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EB-5 Program Processing Statistics

The processing statistics for the EB-5 program have changed dramatically over the past 11 years. The program has grown significantly, with thousands more investors in 2019 than in 2008, but trends are showing a decline from the peak in 2017. The drop could be partially attributed to the backlogs at United States Citizenship and Immigration Services (USCIS), which have also been increasing. The below graphs present a comprehensive overview of the processing statistics in the EB-5 program from 2008 to 2019.

I-526 Petitions Peak in 2017, Drop Dramatically

In 2008, a mere 2,873 I-526 Immigrant Petition by Alien Investor petitions were processed (classified as either received, approved, denied, or in pending status), a staggering difference from 2019’s 22,630. The number of petitions received, adjudicated, or in pending status rose steadily and rapidly from 2008 until 2017, when it reached a peak of nearly 50,000. Since 2017, there has been a rapid decline, which may be partially attributable to the large number of petitions in pending status, which totaled close to 25,000 in 2017. In terms of petitions received, 2019 fell below the 2012 figures.

Furthermore, each year, the number of EB-5 approvals has been significantly larger than the number of denials, but the ratio changes from year to year, with 2019 presenting one of the largest denial ratios. The number of petitions adjudicated in 2019 was significantly lower than that of 2018, with the USCIS backlog reduced by only around 600 petitions.

For the most part, the EB-5 program has grown significantly over the past 11 years. Regarding the number of I-526 petitions received by USCIS, growth was steady and generally large from 2010 until 2016, with 2011, 2010, and 2014 recording the highest growth percentages. The trend reversed in 2016 with a small decline, increasing to a large 49% decline in 2018 and continuing with a 35% decline in 2019.

In most years, the approval rate has also grown, with 2016 and 2019 being the only years to record a decline. 2012 saw a massive approval growth rate to the tune of 134%, but 2019’s 73% drop in I-526 approvals is in stark contrast. It is worth noting that the denial rate for I-526 petitions also decreased by 35% in 2019, indicating a drop in the overall number of adjudications.

Finally, the backlogs grew rapidly from 2010 until 2017, although growth rates started slowing down in 2015. The number of pending I-526 petitions in 2017 was larger than the total number of petitions processed by the USCIS each year from 2008 to 2013. While the USCIS managed to lower the backlogs by 42% in 2018, it fell by only 4% in 2019.

I-526 Petition Figures Fall in 2019

If we look at the total number of I-526 petitions processed by the USCIS per quarter from FY2017 to FY2019, we see that the numbers have generally been decreasing, particularly in FY2019. All FY2019 figures are lower than all figures from the preceding two years, with figures seeing a particularly steep drop starting in January 2019. If USCIS can improve its adjudication rate, the lower number of petitions being received could allow the backlogs to decrease.

Furthermore, while the number of petitions was significantly lower than previous figures in 2019 Q2 and Q3, the number shot back up in 2019 Q4. The number of adjudicated petitions during this time, however, decreased, which does not bode well for the backlogs. Notably, the number of approvals for the last three quarters of FY2019 was also significantly lower than those of previous quarters, while the denial rates have remained fairly average, so it may be wise for EB-5 investors to exercise caution.

Going back to FY2016, the falling trend for I-526 petition receipts becomes even clearer. In 2016 Q1, 2016 Q4, and 2017 Q3, the number of receipts was significantly higher than the number of adjudications, but since 2017 Q4, the number of receipts has generally been lower. It was higher in 2019 Q4, but that may be only because of the abnormally low number of adjudications throughout the year—had FY2019 seen adjudication rates closer to those of previous years, the adjudication rate would have been higher than the rate of receipt. The number of adjudications reached a peak in 2018 Q3 and has since declined dramatically to a record low for the studied period in 2019 Q3.

I-829 Petitions Experience Steady Growth

The overall growth of the EB-5 visa program is also evident in the number of I-829 Petition by Investor to Remove Conditions on Permanent Resident Status petitions processed by USCIS between 2008 and 2019. With the exception of a sudden boom in 2011, after which figures returned to near 2010 levels, the total number of petitions has grown steadily year after year since 2008. This means the backlog has also grown steadily, reaching almost 9,800 in 2019. The growing I-829 backlogs have not quelled the flow of incoming petitions, however, with 2019 recording the highest figure during the studied period at 3,756.

In general, the reception and adjudication of I-829 petitions has grown during the period of 2008 to 2019. The number of I-829 petitions received by USCIS grew each year except for 2012 and 2017, although 2012’s negative growth rate is largely due to the stark difference compared to the abnormal spike in 2011, which recorded a 205% growth rate from 2010.

