiring an immigration lawyer is recommended even for those making their EB5 investment through a regional center—and not just any immigration lawyer will do. Given the specific, complicated legislation surrounding the EB-5 program and its fundamentally different nature from conventional immigration programs, an EB-5 investment necessitates the expert advice of an immigration attorney specialized in EB-5 immigration. When looking for an EB-5 immigration lawyer, ask questions regarding the length of time they’ve served in the EB-5 industry, how many EB-5 investors they have represented in the past, and their track record of approved I-526 and I-829 petitions.

Gather Documentation for the I-526 Petition

An I-526 petition, which is the first petition an EB5 investment participant files with United States Citizenship and Immigration Services (USCIS), requires not only personal information about the investor and any accompanying family members but also data on their chosen EB-5 project and their EB-5 capital. Most daunting for most EB-5 investors is the requirement to prove that their EB-5 funds were obtained lawfully, which can be a time-consuming and intensive process, especially if an investor must trace funds back several years. In some cases, the investor may no longer possess the applicable documentation, requiring them to request it from companies or government bodies.

Working with an EB-5 immigration attorney throughout the source-of-funds process is particularly crucial, as an experienced EB-5 lawyer understands what USCIS is looking for and which of an investor’s available fund sources will be easiest to demonstrate. The advice an immigration lawyer provides could be critical in the document-gathering stage of I-526 preparation. Given the complexity of sourcing one’s legally obtained funds, EB-5 investors who wish to apply before June 30, 2021, should start working on their applications immediately.

Calls for reform to the United States’ popular residency-by-investment program, the EB-5 Immigrant Investor Program, have grown louder and more numerous over the years, especially as United States Citizenship and Immigration Services (USCIS) issues continue to accumulate and EB-5 backlogs grow ever longer. EB-5 investment stakeholders have become particularly vocal about the need for EB-5 reform in light of the June 30, 2021, sunset date of the EB-5 Regional Center Program, which is in danger of termination if the industry fails to enact sufficient reform.

EB-5 reform is necessary for a number of reasons—the interests of honest investors and project developers must be protected, while malicious actors and fraudulent activity must be detected and eliminated. Strengthened integrity measures could improve the public image of the EB-5 program, which is routinely dragged through the dirt by the media. EB5 investment stakeholders have also been pushing for permanent or at least long-term reauthorization of the regional center program to safeguard the EB-5 program’s job-creating and economy-stimulating capabilities further into the future.

But those aren’t the only reasons—according to Senator Guy Reschenthaler, a Republican representative in Pennsylvania, reform is necessary to curb national security vulnerabilities that can be exploited by the United States’ foreign adversaries, especially China.

How the Chinese Communist Party Could Exploit the EB-5 Program

The massive EB-5 demand from Chinese investors has long been a hallmark of the program, which has only in the late 2010s started to see more diversity in the nationalities of investors. In fact, between 2015 and 2018, roughly 80% of the EB-5 visas available each year—around 10,000—have been issued to Chinese nationals. This in itself is not suspicious: China houses the world’s largest population, and a Chinese national can hardly be blamed for the desire to escape China’s authoritarian government.

However, according to a letter penned by Reschenthaler and fellow Republican senator Jim Jordan on June 15, 2020, evidence of possible Chinese Communist Party (CCP) abuse of the EB-5 program has been mounting. The CCP may be pursuing EB-5 investments as a simple and relatively quick means of obtaining U.S. permanent resident status for its members, undermining U.S. national security. The letter requested a U.S. Government Accountability Office (GAO) investigation into the extent of the abuse by the CCP.

With U.S. green cards, CCP members could move freely about the United States, covertly infiltrating everyday U.S. society. Under this cover, spies could steal intellectual property and state secrets, undermine U.S. democratic processes, and more. The inadequate integrity measures of the EB-5 program as of March 2021 constitute a warm invitation to CCP members and other malicious actors who wish to interfere with the U.S. way of life.

