Permanent resident status in the United States is something most people in the world can only dream of. Boasting the world’s largest economy, unparalleled freedom, and state-of-the-art health and education facilities, the United States is the number one destination of immigrants worldwide. The problem is that immigration is difficult, especially when it’s to such a sought-after nation. Most education- or employment-based visas come with stifling restrictions and only allow a temporary stay, with the visa holder obliged to return to their home country upon visa expiration. With permanent resident status, such obstacles can be avoided.

Some foreign nationals—especially those from visa-free or visa-waiver countries—may question the utility of an EB-5 visa when they can attend school in the United States (or send their children to school in the United States), purchase property in the United States, and vacation in the United States without permanent resident status. Indeed, permanent resident status isn’t required to take advantage of these opportunities. However, making an EB5 investment is worth it for a number of reasons—and savvy investors may even earn a handsome return on investment in the process.

Studying as a Green Card Holder: In-State Tuition Savings, Higher Admission Rates, Employment Freedom

It’s absolutely possible to earn a degree from a prestigious U.S. university as an international student—in fact, every year, hundreds of thousands of international students do. An F-1 student visa allows foreign nationals to enter the United States for the purpose of studying at their college of enrollment, but upon graduation, they must return to their home country or quickly find a company willing to sponsor them for an employment-based visa. F-1 visa holders are also severely restricted in the types of employment they may undertake in the United States, usually only able to take jobs offered by their university or required as part of their study program.

With an EB-5 visa, students are free to take any job during their studies, just as a U.S. citizen can. They can freely apply for internships and other positions to bolster their resume for their post-graduation job search, making them more employable than their peers on F-1 visas. Permanent residents also enjoy a less stressful job search after earning their degree, as they can stay indefinitely in the United States regardless of their success in securing employment.

Holding a green card also offers advantages before a student enrolls in a U.S. post-secondary education institute. Permanent residents applying to schools in their state of residence may be eligible for in-state tuition savings, which can save them tens of thousands of dollars a year. U.S. universities also favor U.S. citizens and permanent residents in the application process, making the admissions process easier and less competitive than for international students. Considering this, making an EB-5 investment could indeed be the difference between admission and rejection for a prospective student.

Investing as a Green Card Holder: Safer Investments, More Legal Protections, Easier Access

The United States allows individuals to purchase real estate, make investments, and deposit capital into bank accounts regardless of nationality or residency, but permanent resident status makes the process far easier and more secure. For one thing, having a green card would significantly facilitate travel between the United States and the foreign national’s home country, giving them more access to their own investments. These travel privileges extend beyond the United States to the various countries that hold travel treaties with the United States, so a foreign national may find that after making a successful EB-5 investment, they may travel visa-free to numerous countries they previously required a visa for. And not just that—an EB5 investment participant’s spouse and unmarried children below the age of 21 also gain these travel privileges.

Another advantage that permanent resident status offers to foreign nationals making investments in the United States is easy access to their U.S. bank accounts in the event of U.S. sanctions against their country. EB5 investments are particularly popular among nationals from politically unstable countries, and U.S. sanctions can be a major threat for temporary visa holders, but green card holders avoid such obstacles. Holding permanent resident status also offers a foreign national more legal rights in any legal procedures that may arise with their financial transactions.

Traveling as a Green Card Holder: Unlimited Stay, Freedom to Go Anywhere, Hassle-Free Entry to the United States

Every year, millions of foreign nationals flock to the United States for a visit—but visitor visas are the most restrictive of all. Visa waiver travelers can stay in the country for up to 90 days, and a B2 visa permits a maximum stay of six months (though an extension is possible). However, in both cases, travelers are extremely limited in what they can do while in the United States—study, employment, and paid performances are all forbidden.

Those who make an EB-5 investment and earn a U.S. green card, however, face no such restrictions. They may stay in the United States indefinitely and have the freedom to engage in any educational or employment activity they wish. They may also enjoy facilitated travel to countries with which the United States holds travel treaties, and they can always enter the United States easily by showing the border officer their green card.