Approval rates grew in most years as well, with only 2010, 2012, 2015, and 2019 showing declines. 2019’s negative growth rate of -37% for approvals is the largest in the entire 11-year period. Denial rates exhibited more fluctuation, recording massive growth rates of 305% and 827% in 2014 and 2016, respectively. Typically, if approval rates are down for a year, the denial rates are as well, and that is true for 2019, which saw a -7% growth rate for denials to accompany the -37% growth rate for approvals.

Finally, the number of pending applications has grown every year except 2012, which may be attributable to 2011’s spike. Since then, it has risen each year, with a 95% growth rate in 2015 and 28% in 2019. With adjudication rates falling and backlogs continuing to increase, EB-5 investors may be subjected to even longer waiting times.

I-829 Petitions See High Approval and Receipt Rates

In contrast to the falling numbers of I-526 petitions, figures for I-829 petitions have remained relatively steady over the FY2017–FY2019 period. The total number of petitions peaked in 2017 Q4 at 1,845 and have, since 2018 Q4, remained stable at around the 1,200 level, with the exception of a jump to 1,784 in 2019 Q3.

The number of I-829 petitions received has generally been growing, with FY2019 seeing the highest total figures in the three-year period, including the only number above 1,000 in Q3. Figures grew steadily to 1,171 in 2019 Q3 following a 53% drop in 2018 Q4.

The growth rates for approvals during the 2017–2019 period were generally large, regardless of the direction, with the smallest growth rate at 39% (negative growth) in the first, second, and fourth quarters of FY2019. The largest was in 2017 Q2 at 202% (positive). In the last two quarters of FY2017, as well as the first and last quarters of FY2018, approval rates were higher than the number of I-829 petitions received.

Denial rates have witnessed fluctuating growth rates due to their small numbers: The largest number of denials for any quarter during the period was 62. In all years, the number of denials has been significantly smaller than the number of approvals, with the largest difference in 2018 Q1, where there were 901 approvals and two denials.

The quarterly bar graph for I-829 petitions makes clear the large number of approvals over denials, with each bar almost entirely blue, signifying approvals. Adjudication rates slowed down in FY2016 but picked up dramatically in FY2017, particularly in Q4, and have fallen with fluctuations ever since. The rate of receipts has also seen fluctuations but has remained at relatively the same level, generally above the number of adjudications for the respective quarter. The clear outlier in this regard was 2017 Q4, which saw 1,352 adjudications and a mere 493 receipts. For the entirety of FY2019, the number of receipts has been well above that of adjudications.

I-526 Receipts Fall, Approval Rates Drop Significantly

When looking at a line graph of I-526 adjudications vs. receipts for the period of FY2013 to FY2018, we can see what appears to be a trend reversal starting in FY2017. Receipts grew from FY2013 and reached a plateau in FY2015 and FY2016 before decreasing slightly in FY2017. From there, receipts nearly halved, with FY2018 figures even lower than FY2013 figures. Meanwhile, adjudications are shown to have risen almost every year, with the exception of FY2016, when I-526 adjudications were slightly lower than in FY2015. Until FY2016, receipts were significantly higher than adjudications, but the figures were roughly even in FY2017, and FY2018 saw far more adjudications than petitions. However, the omission of FY2019 EB-5 data makes this graph somewhat misleading, as previous graphs have indicated that adjudications dropped drastically in FY2019, falling back below the number of receipts, which also decreased.

Unlike the previous graph, this line graph of I-526 approvals and denials does include FY2019 data, which starkly contrasts with the data of preceding years. For every year since FY2015, approval rates have been higher than denial rates, significantly so until FY2019. Although FY2016 saw increased denials and fewer approvals, the difference remained high and shot back up in FY2017 and FY2018. Starting in 2019 Q1, the approval rate took a nosedive, which continued in Q2, and in Q3, there were only 88 more approvals than denials. This rate improved slightly in Q4 but remains significantly lower than in all previous years in the period.

I-526 Backlog Begins to Decrease

Regarding the USCIS I-526 backlogs, which have grown to unprecedented heights in recent years, growth rates are shown to be slowing. The most dramatic growth was seen in FY2014, where the backlog grew by 75%. From FY2015 to FY2017, while pending I-526 petitions grew by the same amount as in FY2014 in terms of the actual numbers, the growth percentage was lower, falling to 20% in FY2016 and FY2017. Only FY2018 saw a decrease, and a dramatic one at that, recording a negative growth rate of 42% and taking the number of pending I-526 petitions back down to pre-FY2015 levels. Had the FY2019 data been included, we would see the downtrend continuing but weakening significantly, with the number of pending petitions decreasing by only 4%.