How EB-5 Reform Could Strengthen National Security

EB-5 reform could introduce improved resources and standards for detecting exploitation by nefarious actors, especially the CCP, better thwarting attempts from foreign adversaries to infiltrate the United States. USCIS already has the ability to evaluate an EB5 investment petition for national security concerns, but regardless of their findings, they cannot then deny a petition solely on national security grounds. This oversight in EB-5 integrity, which leaves the door open to abuse and could undermine the security of the United States, must be addressed in EB-5 reform.

More funding for USCIS would also go a long way in protecting the national security interests of the United States in EB-5 investment matters. Like many businesses and individuals alike, USCIS suffered financial hardship in 2020 and even announced its intent to furlough more than 13,000 employees—more than 70% of its workforce. Fortunately, emergency funding saved these jobs and kept the immigration body afloat, allowing USCIS to plough forward with adjudications.

But USCIS’s financial uncertainty remains. The agency has struggled to gather the necessary funds to support its work, even though a thriving USCIS is critical to U.S. national security. In addition to reform to the EB-5 program, proper funding and support for USCIS is crucial to maintaining secure borders and identifying fraud or malicious actors while remaining a welcoming beacon to ambitious immigrants worldwide. A well-funded and -equipped USCIS is also beneficial for EB-5 investment participants, as it allows the agency to process I-526 petitions more expediently.

EB-5 reform has already been proposed—Senators Chuck Grassley and Patrick Leahy are pushing a bill that would introduce widespread changes to the EB-5 program, including strengthened integrity measures, stronger protections for honest EB5 investment participants and project developers, and long-term reauthorization for the regional center program. While some industry leaders have voiced concerns that the proposed reform doesn’t go far enough, it’s a strong start, and it’s just what the EB-5 world needs.

Lengthy processing times for I-526 petitions (the first visa petition filed by EB-5 investors) have long plagued the EB-5 Immigrant Investor Program, leaving qualified investors in limbo for years waiting for their conditional permanent resident status. For those unfortunate to hold a passport from a backlogged country—as of January 2023, China and India—waits are even longer.

Despite the ever-growing processing delays, United States Citizenship and Immigration Services (USCIS) has done little to address inefficiency, instead focusing on staying afloat amid financial difficulties.

The long processing times have been turning prospective participants away from pursuing an EB-5 investment, and it’s understandable—the time and effort required for an EB5 investment may not be worth it if an investor is satisfied with Canada’s or Australia’s residency-by-investment program or if they have children in danger of aging out of eligibility for a U.S. Green Card.

However, in 2023, the situation is looking up for EB-5 processing times, and it may just be the perfect time to jump into an EB-5 investment.

The EB-5 Immigrant Investor Program

The EB-5 Immigrant Investor program is one of the fastest and most reliable ways to receive a U.S. Green Card. In exchange for one passive qualifying investment, a foreign investor, their spouse, and all unmarried children under the age of 21 can receive permanent resident status in the United States.

The minimum EB-5 investment in a new commercial enterprise (NCE) or job-creating entity (JCE) is $1,800,000. If the chosen EB-5 project is located in a targeted employment area (TEA), meaning a rural area or an area of high unemployment, then the minimum investment is lowered to $800,000.

Through the EB-5 program, the immigrant investor and their eligible family members can live, work, and study anywhere in the United States without restriction, and without an employer or educational visa sponsor. They can even apply for U.S. citizenship after holding a Green Card for five years.

What is an I-526 Petition?

An I-526 or I-526E petition is essentially an investor’s “application” to qualify for the EB-5 immigrant visa process. This form, along with much supporting documentation, is to prove that the investor has made the minimum EB-5 investment in a qualifying new commercial enterprise (NCE) and that the NCE used their lawfully-sourced EB-5 capital to create a minimum of 10 full-time jobs for U.S. workers.