Permanent residents do face one restriction that citizens do not: they must be careful spending too much time outside of the United States. To maintain permanent resident status, a green card holder must demonstrate an intention to permanently live in the United States, and this intention may be questioned if a permanent resident spends more than six months of a year outside of the United States. However, with strategic planning, after making a successful EB5 investment, a green card holder may split their time between the United States and their homeland, enjoying a life divided between the two countries.

All around the world, foreign nationals have their sights set on immigrating to the United States. There are indeed many immigration programs in the United States that allow talented foreign nationals to set up house in the land of the free, whether permanently or just for a temporary period. But not all U.S. immigration programs are made equal. Some offer clear benefits over others—and it just so happens that the EB-5 Immigrant Investor Program presents considerable advantages compared to many other U.S. employment-based immigration programs.

What Is the EB-5 Program?

The first thing one must understand about the EB-5 program is that it is not a conventional immigration program. The basic premise of the EB-5 program is that a foreign national makes an EB-5 investment in a qualifying project and, contingent on the fulfillment of program requirements, earns a U.S. green card, allowing them to live in the United States permanently. To avoid fraud and ensure the EB5 investment capital is used to the benefit of the U.S. economy, Congress has introduced a number of requirements for investors to satisfy.

One requirement involves the EB-5 investment amount. To be eligible for the EB-5 program, a foreign national must commit a minimum of $1.8 million to their chosen new commercial enterprise (NCE)—but this amount is halved to $900,000 if the NCE is located in a targeted employment area (TEA). Most EB-5 regional centers work exclusively or almost exclusively with TEA projects, so finding a suitable TEA project is relatively simple.

Further requirements include proving one’s EB5 investment capital is derived from lawful origins, which can be challenging and time-consuming, depending on the sources used. The best practice for proving the lawful sources of EB-5 investment funds is to hire an experienced EB-5 attorney. An attorney can also help a prospective investor select the best EB-5 project for their needs and assist them with conducting the necessary due diligence to maximize the chances of investing in an NCE that will meet the job creation requirements. Indeed, one of the most important requirements to United States Citizenship and Immigration Services (USCIS) is the creation of at least 10 new full-time jobs for U.S. workers, meaning EB-5 investments are a boon to the everyday American public.

The EB-5 program also offers a number of benefits that other U.S. immigration programs may not. Three are outlined below.

EB-5 Investors Can Come from Anywhere

Some employment-based U.S. programs restrict applicants by nationality. This is the case with, for example, the E-2 program, which issues two-year visas for substantial investments in U.S. companies by foreign nationals from treaty companies. Conversely, the EB-5 program offers any foreign national the opportunity to make an EB5 investment and gain permanent residency rights. It should be noted that certain nationalities are indeed disadvantaged, as backlogs for certain countries have resulted in longer waits for EB-5 investors from those countries. However, anyone is free to make an EB-5 investment.

An Investor’s Family Is Also Eligible for Green Cards

One of the most important benefits of the EB-5 program is that an investor’s immediate family members—defined as their spouse and unmarried children younger than 21—are also eligible for EB-5 visas. While some other U.S. immigration programs do allow minor dependent children to enter the United States with their parents, they must apply for permanent resident status on their own when they turn 18. EB-5 investor children gain permanent resident status simply as a result of their parent’s EB5 investment.

The advantages of permanent resident status for minors in the United States are many. EB-5 investors can send their children to public schools for free, immersing them in English and U.S. culture. When the children become college-aged, they will have an easier time gaining admission to U.S. universities, and they may be eligible for in-state tuition savings, depending on the school they are applying to. They will also be able to work freely during their studies, giving them a pronounced edge over F-1 visa students.

EB-5 Investors Can Earn Passive Income

The EB-5 Immigrant Investor Program is the only U.S. immigration program that offers foreign nationals immigrant status while earning them passive income. Most employment-based immigration programs offer status in the United States in exchange for an employed position at a U.S. company, but only the EB-5 program offers the same (or better) immigration benefits for a passive investment.