I-829 Approval Rates Remain Staggeringly High

As the first of these two charts illustrates, the approval rates for the I-829 petition are staggeringly high, with percentages in the 90s for most years between FY2008 and FY2018. The lowest percentage—70%—came in FY2008, after which the rate reached 95% in FY2011. FY2014 saw a sudden dip, shooting back down to 78% from 95%, while FY2015 witnessed an astounding approval rate of nearly 99%.

However, as the second chart reveals, while approval rates are high, the backlog is also steadily growing. For most years from FY2013 to FY2018, approval rates remained consistently below the receipt rate by hundreds of petitions, reversing only in FY2017 by a mere 15 petitions. FY2017’s reversal was due to a drop in receipts rather than an abnormally high increase in approvals, however, and when receipts picked back up in FY2018, approvals plateaued, which is not good news for the ever-increasing I-829 backlog.

USCIS Adjudications Consistently Low in 2019

The USCIS adjudicated an extremely low number of EB-5 forms, regardless of the type, throughout the entirety of FY2019. While previous graphs have shown the beginnings of a downtrend in the I-526 backlogs, sparked by a large number of adjudications in FY2018, the number of I-526 petitions pending is still almost triple the number adjudicated as of the end of FY2019. Similarly, for I-829 petitions, the number of pending petitions is more than five times the number of those adjudicated, and the backlog for I-829 has been exhibiting steady growth. For the much less filed I-924 petition, however, more petitions were adjudicated than are pending.

Completion numbers for all three EB-5 forms are were down in FY2019, dropping to below 1,000 in total in 2019 Q4. While in FY2018, the total figures for each quarter were above 4,000, 2019 Q1 saw a steep drop, which continued in Q2. Figures have remained steady since 2019 Q2, so if USCIS does not pick up the adjudication pace in 2020, the state of the backlogs will depend on the number of petitions received.

I-526 Petition Receipts Drop While I-829 Petition Receipts Slowly Rise

Ever since FY2010, the beginning of the studied period, I-526 receipts have been well above I-829 receipts, but this trend threatens to reverse as we move into FY2020. In FY2012, I-526 receipts rose while I-829 receipts fell, and in FY2014, I-526 receipts shot up dramatically, while I-829 receipts continued along a slow upward trend. I-526 receipt rates began to fall in FY2017 before plummeting in FY2018, continuing their fall into FY2019. Meanwhile, I-829 receipt rates have been relatively steady, increasing slowly since a small drop in FY2017. If these trends continue, I-829 receipts are poised to overtake I-526 receipts in FY2020.

Since their introduction in FY2015, I-924 Application For Regional Center Designation Under the Immigrant Investor Program petitions have been significantly lower than their counterparts. While I-924 petition receipts saw an increase in FY2017 to over 1,000, the figure plummeted to an unprecedented low in FY2019 with only 95 receipts.

The quarterly breakdown shows heavier fluctuation, with I-829 petitions overtaking I-526 petitions in 2018 Q3, 2019 Q2, and 2019 Q3. I-516 petition receipts spiked in 2019 Q1 but remained low for the remainder of the fiscal year, although they did see an increase in Q4, putting the I-526 figures back above those for I-829. The I-829 receipt rate remained more stable throughout the period, decreasing somewhat at the end of FY2019.

Particularly noteworthy is the sudden decline in I-924 petitions for regional center designation in FY2019. In no quarter were the figures above 20, and in Q3, not a single I-924 petition was received by USCIS. The sudden drop in I-924 petition receipts is likely related to the new USCIS regulations that have increased the required EB-5 investment amount and restricted TEA designation, which has resulted in an unprecedentedly high number of regional center terminations.

USCIS Adjudications See a Steep Decline, Backlogs Still Large

For the majority of the period between FY2010 and FY2019, USCIS adjudicated an increasingly large number of I-526 petitions. For the most part, the number rose year over year throughout the decade, with USCIS adjudicating an impressive 15,076 I-526 petitions in FY2018. However, the trend reversed dramatically in FY2019 with the steepest drop in the entire decade, falling to only 4,656, on par with FY2013 levels. Although receipts also dropped in FY2019, the huge backlog meant that USCIS still had an overabundance of petitions waiting for adjudication, indicating that the drop is due to UCSIS slowing down its adjudication rates.

The number of I-829 petitions adjudicated was also down in FY2019, but not significantly, and the drop is not abnormal for the relatively stable I-829 adjudication rate seen throughout the decade. The I-924 adjudication rate, like that of the I-829 petition, was consistently much lower than that of the I-526 but reasonably stable throughout the period.

