With 2020 finally wrapping up after throwing curve ball after curve ball to the entire world, it’s a good time to stand back and take stock of what has happened in the EB-5 industry in 2020. As of December 17, 2020, United States Citizenship and Immigration Services (USCIS) has not released detailed data on petition processing for the latter two quarters of FY2020. However, the statistics for the first half of the year are available, and they paint a distinctive picture for I-526, I-829, and I-924 petitions.

The good news is for EB-5 investment participants with I-829 petitions: I-829 processing volumes have increased, demonstrating the obvious intent of the Immigrant Investor Program Office (IPO) to prioritize I-829 petitions over I-526 petitions. I-526 petitioners find themselves in altogether different circumstances, with the IPO prolonging the slow processing volume it sustained in FY2019. To accompany the low processing figures, I-526 petitioners also experienced record-high estimated processing times, although actual processing times seem to be lower than USCIS’s estimates.

The situation is not so rosy for I-924 petitioners, either. Ever since the Modernization Rule went into effect on November 21, 2019, EB-5 regional centers have faced a tumultuous environment, with USCIS issuing terminations left, right, and center. The added challenge of the COVID-19 pandemic and the subsequent shutdowns made FY2020 a brutal year for regional center operators. With the virus still looming in the air even as 2020 comes to a close, FY2021 isn’t off to a great start, either.

The full picture of FY2020 for EB-5 regional center owners and I-924 cannot be known until USCIS releases the data for the second half of the year, but the figures for the first two quarters were already dismal. With rampant regional center terminations and astonishingly high estimated processing times, the EB-5 regional center landscape could be affected for years to come.

Mass Terminations Bring Regional Center Numbers Down to 2014 Levels

The Modernization Rule encompassed some modifications surrounding the designation of targeted employment areas (TEAs), which had the profound effect of disrupting EB5 investment activity at regional centers across the United States. Lack of investor activity is grounds for termination, and USCIS had no shortage of termination letters to distribute to EB-5 regional centers in 2019 and 2020.

Regional center terminations were increasing even before the Modernization Rule took effect, with regional center numbers falling since 2018. But the starkest decline was after November 2019, with USCIS terminating 140 regional centers and approving none between November 2019 and October 2020. The total number of EB-5 regional centers, which amounted to 646 in October 2020, was down 20% from FY2019 figures.

Most EB-5 regional centers terminated in FY2020 had been approved in FY2015 and FY2017. Given that USCIS tends to terminate regional centers with no investor activity for three to five years, it stands to reason that most were terminated due to lack of investor activity. It is clear, then, that foreign nationals interested in participating in the EB-5 program should carefully vet regional centers before entrusting one with their EB-5 investment capital

Extreme Fluctuations in Processing Times for I-924

The troubles for EB-5 regional centers stem from not only rampant terminations but also the overwhelming lack of new approvals. In March 2019, the estimated processing times for I-924 petitions were steady at 16.5–21.5 months, where they had rested for more than a year prior. But then, they suddenly started shooting up, until they reached a whopping 62–115.5 months in November 2019, when the Modernization Rule went into effect. For reference, that’s 5.1–9.6 years just to gain approval for a regional center.

While estimated processing times did fall back down from their peak at 115.5 months, they never returned to pre-April 2019 levels. With heavy fluctuations from November 2019 to October 2020 taking the estimated processing time range everywhere from 14.5 months to 115.5 months, predicting processing times for I-924 petitions has effectively become impossible. Most months bring strong fluctuations in either direction, so prospective regional center owners are left in USCIS limbo with no indication of when they can actually begin operations. But perhaps it doesn’t matter, because USCIS did not adjudicate I-924 petitions favorably in FY2020 anyway.

As 2020 winds to a close, the world remains volatile and unpredictable. COVID-19 vaccines are in the works, with the first doses having already been administered in the United States and a handful of other countries, but the pandemic rages on, threatening to keep public life heavily restricted for the foreseeable future. The EB-5 Immigrant Investor Program has not escaped the effects of the pandemic and the associated lockdowns, with temporary suspensions at U.S. consulates and embassies blocking countless foreign investors from claiming the U.S. green cards their I-526-approved EB-5 investments have earned them.

The situation for EB5 investment applicants with pending I-526 petitions is hardly any better, with I-526 processing volumes continuing their downward spiral under Immigrant Investor Program Office (IPO) chief Sarah Kendall. Simultaneously, the estimated processing times for I-526 petitions jumped to unprecedented highs in FY2020, frustrating those with active EB5 investments and discouraging future participation in the program.

FY2020 wasn’t such a bad year for I-829 petitioners, however. I-829 adjudications rose despite the dramatic downturn of I-526 processing, granting many foreign nationals with a successful EB-5 investment their coveted U.S. permanent resident status even in the midst of the most severe pandemic since the Spanish Flu.

High Adjudication and Approval Rates for I-829 Petitions

In contrast to the low I-526 processing volumes, FY2020 saw a jump in I-829 adjudications, surging to 1,229 total I-829 petitions adjudicated and positioning FY2020 as the year with the third-highest I-829 processing volume in its first two quarters since FY2012. This represents a 62% increase over the same period in FY2019, which still saw more I-829 petitions processed than the average since FY2012. The consistently high approval rate for I-829 petitions was also maintained in FY2020, clocking in at 95% for the first two quarters.