Not all EB5 investments are passive—if an investor elects to invest directly in an EB-5 project, they will be required to engage in the day-to-day management of the NCE. However, most program participants instead make their EB-5 investment through an EB-5 regional center, which allows them to sign on as a limited partner. Under such an arrangement, the investor needs only vote on important matters and are not even required to live near their project.

How much an investor can earn on their EB5 investment capital depends on the project, of course. However, an investor concerned about the return on investment should comb through the NCE documentation carefully and discern the interest rate. Traditionally, EB-5 investors have earned limited returns on their investments due to low interest rates, but the 80% increase in the minimum investment amount, as directed by the Modernization Rule enacted in November 2019, could result in higher investment amounts until EB-5 demand returns to pre-enactment levels. Thus, acting soon could allow an investor to earn higher-than-normal returns on their passive EB-5 investment.

For many EB-5 investors, the ultimate objective is not U.S. permanent resident status but rather U.S. citizenship. While permanent residents enjoy most of the same rights and freedoms as U.S. citizens, there are limitations: permanent residents are barred from taking up political office, and they must avoid spending too much time abroad, lest they risk their permanent resident status. Citizens, however, may run for office and spend any amount of time outside of the United States without jeopardizing their citizenship.

However, the first step to U.S. citizenship is gaining permanent resident status, which, for most foreign investors, is most easily obtained through an EB-5 investment. By making an EB5 investment in a qualifying EB-5 project, proving the creation of at least 10 full-time jobs for U.S. workers, and meeting all other EB-5 Immigrant Investor Program requirements, an investor can obtain U.S. permanent residency rights for themselves, their spouse, and their unmarried children younger than 21. Then, after five years of living in the United States under permanent resident status (including conditional permanent resident status), the investor and their family may apply for naturalization and become U.S. citizens.

Making an EB-5 Investment

Though the EB-5 program is largely seen as one of the quickest and simplest pathways to a U.S. green card, it nonetheless remains a complex program, and due diligence is imperative for any prospective EB-5 investor. Most EB5 investments are successful and garner their investors a green card, but without proper due diligence, an investor could be putting both their EB-5 investment capital and immigration eligibility at risk.

Other obstacle prospective investors should be mindful of is the long processing times they may encounter. Although there are indications that processing times may shorten significantly in 2021—thanks to the EB-5 Reform and Integrity Act and the U.S. Citizenship Act of 2021, two proposed yet as of March 2021 unpassed bills—throughout the 2010s, long wait times have plagued the program. The situation is particularly dire for investors from China and Vietnam, which have experienced heavy backlogs for several years.

There are no guarantees in the EB-5 program, but those considering making an EB5 investment should familiarize themselves with the best practices for a smooth EB-5 journey.

Work with a Reputable Regional Center

Affiliating with an EB-5 regional center is not mandatory, but it is recommended, and it’s indeed the path taken by most foreign nationals who make an EB-5 investment. Regional centers pool together EB-5 investment capital from a number of different investors, allowing them to funnel investment funds into larger projects. Those investing through a regional center need not involve themselves in the daily management of the new commercial enterprise (NCE), and the job creation requirement is easier for them because they can count indirect and induced jobs. Another benefit is, naturally, the expertise and experience of the regional center operators, who can help protect an investor’s interests and streamline their EB5 investment experience.

When seeking an EB-5 regional center to invest through, an investor should examine a prospective regional center’s track record of approved I-526 and I-829 petitions, the center’s relationship with the project developer, and its history with similar projects. Determining whether past investors have received repayments for their EB5 investment is also wise. Look through the backgrounds and credentials of both the regional center operators and the project developers, and inspect the business plan of the NCE. It’s also a good idea to check the job creation buffer, whether the project qualifies for targeted employment area (TEA) status, and the exit strategy of the EB-5 investment.