The EB-5 Reform and Integrity Act of 2022 split the formerly unified EB-5 immigrant petition into two separate petitions, depending on the nature of the foreign national’s capital investment:

• Form I-526, Immigrant Petition by a Standalone Investor, is for direct EB-5 investors.
• Form I-526E, Immigrant Petition by a Regional Center Investor, is for immigrant investors who pool their investment with other EB-5 investors through a USCIS-approved regional center.

A significant 94% of successful EB-5 Green Card applicants are regional center investors, according to a recent study of USCIS processing data.

Direct investors may only count W-2 employees of the NCE towards their job creation requirement. Regional center investors may count both direct employees and indirect jobs sustained through econometric modeling.

Once an immigrant investor’s I-526 or I-526E petition is approved, the investor, their spouse, and all unmarried children under the age of 21 will receive a two-year U.S. Green Card, granting them conditional permanent resident status in the United States.

Conditional permanent resident status lasts for two years. During this time, investors may live, work, or study anywhere in the United States. Their EB-5 investment must remain “at-risk” and the 10 or more jobs created must be sustained for a minimum of two years.

What is an I-829 Petition?

During the last 90 days of the two-year conditional permanent resident status, an immigrant investor’s immigration attorney files their I-829 petition with USCIS.

• Form I-829 is a petition to remove conditions from an investor’s conditional Green Card, and grant them full permanent resident status in the United States.

In order to do this, investors must compile supporting documentation to prove that their lawfully-sourced EB-5 investment actually did create and sustain 10 or more full-time jobs for U.S. workers, and that the investment itself did remain “at-risk” the entire time, as planned in the investor’s I-526 petition.

Once the I-829 petition is approved, an investor, their spouse, and all unmarried children under the age of 21 will receive full U.S. Green Cards, granting permanent resident status in the United States.

Immigrant investors may live, work, or study anywhere in the United States, without restriction, permanently. They will also have the option to become a U.S. citizen, only five years after establishing conditional permanent residency.

Estimated Processing Times Don’t Match Historical Average Processing Times

USCIS publishes up-to-date and historic processing times for nearly all forms associated with the EB-5 program on its website. However, those who aren’t familiar with how USCIS presents its data should be warned: these processing times may not mean what you think.

When an investor first searches for current I-526 processing times on the USCIS website, they will come across this number “58.5 months”, current as of January 2023.

This is not the average processing time. This is not the median processing time. This number represents the time it took to process 80% of all I-526 petitions adjudicated in the previous six months.

On the USCIS website, the historic I 526 processing time data section shows the median number of months it took USCIS to adjudicate all I-526 petitions. The median means the point by which 50% of the petitions were adjudicated.

As of January 2023, the median number of months it took to process I-526 petitions for FY 2023 was 47.2 months, or just under four years from the date of submission.

This means that half of all I-526 petitions were adjudicated in less than that time. It also means that, for many investors, the I 526 processing time is even significantly shorter than the median number.

When a prospective investor sees 47.2 to 58.5 months listed as the estimated processing times for an I-526 petition, they may lose motivation to make an EB5 investment. But the estimated processing time range is misleading for numerous reasons, the first being that the majority of I-526 petitions are processed outside the range.

Indeed, the lower number indicates the time by which 50% of petitions are adjudicated, while the higher number shows the time by which 80% of petitions are processed. If the estimates are 100% accurate, that leaves only 20% of petitions processed as long as or longer than this time range, with 50% processed sooner than indicated.

Thus, even without changes to the EB-5 program, an investor’s petition has a high chance of being adjudicated far before they might expect. But changes are likely to come to the EB-5 program—changes that could significantly speed up the EB5 investment process and the efficiency of the Immigrant Investor Program Office.

EB-5 Reform in Congress

The COVID-19 pandemic, and the subsequent global and governmental shutdowns, had an outsize impact on EB-5 processing times. The already increasing processing rates for EB-5 petitions skyrocketed due to the months-long consular shutdowns.