The situation in the latter two quarters is unknown as of December 17, 2020. In July 2020, USCIS published a policy memo about redeployment, which directly affected how I-829 petitions are adjudicated. The impact of this policy change will become evident in the latter half of FY2020 and in FY2021, but the EB-5 industry could see I-829 approval rates suddenly falling in the second half of FY2020.

I-829 Estimated Processing Time Range Grew Wider

It’s difficult to predict how long it will take USCIS to adjudicate an I-829 petition. The IPO’s actions in FY2020 make it clear that the organization is prioritizing I-829 petitions over I-526 petitions, but with its snail-like pace under Kendall’s direction, processing times may not have actually decreased since Julia Harrison ran the IPO in FY2018. In January 2020, the estimated processing time range for I-829 petitions was 21–45.5 months, but by October 2020, the range had risen to 35–56 months, despite USCIS’s clear focus on I-829 petitions. Additionally, the range growing wider leaves room for more unpredictability in I-829 processing times. Processing statistics from the latter two quarters of FY2020 and beyond will reveal how the changes to redeployment policy have affected I-829 processing and may offer an indication of the direction processing times will take in the future.

Since 1990, the EB-5 Immigrant Investor Program has provided a relatively quick and simple pathway for foreign investors to obtain U.S. green cards for themselves, their spouse, and their unmarried children younger than 21. Even throughout the turmoil of 2020, with much of the United States shut down due to the COVID-19 pandemic, the program has pattered along, infusing new bouts of foreign EB-5 investment capital into the U.S. economy. But the EB-5 program hasn’t been without its fair share of strife in 2020—from the threat of a massive United States Citizenship and Immigration Services (USCIS) furlough to demonization and unfounded claims of fraud from U.S. senators, the EB-5 program needs help to turn around, improve its image, and continue creating new jobs for U.S. workers.

Senators Chuck Grassley (R-IA) and Patrick Leahy (D-VT) have long formed a bipartisan partnership to improve and promote the EB-5 program, serving as living proof of the immigration program’s ability to cross party lines. The two senators have worked tirelessly to strengthen integrity without stifling the program and optimize the benefits that EB5 investment capital can bring to the United States while offering foreign investors and their family members promising new lives in the land of the free. To this end, Senator Grassley has introduced Bill S.2540 – EB-5 Reform and Integrity Act of 2019 to the Senate, cosponsored by Senator Leahy.

What Does Bill S.2540 Propose?

In brief, the EB-5 Reform and Integrity Act of 2020 proposes measures to increase EB-5 program integrity, clamp down on fraud, and reauthorize the ever-popular EB-5 Regional Center Program through 2025. Under the proposed bill, those qualified to make EB5 investments and regional centers operating lawfully would enjoy stronger protections, while fraudsters and others engaging in illegal activities would be more stringently weeded out.

Reauthorization of the Regional Center Program through 2025

While the EB-5 program offers investors two pathways to make their EB-5 investment—direct investment and regional center investment—the majority of investors opt to invest through an EB-5 regional center. The advantages of regional center EB5 investment are manifold—for example, regional center investors are generally not required to involve themselves in the daily management of the new commercial enterprise (NCE) and may count indirect and induced jobs toward the job creation requirement, facilitating the process of obtaining U.S. permanent residency.

Despite its popularity, the EB-5 Regional Center Program is not a permanent U.S. government program, which means it is subject to frequent re-evaluations and reauthorizations. While discontinuation is highly unlikely, the program’s temporary status leaves its future uncertain. The proposed bill would see the EB-5 Regional Center Program extended through 2025, solidifying it in U.S. law for a substantial period.

Stricter Regional Center Integrity Measures

While fraud in the EB-5 program is rare, it does still exist. To more strongly combat fraud in regional centers, the proposed bill would stipulate that 10% of the jobs counted toward a regional center project’s job creation requirement be created directly. It would also require regional centers to retain records for five years and undergo an audit in five-year intervals at a minimum.

Another integrity measure targeting EB-5 regional centers is the proposal to require project-specific business plans with a prospective regional center’s Form I-924 petition. As of December 14, 2020, such inclusion is optional and constitutes an exemplar application, expediting the I-526 approval process for those who have made an EB5 investment in a previously approved project.

Perhaps most importantly in terms of fraud prevention is the preclusion of certain people from work in an EB-5 regional center, as stipulated under the proposed “bona fide requirements” of EB-5 regional center involvement. Those who have previously committed fraud offenses, have received an adverse order from a financial regulator, are inadmissible for immigration to the United States, or have been listed, reprimanded, or disciplined for fraud are not permitted to work with an EB-5 regional center.

A Second Chance at Job Creation

While the majority of EB-5 investors succeed in creating the necessary 10 jobs for U.S. workers within their two-year investment period, not all do. Those worried that their EB5 investment capital will not create all 10 jobs within two years should be cheering on Bill S.2540, as it offers investors an extra year to fulfill the job creation requirements. The same rules apply to the extra investment time as to the standard two-year investment period: the EB-5 investment capital must remain at risk for the duration of the period.

Faster Processing

The EB-5 industry has long lamented the slow processing times for EB-5 petitions, which have even been ruled unreasonably slow in court. USCIS’s snail-like pace, particularly under Sarah Kendall, chief of the Immigrant Investor Program Office (IPO), has contributed to a drop in EB-5 demand, with foreign investors instead opting to pour their capital into countries like Canada or Australia.