It is also clear that while the I-526 backlog was fairly small in FY2010 and FY2011, it started shooting up in FY2012, rising steadily for years until peaking in FY2017. In FY2018, USCIS completed an abnormally high number of I-526 petitions, bringing the backlog down significantly, but it decreased only marginally in FY2019, meaning USCIS is going into FY2020 with a large I-526 backlog still looming overhead. Meanwhile, while the I-829 backlog has never reached the same heights as the I-526 backlog, it has been climbing steadily year over year, with no declines since FY2012. If growth continues at the current rate, the I-829 backlog is poised to overtake the I-526 backlog within a year or two.

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EB-5 Quota Backlogs and Long USCIS Processing Times Emphasize the Importance of Choosing Reputable Regional Centers

The EB-5 program has seen some changes in recent years, including increased investment fund requirements and more restrictive targeted employment area (TEA) designation, but these are not the only challenges the program faces. Adding to the problem are the lengthy quota backlogs in major EB-5 investor countries and the ever-increasing United States Citizenship and Immigration Services (USCIS) processing times. Considering the additional factor of record-breaking rates of regional center terminations, EB-5 investors today are faced with unprecedented challenges to receive their EB-5 visa and gain U.S. permanent residency.

Regional Center Terminations Threaten Investors’ Visa Approval

In light of the modified requirements of the EB-5 program, regional centers are being shut down at record-breaking rates. The higher amount of required investment funds reduces the number of investors, which, in turn, results in some regional centers failing to stimulate their local economies to the satisfaction of USCIS.

The problem for investors is that if the regional center through which they are investing is terminated mid-project, investors who have not yet received conditional residency may see their EB-5 petitions denied. The long quote backlogs and growing USCIS processing times exacerbate the problem because they require regional centers to remain in operation for longer. Investors beginning the EB-5 investment process now must choose a regional center they believe will still be in operation several years down the road.

For investors outside of China, Vietnam, India, and other countries with major backlogs, the long processing times still pose a risk. In 2010, the processing times were just seven to nine months, but this jumped to 54–90 (4.5–7.5 years) in 2019. Therefore, all EB-5 investors, regardless of country of origin, must carefully select a reputable EB-5 regional center that is likely to continue operations for many years to come.

Choosing a Reliable EB-5 Regional Center

The importance of working with an experienced, reputable EB-5 regional center to safeguard one’s investment and EB-5 visa approval cannot be overstated. Prospective investors need to sufficiently research the regional centers covering the area in which they intend to invest in order to ensure the lowest possible likelihood of premature termination. Working with a network that runs multiple regional centers and possesses vast experience—such as EB5 Affiliate Network (EB5AN)—is the safest bet for any EB-5 investor.

While regional centers are being terminated around the country due to a failure to stimulate the local economy, EB5AN is thriving, with no danger of being shut down. With 15 regional centers that offer coverage of 27 states, as well as Washington, D.C., EB5AN is extensively experienced with EB-5 projects and knows the ins and outs of working with USCIS. The team keeps up to date on all metrics and regulations related to the EB-5 program, ensuring continued adherence and, consequently, reliable longevity.

Affiliating with an EB5AN regional center also speeds up the investment process, allowing investors to start raising EB-5 capital immediately. The network’s project documentation services can also facilitate and expedite the paperwork process involved in EB-5 investment, as well as ensure that all the forms are properly filled out, helping investors gain approval.

While the conditions surrounding the EB-5 program may be becoming more restrictive, the program remains a lucrative opportunity for investors with the necessary funds. For those investors, navigating the changing environment in the EB-5 world simply requires more caution, forethought, and careful research to locate a regional center that offers high chances of success. EB5 Affiliate Network, with its vast network of regional centers, proven track record, and 1500+ active investors, represents an opportunity for EB-5 investors to most securely invest in the future for themselves, their family, and the United States.

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EB-5 Regional Centers Are Being Shut Down at an Unprecedented Rate, Making Reputable Centers More Important

The United States Citizenship and Immigration Services (USCIS) has tightened its regulations, and with the new regulations comes an unprecedentedly high rate of regional center terminations. 2019 saw the termination of 75 regional centers, hardly offset by the approval of a mere six. This represents only the second year since 2008 where more regional centers were terminated than approved, and it is the only year where dramatically more centers were terminated than approved.

This massive drop represents a 6.5% reduction in the nation-wide number of EB-5 regional centers, placing the number at 822. In pure numbers, there were fewer centers terminated in 2019 than in 2018, which witnessed a record high at 130, but the large number of approvals left 2018 with an overall 2% increase.

The trends are alarming, with 80% of all regional center terminations since 2008 having taken place between 2017 and 2019. In contrast, only 20% of all approvals took place during this three-year period.

Extraordinarily Long Processing Times

Exacerbating the problem are the increasingly long processing times to become a USCIS-approved regional center. From seven to nine months in 2010, the times jumped to 16–20 months in 2018 and a startling 54–90 months in 2019. Given these extraordinarily long processing times, the growth rate of the number of regional centers is poised to remain low at best and negative at worst.