The EB-5 Reform and Integrity Act of 2022, passed and signed into law on March 15th, 2022, brings many welcome reforms to the EB-5 program. This bill was a bipartisan partnership, meaning it is an act of Congress that has support from members of both of America’s two major political parties, the Republicans and the Democrats.

The bill seeks to both preserve the legal integrity of the regional center program and reduce processing times back to their pre-pandemic levels. To that end, Congress has allowed concurrent filing of I-526 petitions and I-485 petitions to adjust immigration status. This will reduce the need for an additional form processing wait time—and consular processing—for those foreign nationals already legally residing in the United States under another visa, such as the H-1B.

The bill also asks for an additional fee of $1000 from regional center investors, money which goes to the U.S. Treasury’s sovereign fund to pay the adjudication of EB-5 visas. With more money, more adjudicators can be hired, speeding up processing for all.

Biden’s Proposed USCIS Reform

The EB-5 Reform and Integrity Act isn’t the EB-5 program’s only shot at reform in 2023. The Biden administration has also proposed an overhaul to the U.S. immigration system as a whole.

Inside a Biden-backed bill titled the U.S. Citizenship Act of 2021 were provisions to accelerate processing for all visas, including the EB-5 immigrant visa, as well as various proposals that would result in more visas available to EB-5 investment participants.

For example, the bill endeavored to recapture unused visas and reuse them in the same program the next fiscal year instead of rolling them over to other programs. This could prove crucial for the EB-5 program to retain the thousands of extra visas allocated to it in FY2021.

Another proposal—one that would see spouses and dependent children exempted from employment-based visa quotas—would free up thousands of EB-5 visas annually that would otherwise be claimed by investors’ immediate family members.

For Chinese investors, who may hesitate to make an EB-5 investment given the massive backlog of Chinese EB-5 petitions, Biden’s proposed USCIS reform offers important changes. One of them is a mandate for USCIS to clear its many lengthy backlogs, which could finally end the years-long wait Chinese EB5 investment participants have been subject to.

A second change is the abolishment of country-based limitations, which would free up countless EB-5 visas for investors from China, Vietnam, and other high-population, high-demand countries.

Beat the Rush: The Best Time to Invest Is Now

Though only one of these bills has so far passed into law, the best time to make an EB-5 investment is before the next one is passed.

Although the U.S. Citizenship Act of 2021 did not pass Congress in its original form, the bill’s very existence points to a greater strategy in both the Biden administration and Congress as a whole, towards reopening and even expanding avenues to legal immigration in the U.S., and reducing processing wait times for all immigrants, including the EB-5 program.

It is clear that, though these additional reforms would not directly reform aspects of the EB-5 program, the changes they would bring would have a massive positive effect on the EB-5 industry was the Biden administration to continue its commitment to reduced processing times.

Considering the massive, wide-reaching, and positive effects these proposed changes would have on the EB-5 industry, enactment of either one (or, better, both) could see a flood of new I-526 applications, and those who beat the rush would clearly be in a preferable position.

The outlook for new EB-5 applicants may look bleak, given the data. But the reality is that the pandemic has been impacting processing times with the EB-5 program, and Congress has now taken steps to fight back.

With a combination of accelerated processing times and a larger supply of EB-5 visas, investors may receive their U.S. permanent residency rights far more quickly than expected.

Start your family’s Green Card journey today by contacting EB5AN at info@eb5an.com or scheduling a free consultation.

Hot off the heels of a tumultuous 2020, which saw a mere 114 new applicants to the EB-5 Immigrant Investor Program, 2021 is ramping up to welcome far more immigrant investors to the famed residency-by-investment program. Many of these new EB-5 investment participants are living in the UAE, but not necessarily as citizens. The bulk of the U.S. immigrant hopefuls are Indians and Africans with abundant liquid assets looking to secure permanent resident status in the United States.