Bill S.2540 endeavors to bring changes to the EB-5 program’s longstanding problems with processing times. Under the proposed EB-5 reform bill, USCIS would be required to conduct a fee study no later than one year following enactment. It would then set fees at an appropriate level to carry out petition processing according the following schedule:

• 180 days for regional center designations and exemplar applications
• 90 days for regional center designations and exemplar applications in targeted employment areas (TEAs)
• 240 days for investor petitions
• 120 days for investor petitions in TEAs

A Promising Future for EB-5

Should Bill S.2540 pass, the EB-5 program will undergo significant changes that will make it more appealing to foreign investors and help it better fulfill its Congress-defined goals of stimulating the U.S. economy and creating new jobs for U.S. workers. Those with EB-5 investments would enjoy swift processing times and an extra year to meet the job creation requirement, reigniting interest in the immigration program.

The bill is only in its beginning stages as of December 14, 2020, so its future is impossible to predict. It’s worth it for EB-5 industry participants to keep an eye on this bill as it moves through the bodies of government, as the changes it can bring to the EB-5 program are significant and more than welcome.

As calendar year 2020 comes to an end, fiscal year 2020 already ended on September 30, 2020. The year constituted the most unpredictable and volatile one on record in the EB-5 Immigrant Investor Program’s 30-year history, with the COVID-19 pandemic sweeping the globe, destroying economies, and placing EB-5 investors waiting for visa interviews in limbo. The program managed to escape President Trump’s immigration ban unscathed, but while immigration based on EB-5 investment remained legal, global travel restrictions, reduced flight schedules, and the suspension of routine visa services at U.S. consulates and embassies resulted in a de facto ban.

COVID-19 wasn’t the only change the EB-5 program faced in FY2020. In April 2020, United States Citizenship and Immigration Services (USCIS) introduced the visa availability approach for I-526 processing, shifting away from the classic first-in, first-out approach it had been using since its inception. By prioritizing I-526 petitions from EB5 investment applicants whose countries of origin had immediately available visas, the approach was meant to increase processing efficiency, but it disadvantaged the heavily backlogged Chinese investors.

The enactment of the Modernization Rule on November 21, 2019, was, however, the first blow to the EB-5 program in FY2020. The Modernization Rule entailed a stark increase to the minimum required EB-5 investment amounts, with both regular and targeted employment area (TEA) investment amounts increasing by 80% to $1.8 million and $900,000, respectively. This naturally resulted in the disqualification of countless prospective EB-5 investment applicants. The Modernization Rule furthermore altered the rules surrounding TEA designation, resulting in mass terminations of EB-5 regional centers that continued throughout FY2020.

The unprecedented circumstances of FY2020 created atypical I-526 processing patterns throughout the fiscal year. In this post, we dive into the specifics to discover the full story behind I-526 processing in FY2020.

Major Increase in I-526 Filings Before Modernization Rule Effective Date

Those considering making an EB5 investment were given advance warning of the planned implementation of the Modernization Rule in November 2019. With the 80% fee increase undoubtedly rendering an EB-5 investment unviable for numerous investors, applicants rushed to submit their I-526 applications before November 21, making for a steep increase in I-526 filings in the first half of FY2020. With 4,285 I-526 petitions filed between October 1, 2019, and March 31, 2020, USCIS recorded an 80% increase in I-526 petitions compared to the same period in FY2019.

Of the 4,285 I-526 petitions filed in the first half of FY2020, a whopping 4,264 were submitted in the first quarter, comprising the period of October 1 to December 31, 2019. While a more detailed breakdown of the data is not available, we can assume that most of these petitions were filed before November 21, 2020, when the previous investment amounts of $1 million and $500,000 were still permissible. Subsequent filings were dramatically lower, likely due to both the enactment of the Modernization Rule and the onset of the COVID-19 pandemic.

I-526 Approval Rate Fell, Denial Rate Remained Steady

In the first half of FY2020, USCIS processed a total of 1,359 I-525 petitions, continuing the steep downtrend that began after Sarah Kendall’s takeover as chief of the Immigrant Investor Program Office (IPO) in FY2019. Coming off Julia Harrison’s all-time high in FY2018, Kendall’s abysmal figures were all the more disappointing, and FY2020 brought little improvement. According to the IPO, the low processing volume can be attributed to a greater focus on integrity and fresh training for I-526 adjudicators.

USCIS’s adoption of a visa availability processing approach for I-526 petitions in April 2020 could also have a positive impact on I-526 processing figures, with USCIS focusing its efforts on petitions from countries with readily available visas. But as of December 17, 2020, detailed processing statistics for the latter half of FY2020 remain unavailable. Going by the processing time data published on USCIS’s website, however, the situation does not look to have improved much.

It’s important to note that while adjudications overall have declined significantly, the denial rate has not fallen. The I-526 approval rate in the first half of FY2020 was 81%, the lowest figure since FY2016’s 76%, but the statistics prove that the approval rate is well within EB-5 norms. EB-5 investment applicants have reported increased instances of requests for evidence (RFEs) and notices of intent to deny (NOIDs), but these seem to have largely resulted in delays, not denials.