High-Quality EB-5 Regional Centers

The rapidly decreasing number of EB-5 regional centers makes investment riskier for EB-5 investors. If the regional center an investor works with loses EB-5 regional center status, the investor’s EB-5 visa could be ruined. That is why, to safeguard their investments and maximize the chances of success for their investment project, it is important for investors to affiliate with high-quality, reputable EB-5 regional centers, such as those run by EB5 Affiliate Network (EB5AN).

EB5 Affiliate Network runs 15 EB-5 regional centers across the US, with coverage of 27 states as well as Washington, D.C. To cover the remaining states, EB5AN maintains an extensive affiliate network with reputable EB-5 regional centers to ensure that investors have access to reliable assistance for their EB-5 investment journey, offering investors the ability to locate affiliated regional center sponsors through a search feature. As business experts with years of experience working with USCIS, the EB5AN team knows how to maintain USCIS approval to protect their clients and their investments.

In short, while the current termination trends may be alarming, EB-5 investors need not fret so long as they select their EB-5 regional center affiliation carefully. While many centers are being shut down, those that rigorously adhere to the USCIS guidelines are not in danger, and investors can invest safely through these centers. EB5 Affiliate Network is one of the largest EB-5 regional center affiliation networks in the country, and their extensive experience with the USCIS ensures the quality and continued existence of their many regional centers, ensuring a fruitful experience for the 1500+ investors who choose to work with them.

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USCIS Lawsuit Challenges the Validity of New EB-5 Program Rules

Regional Center Challenges the Validity of the EB-5 Immigration Investor Program Modernization Final Rule

On November 26, 2019, Florida EB5 Investments, LLC (the “Plaintiff”), filed a civil action against the Department of Homeland Security (DHS) and the United States Citizenship & Immigration Services (USCIS) (the “Complaint”) challenging the validity of the recently implemented EB-5 Immigration Investor Program Modernization Final Rule (the “Final Rule”).

Click here to download the full Complaint seeking a temporary restraining order and preliminary injunction to halt the implementation of the recently implemented Final Rule.

The Plaintiff, a regional center and participant in the EB-5 Immigrant Investor Program, contends that the Department of Homeland Security (DHS) implemented the Final Rule without considering the harmful economic effects the rule change would have. Moreover, the Plaintiff alleges that the program changes violate the Administrative Procedure Act (APA) and the 10th Amendment, and the Final Rule should thus be vacated.

The Plaintiff requests that the Court grant a temporary restraining order and preliminary injunction barring the DHS, USCIS, and the Immigrant Investor Program Office from implementing the Final Rule published in July 24, 2019, and effective from November 21, 2019. The Plaintiff further requests declaratory judgments confirming that the Final Rule is invalid, vacating the Final Rule, and confirming that it violates the APA.

Although the Final Rule introduces numerous changes, the Complaint focuses on two key revisions. The first is the significant increases in investment amounts, which rose from $1 million to $1.8 million for regular investments, and $500,000 to $900,000 within targeted employment areas (TEAs). The second relates to the changes to the TEA designation system that shift the responsibility for designation away from state agencies toward the DHS and USCIS.

The Plaintiff argues that these changes, particularly the increased investment amounts, will make the EB-5 program less attractive to investors and developers alike. According to the particulars of claim, several of the Plaintiff’s affiliates withdrew from the EB-5 program following the announcement of the Final Rule, with some completely abandoning projects. If more affiliates abandon the program, which the Plaintiff expects to happen, the Plaintiff may go out of business.

The Plaintiff further alleges that DHS and USCIS were aware of several studies on the economic impacts of the rule changes, despite their initial claim that they did not have adequate data to make an evidence-based decision. He notes that during the rulemaking process, commenters drew rule makers’ attention to several research studies conducted by reputable organizations, including the Department of Commerce, on the effects of the EB-5 program. However, DHS chose to ignore the findings of these studies when implementing the program changes, allegedly to avoid Congressional oversight of the rulemaking process. Rule changes with an effect of more than $100 million on the economy are classified as major rules, which require Congressional approval.

The studies cited in the Complaint show that in an unconstrained environment, the EB-5 program brings about extensive benefits to the U.S. economy. For example, trade group Invest in the USA (IIUSA) found that during FY2010–2011 the program contributed $2.6 billion to U.S. GDP and created or supported 33,000 jobs. The Department of Commerce’s analysis of FY2012 and FY2013 data indicated that the program created 170,000 jobs and drew $5.8 billion in capital during the study period. Similarly, Economic & Policy Resources Inc. determined that during FY2014–2015, the program provided 2% of all foreign direct investment inflows, contributed $11 billion to the U.S. economy, and created more than 335,000 jobs.