New applications to the EB-5 program have steadily fallen since a peak in 2015, when 14,737 EB5 investors and their families took the first step toward a new life in the United States. Various factors since have caused a drop, with 2020 taking the crown for the least new EB-5 investment applications in recent years. Similarly, the factors driving the surge in EB5 investment demand in 2021 are also many.

Why Was EB-5 Demand Down in 2020?

The year 2020 is poised to become synonymous with “COVID-19 pandemic” as we hurtle through to the future. The EB-5 industry was certainly among those in the path of chaos the pandemic left in its wake, with worldwide U.S. embassy and consulate service suspensions effectively halting the EB-5 investment process for countless investors. The pandemic contributed to the fall in EB5 investment interest in 2020, both due to investors consciously deciding to wait until the pandemic subsided as well as shutdowns and lockdowns preventing investors from initiating the process.

COVID-19 was not the sole factor driving the low demand in 2020, however. Another key demotivator for would-be EB-5 investment participants was the Modernization Rule, enacted in November 2021, which pushed up the minimum required investment amount by a whopping 80%. Overnight, the lowest acceptable amount for an EB-5 investment in a targeted employment area (TEA) jumped from $500,000 to $900,000, with the minimum amount for non-TEA investments rising from $1 million to $1.8 million. EB-5 investors rushed to file their I-526 petition before the rule went into effect, resulting in a deluge of applications in October and November 2020 but hardly any in the months following. Demand has subsequently sunk simply due to the numerous applicants who can no longer afford to make an EB5 investment.

Internal issues with United States Citizenship and Immigration Services (USCIS) also resulted in diminished numbers of new investors in 2020. The backlogs were as long as ever, with China, Vietnam, and India impacted at the dawn of 2020. Though the Indian backlogs cleared up in July 2020 and the Indian final action date has remained current ever since, the long wait times at the beginning of the year intimidated new Indian EB-5 investment participants. Furthermore, given USCIS’s utter lack of productivity in adjudicating I-526 petitions, some investors decided the program wasn’t worth the delays and headaches.

Why Is EB-5 Demand Up in 2021?

Just as the reasons for the EB-5 demand depression in 2020 are numerous, so too are the reasons for the surge in 2021. Though the pandemic rages on, the world has begun to acclimatize, and more investors are willing to dive into an EB-5 investment despite COVID-19. But lockdown fatigue isn’t the only reason foreign investors are flocking to the EB-5 program in 2021.

One important factor is the transition of power from the Trump administration to the Biden administration. Whereas Trump was known for his harsh-on-immigration stance, President Biden is seen as far friendlier toward immigrants, and his administration has even released a list of proposed changes to the U.S. immigration system, most of which would be favorable for EB-5 investment participants. The friendlier immigration environment in the United States is conducive to more I-526 filings.

However, the primary reason foreign nationals are choosing to embark on an EB5 investment journey in 2021 is the EB-5 Regional Center Program’s sunset date of June 30, 2021. Historically, the regional center program was bundled up with a broader government spending bill that was automatically renewed upon the approval and passing of a new budget, but Congress divorced the program from the bill when it reauthorized it in December 2020. This leaves the EB-5 Regional Center Program vying for reauthorization on its own and presents the very real threat of termination.

The Possibility of Regional Center Program Termination

The possibility that the popular regional center program will be terminated is more real than ever, but there is hope—namely, in the form of the EB-5 Reform and Integrity Act introduced by Senators Chuck Grassley and Patrick Leahy. If the bill is passed, it will strengthen integrity measures in the EB-5 program to better protect investors, root out fraudulent activity, and reauthorize the EB-5 Regional Center Program through 2024.