I-526 Processing Times Hit an All-Time High

With the COVID-19 pandemic wreaking havoc across the globe and I-526 processing almost grinding to a halt, the record-breaking high wait times for I-526 petitions in FY2020 should come as no surprise. One of the many shocks that FY2020 presented to the EB-5 investment industry was the sharp increase in I-526 estimated processing times in August 2020, nearly doubling from 29.5–44.5 months to 46–74.5 months. Fortunately, the range fell back down, standing at 30.5–50 months as of December 17, 2020, but the steady increase of processing times is nonetheless disconcerting.

In August 2020, USCIS also added a separate estimated processing time range for Chinese I-526 petitioners, given that their petitions are deprioritized under the visa availability approach adopted in April 2020. The Chinese processing times have remained far above those for EB5 investment participants from elsewhere, maintaining a gap of roughly two years.

Despite the unprecedentedly high processing times indicated on the USCIS website, actual processing times have been significantly quicker. In many cases, EB-5 investors received their I-526 adjudication sooner than suggested by USCIS, but the trend is still increasing. The EB-5 industry can only hold its breath and wait for USCIS to finally increase its processing capabilities.

2020 has been an unprecedented year for everyone, with almost no one on the planet left unaffected by the COVID-19 pandemic. The virus and the subsequent government measures to contain it have upturned economies, destroyed livelihoods, torn apart families, and ended lives. The EB-5 Immigrant Investor program has not escaped COVID-19’s wrath, either, as the pandemic-induced suspension of routine visa services at U.S. embassies and consulates left countless EB-5 investors stranded indefinitely with no pathway to enter the United States.

Surprisingly, the pandemic has also aided the EB-5 program in various ways. For example, the near-total shutdown of immigration also resulted in a lack of family-based visas being issued in FY2020, which saw thousands of unused visas roll over to the EB programs for FY2021. Entitled to 7.1% of all EB visas in a given year, the EB-5 program has been allocated more than 18,000 visas for FY2021 – nearly double the typical number.

With 2020 having been the most unpredictable year in recent history, it’s difficult to foresee what 2021 will bring. The COVID-19 virus still lingers in the air, threatening to further pause public life, so until an effective vaccine is widely distributed, life cannot return to normal as we know it. Below are a couple factors that could influence the EB-5 program as we tumble into 2021.

EB-5 Regional Center Program Sunset Date Fast Approaching

2020 has been the year of the unpredictable, and little would be more unpredictable in the EB-5 program than the discontinuation of the EB-5 Regional Center Program. A temporary program that has been subject to continuous reauthorizations since its debut, the EB-5 Regional Center Program allows foreign nationals to make an EB-5 investment through a qualified regional center rather than directly in an eligible EB-5 project, enabling the pooling of EB5 investment capital for maximum economic stimulation and job creation. Regional centers are heavily favored by EB-5 investors for the relative security they provide, including through relaxed job creation requirements, but until the program is made permanent, it will undergo constant review and reauthorization from the U.S. government.

On December 11, 2020, the Regional Center Program was extended by a single week until December 18, 2020. Throughout the week, Congress engaged in discussions to pass the federal funding bill in which the Regional Center Program reauthorization is included. If the bill fails to pass, a government shutdown will ensue, and the Regional Center Program may expire. Given that the bill likely includes stimulus checks and various forms of aid for struggling small businesses and U.S. workers who have lost their jobs due to the pandemic, it is a complicated matter for Congress, and it’s entirely possible that Congress will pass another short-term extension to win more time for negotiations.

COVID-19 Vaccines to Favor Developed Countries

With COVID-19 vaccines approved by major countries such as the United States, Canada, and the United Kingdom, the world can finally see the light at the end of the long, dark tunnel constructed by the COVID-19 pandemic. With these three countries having already administered their first doses of the highly anticipated vaccine, 2021 is lining up to be a better year than 2020.

However, not all countries will have equal access to a COVID-19 vaccine. While many developed countries have already purchased abundant supplies of the perceived panacea, some developing countries lack the funds and resources to secure doses for their own populations. They can take advantage of excess vaccines redistributed by developed countries and the World Health Organization, but any delays will leave a country in the economic dark longer, and developed countries will inevitably have earlier access to COVID-19 vaccines.

The United States, which leads the world in medical innovation and research, has produced five of the most promising COVID-19 vaccinations, pumping them out at record speed thanks to the billions of emergency dollars funneled into research and development. Naturally, any US-produced vaccinations will be made available to all countries to quash the pandemic globally, but only after the United States has already secured sufficient doses for its own population.

Early access to vaccinations for developed countries presents two opportunities for the EB-5 program. First, with vaccines secured and beginning to be rolled out, it’s time for countries like the United States, Canada, and the United Kingdom to unleash their economic recovery plans. In the United States, the foreign capital from EB5 investments can aid countless companies as they rebuild or help brand-new businesses gain footing in this unstable environment, accelerating the economic recovery and producing new, full-time jobs for the millions of newly unemployed Americans.

The other important role the EB-5 program can play in 2021 is benefiting foreign investors from developing countries. Countries like China, India, and Vietnam may not have the same widespread access to COVID-19 vaccines as the United States, rendering a U.S. green card all the more appealing. Investors the world over may opt to make an EB-5 investment so they can move their life to a highly developed country with the world’s leading economy, state-of-the-art medical facilities, and a strong and early recovery from the debilitating effects of the COVID-19 pandemic.