Apply Strategically

Applying to the EB-5 program strategically can also have an impact on the speed and smoothness of the process. One area that trips up a lot of investors is the requirement to prove that all their EB-5 investment capital was obtained legally, which, depending on the sources, can be extremely difficult and time-consuming. Investors would be wise to work with an experienced EB-5 immigration attorney to determine which fund sources are easiest to document—failure to do so increases an investor’s risk of receiving a request for evidence (RFE).

Another strategy involves backlogged countries, but the option is only available to a minority of investors. As of March 2021, the countries with EB-5 backlogs are China and Vietnam, but more countries, such as India, South Korea, Brazil, or Taiwan, could join in the future. If an investor hails from a backlogged country but their spouse does not, they are advised to use their spouse’s country of origin on their I-526 petition, which could dramatically accelerate their path toward a green card.

Applying for U.S. Citizenship

Following five years of permanent residency in the United States, starting with the two-year conditional permanent resident status an investor applies for after obtaining I-526 approval, EB-5 investors and their immediate family members may apply to become citizens of the United States. To be eligible, they must maintain their permanent resident status, which generally prohibits travel outside of the United States for more than six months of the year. Permanent residents must also pay all U.S. taxes they owe and abide by U.S. laws to be eligible to apply for citizenship.

To file for U.S. citizenship, a green card holder must file Form N-400, alongside all supporting documentation, and pay the associated fees. Online applications are possible, though an in-person biometrics appointment may be required. The next step is an interview, a citizenship test (which tests an applicant’s knowledge of U.S. history and politics), and an Oath of Allegiance ceremony. The processing times for naturalization applications vary by location.

The EB-5 Immigrant Investor Program represents one of the most popular ways for foreign nationals with the financial means to gain permanent residency in the United States, offering permanent resident status in exchange for a substantial, lawfully sourced, job-creating investment in a qualifying EB-5 project. But it is simultaneously demonized in the press and branded a “citizenship-by-investment” scheme, with opponents hurling commonly cited criticisms left and right. The problem is that most of these criticisms are, in fact, misconceptions.

EB-5 applicants have two choices to make an EB-5 investment: either directly in the new commercial enterprise (NCE) or indirectly through a qualifying EB-5 regional center. The regional center route is selected by the overwhelming majority of EB-5 investors for a number of reasons, not least the relaxed job creation rules that allow investors to count indirect jobs toward the EB-5 job creation requirement. “Indirect job creation? Why, how can we be sure real jobs are truly being created?” the critic may protest, but only because they don’t understand how EB-5 indirect job creation works.

EB-5 Regional Center Legal Structure Renders ALL Jobs Indirect

In EB-5 law, an indirect job is defined as a job created by EB-5 investment capital but not a W-2 job at the particular business entity where the EB-5 investor holds equity membership. This makes it different from the definition of “indirect job” as used by both economists and everyday people, as it can very well include direct payroll jobs registered at the job-creating entity (JCE).

The difference between the EB-5 definition and the economist definition of “indirect job” is best illustrated through an example. Say a foreign national makes an EB-5 investment in a hotel development project. Various construction workers and hotel employees may actively work at the hotel site, but if they are listed on the payroll of contractors or a hotel management company and not the NCE itself, they are considered indirect jobs for EB-5 purposes. However, given that they are dedicated jobs served at the hotel in question, they would be considered direct jobs from an economist’s perspective.

In direct EB5 investment projects, the investor makes an investment directly in the NCE, which doubles as the JCE. Thus, when employees are hired, they are listed on the payroll of the NCE, in which the EB-5 investor is a member, and therefore can be counted as direct jobs. Conversely, a regional center investor makes their EB5 investment through a regional center, which pools the funds of its various EB-5 investors into a dedicated EB-5 fund, structured as a limited partnership, which serves as the NCE. This NCE then funnels the EB-5 investment capital into the JCE. As a limited partnership EB-5 fund, the NCE cannot create any direct jobs, and all jobs listed on the payroll of the JCE are considered, for the purposes of the EB-5 program, indirect jobs.