The Plaintiff’s contention that the Final Rule should be vacated is based on three allegations related to violation of the APA: (1) TheFinal Rule violates the APA because it is “arbitrary and capricious.” (2) Under the APA, the Department of Labor should have performed a Regulatory Flexibility Act (RFA) analysis to determine how the changes will affect small businesses like the Plaintiff, which is defined as a small business by the RFA and Small Business Administration. (3) “DHS’s attempts to designate TEAs exceeds its statutory authority,” as the Final Rule does not cite the statute that authorizes the DHS to designate TEAs. Although the DHS claims that its authority stems from its mission to “ensure that the overall economic security of the United States is not diminished by efforts, activities, and programs aimed at securing the homeland,” its mandate is security and protection, not promoting economic development.

The Plaintiff further argues that the Final Rule should be vacated because it violates the 10th Amendment. By shifting TEA designation from state agencies to federal government agencies, DHS limits states’ ability to “conduct their own government and foster economic development within their respective borders.”

The Complaint filed in the U.S. District Court for the District of Columbia names Chad Wolf, acting secretary of the DHS; Kenneth T. Cuccinelli, acting director of USCIS; and Edie Pearson, policy branch chief of the Immigrant Investor Program Office (the “Defendants”) in their professional capacities. The Defendants have 60 days from service of summons to respond, so we can expect an update early in 2020.

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EB-5 Updates Now in Force

In July 2019, United States Citizenship and Immigration Service (USCIS) and the Department of Homeland Security (DHS) published updates to the EB-5 visa program in the Federal Register. The new EB-5 rule, implemented to modernize the program, came into effect on November 21, 2019.

While the updates include several technical revisions, the key changes to the EB-5 visa program relate to investment amounts, the designation of targeted employment areas (TEAs), and priority date retention for certain EB-5 investors.

For the first time since the investment green card program began, investment amounts have increased. The full investment amount rose from $1 million to $1.8 million, whereas the reduced investment amount permitted when investing in projects in TEAs rose from $500,000 to $900,000. This change reflects inflation, and a framework has been introduced to facilitate subsequent inflation-based increases in investment amounts every five years.

Previously, individual states and local governments were permitted to designate high unemployment targeted employment areas. Now, USCIS directly reviews and designates these TEAs. Additionally, the rules have changed for combining census tracts to form a single TEA. Although census tracks can still be combined, the TEA must consist of only the contiguous tracts in which the new commercial enterprise will operate and any directly adjacent census tracts. Finally, the definition of a high employment TEA has changed to include areas located outside metropolitan statistical areas (MSAs).

The changes to the TEA designation process mean that EB-5 investors who claim to qualify for the lower investment amount now have to submit supporting evidence that the target project falls within a TEA—rural or high unemployment—when submitting their I-526 petitions. Furthermore, the area must meet the EB-5 green card program criteria at the time of filing the petition or at the time of making the investment. Some areas that previously qualified as TEAs will no longer qualify under the new rules, so investors must confirm TEA status when conducting their due diligence.

Finally, certain EB-5 investors will be able to retain their priority dates—the date on which they filed their I-526 petitions, which determines their place in the visa queue. This EB-5 update applies to investors whose I-526 petitions have been approved but who have not yet obtained conditional permanent residence and whose investment green cards are at risk because of material changes to their applications. The new rules allow them to file new I-526 petitions without losing their place in the visa queue.

Over the coming months the full implications of the EB-5 visa program changes will become clear when new petitions are filed—and new challenges arise. EB-5 practitioners, investors, and developers should keep up with EB-5 news to make sure they know how the implementation of the new rules will affect their participation in the EB-5 green card program.

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New Initiative Announced by EB5 Affiliate Network to Safeguard EB-5 Investors’ Funds

Samuel Silverman, Managing Partner of EB5 Affiliate Network, discusses the introduction of a new initiative that promises to protect EB-5 investors’ funds in the event of an I-526 application denial.

EB5 Affiliate Network (EB5AN), a leading EB-5 regional center and EB-5 service provider sponsoring more than 1,100 EB-5 investors from more than 40 countries around the world, has announced a new, unique initiative that provides for a guaranteed refund of attorney’s fees and USCIS filing fees in the event an EB-5 investor’s I-526 application is not approved. This guaranteed refund is for select current EB-5 investment projects sponsored by EB5AN.

The EB-5 visa process is costly, requiring investors to hire immigration counsel and pay their legal fees as well as to pay USCIS processing and filing fees—all in addition to a minimum $500,000 capital investment.

Certain EB-5 projects offer to refund investors in certain instances where their I-526 application is denied, but in these cases, any money spent on immigration attorneys or USCIS application fees are unrecoverable. To provide peace of mind to EB-5 investors and to indicate the strength of the projects that it sponsors, EB5AN will guarantee the refund of such attorney’s fees and filing fees for select current EB-5 investment projects.