Since the dawn of United States Citizenship and Immigration Services (USCIS), most immigration programs have been subject to country caps—in other words, only a limited number of visas can be allocated to applicants from a given country in a given fiscal year. Considering the stark population differences among countries—China and Grenada are hardly comparable—this practice has unfairly disadvantaged immigrant hopefuls from high-population nations. The EB-5 Immigrant Investor Program is no different, with EB-5 investment applicants from high-demand countries facing longer wait times due to these country caps.

Every fiscal year, approximately 10,000 visas are allocated to the EB-5 program, representing 7.1% of all EB visas for that year. Among these 10,000 visas, no one country is entitled to more than 7.1%, which amounts to around 700 visas per country. Since applicants can use their EB5 investment to obtain U.S. green cards for their spouse and dependent children as well, the yearly limit of 700 EB-5 visas per country only allows around 300 to 400 immigrant investors per country to start their new, promising life in the United States.

Bill S.386 Offers Hope for Ending the Country Cap

In July 2019, the U.S. government took the first step toward eliminating the discriminatory country caps in the EB-5 program and other U.S. immigration programs by introducing Bill S.386, also known as the Fairness for High-Skilled Immigrants Act of 2019. In 2020, a new version of the bill—Bill H.R.1044 – Fairness for High-Skilled Immigrants Act of 2020—was introduced, and on December 2, 2020, it was passed in the Senate, edging ever closer to the dissolution of USCIS country-based visa limits.

Passing in the Senate is significant, but for a bill of this magnitude, it’s not sufficient to enact the changes. The bill has been sent to the House of Representatives and must gain the approval of both houses to continue. Finally, should both houses pass the bill, it will proceed to President Trump’s desk for a signature, which will officially set it in motion. With broad support from both parties and Vice-President-Elect Kamala Harris as an original cosponsor, Bill S.386 stands a promising chance of passing and ushering in the transformation of U.S. immigration.

What Does the Bill Entail?

If passed, Bill S.386 could redefine the entire EB-5 landscape. The bill would see the country caps on employment-based visas almost completely eliminated, subject to a few conditions. A percentage of the available visas would be reserved for foreign nationals not from the two countries with the largest number of recipients, which, for the EB-5 program as of December 14, 2020, are China (including Hong Kong) and Vietnam. Of the unreserved visas, no more than 85% would be allowed to go to a single country. The passing of this bill represents a significant opportunity for those from China with EB-5 investments, and further improving the situation for Chinese immigrants is the bill’s eradication of an offset that reduces the number of visas that can be issued to Chinese individuals.

If this bill is passed, it will effectively almost void the visa availability processing approach that USCIS adopted in April 2020. The visa availability approach prioritizes the I-526 petitions of applicants from countries with readily available visas and has primarily disadvantaged Chinese investors. If the country caps are removed, significantly more EB-5 visas will be available to Chinese investors, reducing their disadvantage under the visa availability approach.

The EB-5 Immigrant Investor Program is one of the most popular U.S. immigration paths for foreign investors, attracting millions in foreign investment capital to the United States each year. The EB-5 program offers investors two pathways to obtain U.S. green cards for themselves and their immediate family members: direct investment in a qualifying EB-5 program, which entails direct involvement in the day-to-day management of the new commercial enterprise (NCE), or investment through an EB-5 regional center, which relieves the investor of the burden of intensive managerial work.

By far, the regional center route is the more popular one—not only does it offer more freedom, allowing applicants to infuse EB-5 investment capital into an EB-5 project in Florida, for example, yet to settle in New York, but it also loosens the requirements for job creation, making it easier to obtain U.S. permanent resident status.

The only problem is that the EB-5 Regional Center Program is not a permanent U.S. government program. While the Direct Investment Program has been made permanent, the Regional Center Program continues to need periodical reauthorization from the U.S. government. Since its inception, the program has been granted short-term extensions through its inclusion in government funding bills.

Previously, the Regional Center Program was set to expire on September 30, 2020, but Congress breathed new life into it until December 11, 2020. Failing to negotiate funding and legislation for 2021 within the two-and-a-half-month period, Congress extended the Regional Center Program by another week until December 18, 2020, giving them extra time to work out a solution for 2021.

Given the popularity of the Regional Center Program and the efficacy of the EB-5 program in pumping EB5 investment capital into the U.S. economy and stimulating job growth in targeted employment areas (TEAs), it’s highly unlikely that the program will be discontinued. However, until the Regional Center Program is finally made permanent, the EB-5 industry will be required to keep up to date on Congress’s frequent extensions of the program.

The last two years saw H1-B visa candidates flocking to the EB-5 Immigrant Investor Program, thus creating a niche domestic market for developers involved in the EB-5 program. Part of the reason was that visa retrogression drove investors such as those from India to turn to the EB-5 program as a faster alternative route on their journey to U.S. permanent residency status. That may be changing, however.

Following the release of the October 2020 Visa Bulletin by the Department of State (DOS) in late September, there are rumblings among these niche investors. It seems they may be a bit more hesitant when considering the EB5 investment program. In large part, the shift is due to a significant date jump in employment-based EB-2 and EB-3 visa categories. The change may give the impression that extended wait times for visas are nearing an end. This is not necessarily true.

Yes, Dates for Filing (under Chart B) have vaulted. EB-3 dates, for instance, advanced from February 2010 to January 2015, while EB-2 dates jumped from August 2009 to May 2011. Yet Final Action Dates (Chart A) have advanced only by mere months. This is welcome news among India-born applicants, but there are still a number of important factors to consider.