This means that effectively all regional center jobs are classified as indirect, even if a common-sense definition would see them as direct. The misconception that indirect jobs are solely those on the payroll of NCE suppliers is so pervasive that even government officials subscribe to it, and some politicians even draft anti-EB-5 proposals based on this misunderstanding.

EB-5 Regional Center Investors Cannot Fall Back on Direct Job Creation

Supporters of the abolishment of the EB-5 Regional Center Program—or at least the ability of EB-5 regional center investors to count indirect jobs—often believe that regional center investors could simply fall back on direct job creation to support their U.S. green card eligibility if they were to lose EB-5 regional center sponsorship. After all, that would simply put them on the same playing field as direct investors and constitute proof of real job creation… right?

What these critics don’t understand is the specific wording of EB-5 law and the structure of regional center EB5 investments, as elucidated above. The strict definition of “indirect job” in EB-5 law effectively prevents regional center investors from counting any direct jobs, so if the regional center program were to be discontinued, the thousands of EB-5 investors yet to receive I-526 petition approval would suddenly find their job creation counts drop to 0, even if the JCE has hired a number of payroll employees.

With the EB-5 Regional Center Program’s legal status set to expire on June 30, 2021, the entire EB-5 industry is rallying together for reauthorization. Industry leaders suspect only far-reaching reform will achieve reauthorization, and with a proposed EB-5 reform bill on the table, it is likely that the popular program will ultimately be extended. Reauthorization of the program is critical to the thousands of investors with pending I-526 applications and the millions of EB5 investment capital they have injected into the U.S. economy—termination would effectively result in the nullification of these EB-5 applications. The U.S. government would surely be flooded with lawsuits from rightfully disgruntled EB-5 investment participants, and Congress would have killed a lucrative tool for economic stimulation that created countless new jobs for U.S. workers, whether they were officially counted as direct or indirect.

While an EB-5 investment can be a lucrative financial decision that generates a handsome return on investment, most EB-5 investors participate in the EB-5 Immigrant Investor Program primarily—or even solely—to obtain a U.S. green card and live permanently in the United States. This makes the likelihood of EB-5 approval the driving factor behind many foreign nationals’ decision to make an EB5 investment. There are no guarantees in the EB-5 program—denial is always a possibility. But fortunately, for most EB-5 investment participants, it’s an extremely slim possibility.

The First Step: Filing an I-526 Petition

The first form an EB-5 investor must file with United States Citizenship and Immigration Services (USCIS) is Form I-526, which officially sets their EB5 investment journey in motion. To file an I-526 petition, an investor must have already identified a desired EB-5 project and committed their EB-5 capital to the designated escrow account.

The I-526 is intimidating for many EB-5 investment participants due to its numerous stipulations and required supplementary documents. USCIS uses the I-526 petition to learn more about an investor, their immediate family members, and the project they are making an EB5 investment in, and petitioners must satisfy three key requirements to move forward in their EB-5 journey. First, they must prove that the new commercial enterprise (NCE) receiving their EB-5 investment truly exists and features a viable job creation plan, that they have committed their EB-5 funds to the NCE and will participate in the NCE’s management, and that all their EB-5 capital has been derived from lawful sources.

The source-of-funds requirement is generally the most difficult and time-consuming, depending on the fund sources an investor is documenting. This process can, however, be streamlined by hiring an EB-5 immigration attorney, who can advise an investor on the best fund sources to use and otherwise assist in the I-526 process.

Another tip for compiling a successful I-526 petition is to make an EB-5 investment through an EB-5 regional center, which are USCIS-approved commercial entities that group together EB-5 investments to fund major projects. Reputable regional centers can offer professional guidance to elevate an investor’s chances of I-526 success. A further advantage of regional center investment is that it relaxes the requirement to be involved in the management of the NCE: merely signing on as a limited partner is sufficient for regional center investors.