Industry leaders see reform as the only viable path to reauthorization. While confidence is high that the bill will be passed, the possibility of termination still looms, and if the program were terminated, it would effectively nullify the ability of many foreign nationals to invest in a permanent life in the United States. As more and more prospective investors learn of the looming sunset date, they rush to file their I-526 petition before it arrives. The EB-5 Regional Center Program will likely be safe, but foreign nationals pursuing permanent residency rights in the United States shouldn’t count on that—making an EB-5 investment before June 30, 2021, is the wisest option.

Anyone who wishes to immigrate to the United States by making an EB-5 investment under the EB-5 Immigrant Investor Program must set the process in motion by filing Form I-526 with United States Citizenship and Immigration Services (USCIS). The program is fairly straightforward, offering foreign investors U.S. permanent resident status in exchange for a qualifying EB5 investment that fulfills certain requirements, including a minimum required investment amount and the creation of at least 10 full-time jobs for U.S. workers.

After conducting careful due diligence to select the most suitable project and EB-5 regional center, an investor should transfer their EB-5 investment capital to the designated escrow or project account and file an I-526 petition with USCIS to obtain their U.S. conditional permanent resident status. Upon I-526 approval, the foreign investor may submit an application for a green card.

How Long Does It Take to Prepare an I-526 Petition?

Every EB5 investment is different, and consequently, every I-526 petition requires different documentation and information. Preparing an I-526 petition can be a lengthy process, taking weeks or months, depending on an investor’s circumstances, so starting early could be a wise decision.

The informational part of the I-526 petition is generally straightforward—investors must input personal information about themselves and any accompanying family members as well as information about their investment and the EB-5 project. The time-consuming portion is the document-gathering phase, which, depending on the EB-5 investment, can be a highly involved process.

Necessary documentation includes identifying documents for the investor and any accompanying family members, as well as proof that the EB5 investment capital was transferred to the project or a designated escrow account. While most investors have no problem presenting these papers, the lawful-source-of-funds requirement represents a much more challenging task. All EB-5 investors must prove that their investment capital was derived from lawful sources, whether from employment or a business, loans, the sale of assets, inheritance, or even a gift from relatives. Depending on the source, these documents may be difficult to gather, which is why EB-5 investors are advised to consult an experienced EB-5 immigration lawyer to determine the best sources of funds to use.

Finally, if any of the documents an investor encloses with their I-526 application are not in English, they must provide certified translations as well.

What Else Can Delay the Preparation of an I-526 Petition?

Lengthy document preparation isn’t the only thing that can derail the progression of an I-526 petition. To begin with, even if an investor is eager to relocate to the United States as quickly as possible, it’s crucial to take the time to conduct careful due diligence on any prospective EB-5 project and regional center to ensure it’s operated by seasoned professionals and can satisfy the investor’s objectives. An investor should read the project documentation carefully to understand the terms and conditions of their EB5 investment as well as their position and responsibilities in the new commercial enterprise (NCE).

If the project is in a targeted employment area (TEA)—and EB-5 projects affiliated with regional centers usually are—the investor must submit additional documentation justifying the TEA designation of the area. TEA projects are eligible for a lower minimum required investment amount: $900,000 instead of the regular $1.8 million. Whether the investor is working with a high-unemployment or rural TEA, they must provide USCIS-accepted documentation for their $900,000 EB-5 investment to be approved.

Finally, delays can occur even after I-526 submission—in fact, they may even be likely. USCIS is notoriously slow at processing EB-5 applications, leaving investors to wait for two to even five or six years, depending on their country of citizenship. No matter how quickly an investor completes and submits their I-526 petition, they may still face substantial processing delays.

Hire an Immigration Attorney and Start Early

The best course of action for EB-5 investors is to hire a reliable EB-5 immigration lawyer to guide them in their I-526 preparation process. An immigration attorney can not only help an investor select a suitable EB-5 project and conduct meticulous due diligence but also guide them through the I-526 preparation procedures, including identifying the easiest sources of funds to provide. Starting early will minimize delays and help EB-5 investors secure their new life in the United States that much faster.