Read on to learn more about the significance of these date advancements and to understand other key considerations when making decisions about which visa program makes the most sense for your unique circumstances.

Why These Visa Bulletin Date Advancements Are Significant

When it comes to immigrant visa processing, DOS has focused on two cut-off dates since late 2015: the Final Action Dates published in Chart A, and the Dates for Filing published in Chart B. When an applicant has a priority date that is current under Chart B, they and their eligible family members are allowed to apply for an adjustment of residency status. Upon filing their I-485 petition for adjustment of status along with an I-765 and I-131, they become eligible for unrestricted employment authorization (EAD) and advance parole (AP) for travel within 90 days. USCIS currently issues an authorization card including both employment and travel.

While a shift in dates shown in the October 2020 Visa Bulletin is significant, the most exciting news embedded in the changes is that USCIS is accepting I-485 petitions at all. In the last five years, USCIS has rarely used Chart B. The acceptance of these filings will allow new levels of flexibility among EB-2 and EB-3 applicants and their families outside of simply extending an H1-B visa for another term. How so? Within 180 days of approval, they would be allowed to change employers as long as they stay in a similar occupation.

That said, there are still important considerations for EB-2 and EB-3 applicants to make when reevaluating their immigration plans. There are a number of key issues to keep in mind.

What to Make of the Jump in Chart B

USCIS guidelines dictate that Chart B becomes available to applicants already inside the U.S. who wish to adjust their residency status only when more immigrant visas are available than there are applicants in a given fiscal year. In such an unprecedented year—a pandemic and the subsequent closures and delays in USCIS and U.S. Consulate processing on a global scale—we can only speculate that the numbers are skewed. We may see a correction or even a retrogression over the next few years as we navigate back to some sense of normalcy.

Another major contributing factor to the date changes was likely the start of the new fiscal year on October 1, 2020. This creates the possibility of stasis in the Visa Bulletin over coming months.

I-485 Applicants and Further Green Card Delays

Even as there has been significant advancement in dates under Chart B for EB-2 and EB-3 applicants, Chart A dates moved only slightly in these categories. What is certain is that the October 2020 Visa Bulletin’s Chart B allows I-485 petitions to be filed. It is also certain that each I-485 application for an adjustment of status will be placed in a queue until the applicant’s priority date is listed as current in Chart A.

From there, when an applicant’s Final Action Date is current under Chart A, a USCIS adjudicator will take up their Form I-485 to determine eligibility for permanent residency. An approval at this time signals an applicant is eligible for a green card. However, the dates in Chart A can be many years away for a significant number of applicants. In turn, so could their green cards be further delayed.

When Child Applicants Are Waiting on Chart A

USCIS guidelines also say that Chart A is what determines the date for calculating a child’s age. This means a child applicant must wait for their parents’ priority date under Chart A to reach current status before their eligibility for a green card may be determined. While the Child Status Protection Act (CSPA) does allow a child applicant under 21 to freeze their age once their I-140 petition has been filed, once it is approved, the child’s age clock begins to run again. So, when there are significant backlogs on Chart A under the EB-2 and EB-3 categories, there is an increased risk of the child aging out prior to receiving a green card.

Downgrading from an EB-2 to an EB-3 May Be Risky

It’s true, the EB-3 date under Chart B advanced five years and EB-2 dates advanced only two years. And this seems to have been a catalyst for downgrades as a strategy. While downgrading from EB-2 to EB-3 status seems to be trending among Indian nationals since these date changes, EB-2 applicants may want to think twice before making the shift. Should applications to downgrade be submitted en masse, the result is likely to be a further backlog in Chart A under the EB-3 category. Additionally, a downgrade will require a new I-140 submission, which has the potential to increase the risk for children who may be close to aging out already. Furthermore, we imagine a sudden influx of EB-2 applicants away from the program could shift dates ahead of the EB-3 category.

Proposed Increases in Filing Fees and a Flurry of Applicants

Early in the fall of 2020, USCIS announced its intentions to implement fee changes, which included increases on a number of applications and petitions. While the fee increases were delayed past the October 2, 2020 date, by the end of the month the new fee schedule was in effect. Now, an additional fee is required for Forms I-765 and I-131, which accompany an I-485 petition ($490 and $585 respectively). In light of the new acceptance of I-485 applications beginning October 1, thousands of applications poured in to beat the fee increase later in the month. This could lead to processing chaos that won’t be unearthed for months yet.

Why H1-B Candidates Should Continue the EB-5 Investment Process

Further delays in final action dates. Some immigrant applicants scrambling to downgrade from EB-2 to EB-3. Others who attempted to beat the fee increases. All of these reasons and more are good ones for EB-3 or EB-2 applicants who have chosen the EB-5 investment journey to stay the course. For Indian-born EB-5 investors with priority dates that are not close to 2009 or 2010, the EB-5 program is still the faster option.

While withdrawal may seem an attractive option right now, it is important to consider the bigger picture before shifting your path again. It could be years still before you receive an EB-2 or EB-3 green card if that is the route you take. If you still feel a change is your best option, it is always advisable to seek experienced legal counsel to ensure your immigration goals for you and your family are ultimately met.