The Last Step: Filing an I-829 Petition

The I-526 process is the most harrowing part of the EB-5 journey, and I-526 approval makes an investor—and their spouse and dependent children—eligible for two years of conditional permanent resident status in the United States. But investors must follow up with Form I-829 at the end of their two-year residency period to remove the conditions and obtain the right to reside in the United States indefinitely.

With the I-829 petition, USCIS is interested in determining whether the EB5 investment has met all the requirements necessary for a U.S. green card. The most important requirement is the creation of at least 10 full-time jobs for U.S. employees, but the immigration body will also check whether an investor has maintained their EB-5 investment capital at risk throughout the full period of investment. For investors from backlogged countries—especially China—this can lead to the necessity to redeploy EB-5 capital in a new project so that it stays at risk.

Aligning with an EB-5 regional center proves beneficial once again in the I-829 process, facilitating the ever-important count of created jobs. Those who invest directly in an EB-5 project are limited to direct jobs (i.e., those listed on the NCE’s payroll or construction jobs that last more than two years). Those who invest through a regional center, conversely, have the option to additionally count indirect and induced jobs (i.e., those created through the procurement of goods and services by the NCE or by the wages spent by NCE employees in the community). The relaxed job creation rules for regional center investors are the biggest reason for its popularity over direct EB-5 investment.

I-526 and I-829 Approval Statistics

As the above sections illustrate, the I-526 and I-829 processes are long and involved. An investor may wonder whether the approval rates are high enough to justify all the time and effort necessary for an EB5 investment—and the answer is an overwhelming yes. Since 2008, USCIS has approved I-526 petitions at an average rate of 82.9%. Those who invest through regional centers are even better off—most regional centers boast approval ratings exceeding 90% for their investors’ I-526 petitions. This highlights the importance of seeking out a reputable EB-5 regional center, as a long track record of I-526 approvals is a strong indicator of future approval.

The situation is even rosier for I-829 petitioners. Those who have passed the first stage of USCIS adjudication with I-526 approval are highly unlikely to lose their permanent residency rights with the filing of their I-829 petition. Since 2016, USCIS has approved 96% of I-829 petitions, and the lowest approval rate since 2013 was a whopping 90%.

While guarantees are impossible, with the risk of delays, setbacks, and even denial always present, foreign nationals can embark on an EB-5 investment journey with little fear of rejection. As long as an investor earnestly works to fulfill the program requirements and hires an experienced EB-5 immigration lawyer to guide them through the process, they can be confident that they will soon reap the many benefits of U.S. permanent resident status.

The United States is the most sought-after destination for students around the world, with top-ranked Ivy League colleges and other highly esteemed institutes dotting the country. Every year, thousands of foreign nationals enter the United States on an F-1 student visa to pursue a four-year university degree and, hopefully, obtain a job in the United States upon graduation. But the reality is that life as an international student can be difficult.

Those residing in the United States on an F-1 visa may study freely at the university they have enrolled in, but they have limited rights regarding work, generally restricted to taking on employment positions specifically offered by the university. Exceptions do exist for programs that require internships or contain a practical component, but for the most part, an international student’s earning options during their academic career in the United States are limited. This also disadvantages them in the post-graduation job hunt, equipping them with emptier resumes than their U.S. counterparts.

The best solution for international students in the United States looking to improve their status in the United States and procure a richer learning environment is to obtain a U.S. green card through the EB-5 Immigrant Investor Program. U.S. permanent resident status offers a student numerous advantages before, during, and after their university studies—they can enjoy an easier admissions process, potentially qualify for in-state tuition rates, work freely during their studies, and stay indefinitely in the United States even after graduation.

How to Make an EB-5 Investment During College

In most cases, youth themselves don’t possess the amount of capital needed for an EB-5 investment ($1.8 million or $900,000, depending on the targeted employment area, or TEA, designation of the project), but their parents might. Parents routinely donate EB5 investment capital to their college-aged children so they can sponsor their own one-way ticket to the United States. United States Citizenship and Immigration Services (USCIS) accepts funds from a number of sources as EB-5 investment capital, and gifts are a highly established and commonly used one.