EB5AN Managing Partner Sam Silverman said, “We are excited to implement this new safety feature for EB-5 investors, and we hope that this decision will set a new standard for the EB-5 industry with the goal of safeguarding investor capital and strengthening an alignment of incentives between EB-5 regional centers and individual EB-5 investors.”

About EB5 Affiliate Network, LLC: EB5AN is a leading provider of EB-5 project consulting and regional center affiliation services. The company has worked on more than 200 EB-5 transactions across the country and has completed applications for more than 75 new regional centers. Additionally, the company owns and operates 15 USCIS-approved regional centers across 27 states with an international team from a diverse set of institutional backgrounds in both law and finance, including business strategy, private equity, securities, and real estate.

 

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New EB-5 Regulations Announced – Investment Amount Increases


Advance Copy of EB-5 Final Rule

This final rule amends Department of Homeland Security (DHS) regulations governing the employment-based, fifth preference (EB-5) immigrant investor classification and associated regional centers to reflect statutory changes and modernize the EB-5 program. In general, under the EB-5 program, individuals are eligible to apply for lawful permanent residence in the United States if they make the necessary investment in a commercial enterprise in the United States and create or, in certain circumstances, preserve 10 full-time jobs for qualified United States workers. This rule provides priority date retention to certain EB-5 investors, increases the required minimum investment amounts, reforms targeted employment area designations, and clarifies USCIS procedures for the removal of conditions on permanent residence. DHS is issuing this rule to codify existing policies and change certain aspects of the EB-5 program in need of reform. DATES: This final rule is effective November 21, 2019.

Key Points from New EB-5 Regulations:
  • An increase in the minimum TEA investment threshold from $500K to $900K
  • An increase in the minimum non-TEA investment threshold from $1M to $1.8M
  • TEA’s will now be centrally designated by DHS
  • TEA’s will now only be available for projects that are located outside of MSA areas and unemployment calculations will only include “directly adjacent” census tracts to the census tract of the project – – Link here to list of MSA areas
  • Effective Date: November 21, 2019 – Any I-526 petitions filed before this date will be grandfathered under the current rules and lower investment amount of $500K for TEA projects

 

 

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Understanding the Implications of the USCIS Petition Processing Report for FY2019 Q2

United States Citizenship and Immigration Services (USCIS) has released the data on the number of EB-5 petitions processed in the second quarter of FY2019, which ran from January to March 2019. The updated statistics are available on the organization’s Immigration and Citizenship Data page.

The decline in the number of petitions the Immigrant Investor Program Office (IPO) processed during FY2019 Q1 has continued. After a 37% decrease in processing volume in Q1, this volume further decreased by around 60% in Q2, with the overall number of petitions processed falling to only 1,290.

In FY2019 Q2, the IPO processed 975 I-526 petitions, compared to 2,573 in FY2019 Q1 and 4,497 in FY2018 Q2. Additionally, significantly fewer I-526 petitions were submitted, with only 580 submitted during FY2019 Q2, down from 1,808 in FY2019 Q1.

The number of I-829 applications processed fell from 474 in Q1 to 285 in Q2, with the number of petitions submitted increasing slightly from 797 to 921. Processing data for I-924 applications has been withheld, but 22 applications were submitted, and 156 applications remain pending.

Of the 975 I-526 petitions processed, 180 petitions were denied and 795 were approved. Thus, the percentage of I-526 petitions approved decreased slightly, from around 85% in FY2019 Q1 to 81.5% in FY2019 Q2. Additionally, I-829 application approvals increased slightly from approximately 93.5% to 94.7%.

A total of 22,082 EB-5 petitions remain unprocessed: 13,105 I-526 applications, 8,821 I-829 applications, and 156 I-924 applications. While processing times for I-526 applications dropped slightly at the end of January 2019—to 20.4 months compared to 22.1 months in FY2018—as of July 2019, they have increased to 25.5 to 45 months. Similarly, processing times for I-829 petitions, which increased from 27.1 months to 30.9 months for the same period, have increased to 28 to 43.5 months.

The exact cause of the reduction in output is unclear, as USCIS has not offered any explanation for the slowdown. However, possible causes include shortages of staff or other resources at IPO, a decision to pause or reduce processing, and closer, more time-consuming scrutiny of petitions.

When processing volumes decrease, processing times increase. Consequently, it takes longer to clear backlogs, and new EB-5 program petitioners face longer processing times. Based on the current IPO output and backlog, any new petitions filed would take almost eight years to process. This will change if IPO output changes.