The EB-5 Immigrant Investor Program, an employment-based U.S. immigration program established in 1990, has been offering foreign investors a valuable opportunity to obtain permanent resident status in the United States for decades. It was designed to be mutually beneficial to foreign investors and the U.S. government—in exchange for a hefty EB-5 investment in a new commercial enterprise (NCE) that results in job creation and economic stimulation, a foreign national and their immediate family members are granted permanent resident status in the United States. Given the numerous benefits of U.S. permanent residency, including easier access to world-renowned educational institutes, state-of-the-art health-care facilities, and unparalleled freedom, foreign investors from around the world have flocked to the program.

Minimum Investment Amount

The EB-5 program stipulates a minimum EB5 investment amount that investors must satisfy to be eligible for a U.S. green card. For nearly 30 years following the program’s creation, the minimum investment amount was maintained at a clean $1 million, with targeted employment area (TEA) projects qualifying for a lower minimum investment amount of $500,000. The EB-5 program then suffered a severe blow in November 2019, when the Modernization Rule came into effect and increased the minimum investment amounts to $1.8 million for non-TEA projects and $900,000 for TEA projects.

A TEA project is an EB-5 project located in a high-unemployment or rural area. By incentivizing EB-5 investment in more deprived areas through a lower required investment amount, the U.S. government hopes to foster the economy in areas that stand to benefit more from the infusion of foreign capital. A high-unemployment TEA is defined as an urban area with an unemployment rate at least 150% that of the national average, while a rural TEA is classified as an area with fewer than 20,000 inhabitants.

Key EB-5 Investment Requirements

The EB-5 program is open to foreign investors from any country, and they are also welcome to apply for U.S. green cards for their spouse and unmarried children under the age of 21. To successfully complete their EB5 investment and obtain permanent resident status in the United States, however, investors must fulfill a number of requirements:

• The investor must prove that they have injected the relevant minimum investment amount into the EB-5 project—$1.8 million for a non-TEA project or $900,000 for a TEA project.
• The investor must provide documentation that shows the legal sources of their EB-5 investment capital.
• The investor must maintain their EB5 investment in the NCE for the entire two years of their conditional permanent residency period, keeping it at risk the entire time.
• The investor must demonstrate that their EB-5 investment has created at least 10 new, full-time jobs for U.S. workers lasting at least two years.

Investing through an EB-5 Regional Center

Prospective EB-5 investors must make a choice between directly investing in their chosen EB-5 project and investing through a qualifying EB-5 regional center. While both paths offer certain benefits, the vast majority of investors prefer investing through a regional center.

Investors with extensive managerial experience who wish to be intensively involved in the day-to-day operations of the NCE tend to be attracted to the direct investment route. This type of EB-5 investment allows them to exercise more control over their capital, potentially resulting in a larger return on investment.

Conversely, investors with less managerial experience or who simply do not want to be heavily involved in the management of the NCE are generally more drawn to the EB-5 regional center route. With a regional center EB5 investment, an investor can usually satisfy the requirement of involvement with the NCE simply by signing on as a limited partner, which gives them the freedom to settle somewhere far away from their project—investing in a project in Fort Lauderdale, Florida, but settling in Seattle, Washington, is entirely possible.

Another key advantage of regional center investment is that it offers relaxed job creation requirements. In direct investments, United States Citizenship and Immigration Services (USCIS) accepts only jobs listed directly on the NCE’s payroll. In contrast, investors working with an EB-5 regional center can count indirect and induced jobs toward the requirement, making it significantly easier to demonstrate the creation of at least 10 full-time jobs.

Ultimately, both paths lead to permanent resident status if the EB-5 investment is successful. Each investor must weigh the pros and cons and determine which option works better for them and their goals.

Participating in the EB-5 Immigrant Investor Program can be one of the most exciting pathways a foreign national can take to permanent residency in the United States. While it is arguably one of the easiest ways for qualified investors to secure U.S. green cards for themselves and their eligible family members, there are a lot of moving parts to this program and its processes. More moving parts invariably give rise to more questions, and that makes sense. Below are answers to 10 of the most frequently fielded questions from potential investors evaluating whether an EB-5 investment is right for them.

Question 1: What’s an EB-5 Visa?

Answer: The EB-5 visa is one of a set of five employment-based immigrant visas. “Visa” is another word for “green card.” In simplest terms, this program is known as a residency-by-investment option. Classification from the top down looks like this: In the United States, green cards are first categorized by immigrant and non-immigrant status. Then, under the immigrant category, there currently exist four types of immigrant green cards. One subcategory is the employment-based visa. There are five different employment-based visa programs, and the EB-5 Immigrant Investment Program is one of them.

Question 2: Is an EB-5 Visa an Option for Me?

Answer: An EB-5 applicant is considered an individual investor, and this program is open to all foreign nationals who have the fiscal means to invest the minimum amount required into a program-approved EB-5 investment project. Because it is one of the quickest paths to U.S. permanent residency and eligible family members – spouses and dependent children – may apply under a single investment, it is often a primary choice for families with access to investment capital.

Question 3: How Can I Get an EB-5 Visa?

Answer: Although the EB-5 process can be time-consuming and a bit more complex under the surface, the basic requirements for securing an EB-5 visa through this program are fairly straightforward and can be counted on one hand:

• Invest $1.8 million in a program-approved project either directly or with the help of an EB-5 regional center (or $900,000 when the project lies within a designated targeted employment area, or TEA).
• Ensure your lawfully obtained EB5 investment capital remains at risk for the duration of the EB5 investment period (two years).
• Prove that the project you have invested in has created and maintained a minimum of 10 new full-time employment positions.
• Eligible family members who plan to obtain permanent residency in the United States will submit the required petitions at the same time you do.