All that is needed to make an EB5 investment through gifted funds is to present an agreement specifying that the transaction constitutes a gift and that the recipient is not obliged to repay the donor, along with documentary evidence from the donor that the capital originated from lawful sources. Gathering source-of-funds documentation for the EB-5 investment process can be challenging and time-consuming, and it may be wise for the donor to first consult an EB-5 lawyer to determine the best sources to use.

EB-5 Processing Times

The slow processing times of the EB-5 program are no secret, but in most cases, an international student should be able to complete their EB-5 investment prior to graduation. Investors from backlogged countries—as of February 2021, China and Vietnam—may face additional challenges and delays, but investors from any other country should receive their conditional permanent resident status before their degree.

Additionally, while processing times for I-526 petitions—the initial petition an EB-5 investor must file—have been worryingly long in the late 2010s and beyond, proposed reform legislation promises to hasten USCIS adjudication times. Presented by long-time EB-5 allies Chuck Grassley and Patrick Leahy, the bill aims to, among other measures, reduce processing times, tighten security regulations, and reauthorize the EB-5 Regional Center Program for five years, a far cry from the short-term reauthorizations the program has seen since FY2015. Though not passed as of February 2021, EB-5 industry leaders are optimistic that the bill will see the light of day.

Making an EB-5 Investment from Within the United States

Most foreign nationals who make an EB5 investment do so from their home country, waiting until they obtain U.S. conditional permanent resident status before becoming eligible to make the move to the United States. A minority, however, engages in an EB-5 investment from within the United States, having already obtained temporary residency rights through another visa.

International students fall into this category—nothing prohibits F-1 international students from participating in an EB5 investment and applying for associated permanent resident status. As long as a student’s status remains valid, they have not violated any conditions thereof, they were admitted to the United States lawfully, and they have not committed any crimes that would render them ineligible to apply for permanent resident status, they may apply to switch their F-1 status to permanent residency under the EB-5 program.

Obtaining U.S. permanent resident status prior to graduation is the ideal situation for international students involved in an EB-5 investment. While F-1 international students have a limited window to find employment in the United States and apply for a work permit, U.S. green card holders can take a more leisurely approach, knowing they have the permanent right to residency in the United States. The job search is also easier for those with a green card—employers are disincentivized from hiring foreign workers, making it significantly more difficult for them to obtain employment than it is for citizens and permanent residents.

The numerous problems that have plagued the EB-5 Immigrant Investor Program in the 2010s are well known. 2020 was a particularly difficult year for the residency-by-investment program—and for much of the world—due to the devastation caused by the COVID-19 pandemic, the significantly diminished EB-5 investment demand inspired by the Modernization Rule’s higher minimum required EB5 investment amount, and the financial difficulties and narrowly averted furlough at United States Citizenship and Immigration Services (USCIS). To add to the program’s woes, when the EB-5 Regional Center Program was renewed in December 2020, Congress divorced it from the government spending bill it’s traditionally been coupled with, placing the popular program at risk of termination.

The EB-5 investment community has banded together to enact reform on the program, which is seen as the only viable way to ensure the reauthorization of the EB-5 Regional Center Program. One bill, the EB-5 Reform and Integrity Act, led by Chuck Grassley (R-IA) and Patrick Leahy (D-VT), was introduced to the U.S. Senate in April 2021, and has been backed by EB5 investment stakeholders as crucial to the reauthorization of the regional center program. The bill focuses on reform and integrity measures, as suggested by its name, but also touches on long-term reauthorization for the regional center program.