Although increased I-526 processing times are not ideal for those pursuing U.S. permanent resident status through the EB-5 program, it does have the benefit of providing some protection against children aging out due to delays, specifically for applicants facing visa retrogression and long wait times for visas to become available.

Essentially, if I-526 processing takes longer than the visa wait time, children should be protected against aging out. Under the Child Status Protection Act, a qualifying child’s age is frozen on I-526 submission, with the clock restarting on I-526 approval. Therefore, delayed I-526 approval potentially freezes the child’s age until a time closer to visas becoming available. If a delay occurs after I-526 approval and there is a significant waiting time for visas, the risk of aging out increases.

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Q2 FY2019 USCIS Statistics for EB-5 Petition Processing

The USCIS has updated its EB-5 petition processing statistics, displayed on the Immigration and Citizenship Data page, to reflect information about the petitions received and processed during the second quarter of the 2019 financial year (January–March 2019).

The overall number of EB-5 forms processed by the Immigrant Investor Office (IPO) during this period decreased significantly, from 3,116 in FY2019 Q1 to 1,290 in FY2019 Q2. This has been a particularly unproductive quarter for IPO.

The number of I-829 applications processed fell from 474 to 285, and I-526 applications decreased from 2,573 to 975. The data concerning the volume of I-924 applications processed has been omitted from the report, but based on the number of pending applications in the previous quarter (148), the number of applications received in Q2 (22), and the number of pending applications at the end of Q2 (156), it seems only 14 were processed.

Of the 975 I-526 petitions processed, 180 petitions were denied and 795 were approved. Thus, the percentage of I-526 petitions approved decreased slightly, from around 85% in FY2019 Q1 to 81.5% in FY2019 Q2. Additionally, I-829 application approvals increased slightly, from approximately 93.5% to 94.7%.

The number of I-829 applications received increased compared to the previous quarter, at 921 compared to 797 for I-829 applications, while the number of I-526 applications decreased from 1,808 in Q1 to 580 in Q2.

In relation to all types of employment-based petitions, those related to the EB-5 program constitute a small percentage. For example, in FY2019 Q2, USCIS received 388,338 applications for Employment Authorization Documents (EADs), compared to only 1,290 for all three categories related to the EB-5 program (I-526, I-829, and I-924). A total of 22,082 EB-5 petitions remain unprocessed, a number that consists of 13,105 I-526 applications, 8,821 I-829 applications, and 156 I-924 applications.

Processing times for I-526 applications have increased to 25.5–40 months, whereas processing times for I-829 petitions have increased to 28–43.5 months.

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EB-5 Immigrant Investor Program Modernization Rule Is Moving to the Final Stage

On June 27, 2019, the Office of Management and Budget (OMB) announced that EB-5 Immigrant Investor Program Modernization (RIN: 1615-AC07) has reached the final stage in the rulemaking process. Therefore, we expect the Final Rule to be published in the Federal Register within the next few days.

United States Citizenship and Immigration Services (USCIS) will announce the publication of the Final Rule on the USCIS Federal Register Announcements page. Interested parties can sign up on the page to receive email updates.

The Content of the Final Rule

Although the specific content of the Final Rule will not be publicly available until its publication, based on the proposed rule published in January 2017, we expect changes to EB-5 investment amounts and the regulations governing targeted employment areas (TEAs). For example, we expect minimum investment amounts to increase to $1.35 million or $1.8 million, depending on the location of the project. Nevertheless, because we do not know what changes OMB and USCIS have made to the rule since it was first proposed in January 2017, these amounts are an educated guess rather than a certainty.

The Effective Date of the Final Rule

The Final Rule will include a date on which the changes come into effect. This date will probably be 30 to 60 days after publication. It is important to note that the changes will affect only future I-526 filings. In other words, the new regulations on minimum investment amounts will not affect I-526 applications filed before the effective date set out in the Final Rule.

Additionally, after publication and before the effective date, Congress and the Government Accountability Office review the regulation. This may lead to delays in implementation. Similarly, implementation could be delayed if someone institutes legal action in federal court that necessitates judicial review. However, it is impossible to anticipate either type of delay.

The Implications of Changes to the EB-5 Program

The key implication of the looming changes is that those who want to take advantage of the lower EB-5 investment amounts need to do so now. It is important for investors to bear in mind that this news is likely to lead to a filing surge, so those who were born in countries that are currently experiencing backlogs and who are not part of the initial surge may find themselves facing even longer visa wait times. For example, during the grace period, several thousand investors are likely to submit EB-5 petitions, with half expected to be Indian nationals. For Indian nationals, this could add years to the current backlog.

To discuss your EB-5 investment options, including the advantages and disadvantages of beginning the investment process now, schedule a call with Sam Silverman, our managing partner, today.

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