Question 4: Should I Invest Directly or through an EB-5 Regional Center?

Answer: The answer to this question truly depends upon how involved you’d like to be in the day-to-day operations of your selected project. While the EB-5 regional center program has not been written into U.S. immigration law yet, by far, it is the more popular option among foreign nationals because there are a number of key advantages to investing your EB-5 capital into a regional center.

Generally speaking, working with an experienced regional team is less risky. There is a higher likelihood for locking in on a TEA project that requires half the EB-5 investment amount. How a regional center can meet the job creation requirement also differs – it is more relaxed. And you don’t need to be close enough to the project site to manage daily tasks, unlike with most direct investment projects.

Question 5: How Does Job Creation Differ for Regional Centers?

Answer: The above answer describes the job creation requirement for regional centers as “more relaxed.” EB-5 investors weighing their options may wonder exactly what that means. Whereas a direct investor may only attribute jobs that were added to the project’s direct payroll toward the 10-job minimum requirement, regional centers are allowed greater flexibility in calculating job creation. Indirect and induced jobs may be attributed as long as a reasonable methodology is used to establish job creation.

Reasonable methodologies normally approved by USCIS encompass input–output models that the U.S. government and other reputable entities have used. The methods accepted involve a mathematical estimation for the jobs created and other factors of economic stimuli that can impact a particular sector of an economy (including capital investment).

Question 6: Why Would I Prefer a Direct EB-5 Investment?

Answer: Sometimes a direct EB-5 investment is the ideal option for a foreign national investor. If you have extensive managerial expertise, for instance, and want to continue building your resume, or if you prefer to retain more control over your EB5 investment funds, a direct investment would be a way to ensure these goals are met. Another scenario would be when you already run a business in your country of origin and wish to expand into the U.S. market. There are direct EB-5 investment strategies that may make more sense than working through a regional center.

In either case, it is advisable to reach out to an experienced immigration attorney to determine whether a direct investment is the best way to reach your business goals considering your unique circumstances.

Question 7: Will I Get My EB-5 Investment Capital Back?

Answer: One of the primary requirements for participation in the EB-5 program is that EB5 investment capital must remain “at risk” for the duration of the investment period. While the name of the requirement alludes to investing in risky projects, this is not the case. The central goal of the EB-5 investment program is to strengthen the economy. How do you do that with an investment? By successfully growing the original amount invested.

The actual purpose of the EB-5 “at risk” requirement is to ensure EB5 investment capital is specifically used to fund a new commercial enterprise (NCE) that will create real jobs and stimulate the economy. Ensuring your funds remain “at risk” refers to both the risk of financial loss and the opportunity for financial gain. The specific terms of your investment will be unique and should be clearly outlined in your investment documents – including how you will see your capital (and any gains) returned.

Question 8: How Long Will It Take for Me to Get an EB-5 Visa?

Answer: Hopeful EB-5 investors have heard this program is one of the shortest paths to U.S. permanent residency, but that doesn’t really answer this question, does it? This is because the time it takes to complete the EB-5 process depends on a plethora of variables, including but not limited to:

• How long an investor spends vetting projects
• The time necessary to prepare documents for submission
• USCIS adjudicators’ processing times
• Post-approval waiting periods on EB-5 visas
• How long it takes for eligible parties to enter the United States
• The processing times on USCIS petitions for condition removal

What is certain are the eight steps each investor will pass through on their journey to an EB-5 visa. Learn more about those steps here.

Question 9: Why Do I Have to Wait for My EB-5 Visa After I’ve Been Approved?

Answer: Immigration to the United States is based on a quota system, and there are limits to the number of visas allocated each fiscal year. For the EB-5 program, for instance, approximately 10,000 visas are made available to foreign national investors. However, those visas are further split relatively evenly among participating countries. If demand exceeds supply in a certain country, as with anything, a backlog can manifest. This is why you may be required to endure an additional wait even beyond EB-5 visa approval.

Part of the reason the EB-5 program is so popular is that the backlog for the EB-5 category is relatively recent compared to other green card categories with long-standing backlogs. A bit of recent history: Indian nationals experienced a visa backlog for the first time in July 2019, but after a year of erratic priority date shifts, the India EB-5 backlog became current again (in July 2020) with no additional delays expected. Only two countries are dealing with backlogs as of November 2020 (China and Vietnam).

Question 10: Should I Be Concerned If My Country Is Backlogged?

Answer: If you’re an EB-5 applicant from a country experiencing visa backlogs, there will be an extended wait before obtaining your EB-5 visa after your I-526 petition is approved. Your wait will generally be determined by the number of visa applicants ahead of you in the visa queue. This may become a concern if you are including family members because minor children don’t stop aging while their parent-investor stands in line, so to speak, and children aged 21 and older are ineligible to receive a U.S. green card as the dependent child of an EB-5 investor.

For this reason, in-depth planning with experienced immigration advisors is essential ahead of the decision to participate in the EB-5 investment program. There are strategies an investor can employ (including naming the minor child as a primary EB-5 applicant) during the early stages of investment when aging out could become a concern.