In May 2021, another bill, H.R. 2901, was introduced to the House of Representatives, this time concentrating on the regional center program reauthorization and other EB-5 Regional Center Program issues. Both bills propose a five-year authorization of the program through 2026, and H.R. 2901 also includes measures to improve accountability and increase trust between EB-5 investment participants and EB-5 regional centers. Introduced by Senators Greg Stanton (D-AZ) and Brian Fitzpatrick (R-PA), H.R. 2901 once again demonstrates the bipartisan interests of maintaining and fostering the EB-5 program, with both senators attesting to the important job creation potential of the residency-by-investment program.

EB-5 investment stakeholders, such as nonprofit industry trade association Invest in the USA (IIUSA) and the Coalition to Save and Create Jobs (CSCJ), have endorsed both bills, expressing their excitement at the introduction of yet another EB-5 reform bill. They urge more EB5 investment stakeholders to get involved and push for swift enactment. Indeed, with the EB-5 Regional Center Program set to expire on June 30, 2021, time is of the essence.

Why Is the EB-5 Regional Center Program So Important?

Even if the EB-5 Regional Center Program were terminated, the EB-5 Immigrant Investor Program itself would survive and continue to offer foreign nationals a chance to relocate permanently to the United States in exchange for funding job creation through an EB-5 investment. So, some may wonder, why is the regional center program so crucial?

Although investors have the option to make an EB-5 investment directly in a qualifying EB-5 project, most choose to invest through a USCIS-approved regional center. Regional center investment provides a number of benefits—instead of dedicating themselves to the everyday management of the new commercial enterprise (NCE), investors can simply join the project as a limited partner and vote remotely on pertinent matters. EB-5 regional center investors also get to count indirect and induced jobs toward their job creation count, making it easier to satisfy EB-5 program requirements. Finally, EB-5 investors benefit from the experience and expertise of EB-5 regional center operators, who can help investors compile their I-526 petitions and otherwise satisfy program requirements.

If the regional center program were terminated, some foreign nationals may still elect to pursue U.S. permanent residency rights through a direct EB5 investment. Many, however, may seek out residency-by-investment programs in other rich, highly developed countries, such as the UK or Australia. If the United States wishes to retain the economic stimulation and job creation afforded by the EB-5 program, enacting reform and reauthorizing the EB-5 Regional Center Program is imperative.

If the popularity of the EB-5 Immigrant Investor Program is anything to go by, it offers important benefits to foreign nationals who choose to embark on an EB-5 investment journey. Throughout the program’s three-decade history, it has helped hundreds of thousands of investors settle into their new, permanent lives in the United States, all the while pumping billions into the U.S. economy and generating hundreds of thousands of jobs for U.S. workers. Though it may be undeservedly branded a “pay-for-residency scheme” by critics (despite subjecting investors to rigorous job creation requirements), it offers some important benefits that render it more than a simple immigration program for foreign investors.

As of February 2021, the EB-5 program has been experiencing ever-longer processing times since 2019. With uncertainty building for those with EB5 investments—particularly those from backlogged China and Vietnam—some foreign investors have opted to pursue residency in Canada or Australia instead of undertaking an EB-5 investment in the United States. However, the EB-5 program offers two important benefits that drive many applicants to ultimately opt for an EB5 investment.

Green Cards for Dependents

No matter how much an investor may wish to relocate to the United States, staying together with their immediate family members is more important to most. A U.S. green card may be essentially useless for an investor if their spouse and dependent children cannot enter the United States with them. EB-5 investment participants with families need not worry—spouses and unmarried children younger than 21 are equally eligible for permanent resident status under the principal applicant’s EB5 investment. This distinguishes the EB-5 program from some other U.S. visa categories, which allow underage children to accompany their parents to the United States but require them to apply for their own permanent residency rights when they turn 18.

Relocating to the United States with one’s children opens the door to a myriad of valuable educational opportunities. With a green card, not only can a dependent child participate in the U.S. public education system, which offers a high-quality, well-rounded education as well as immersion in English and American culture, but they may also be eligible for in-state tuition savings when it comes time to apply to universities. Permanent residents are also put into the same pool as citizens, not international students, when applying to colleges, increasing their chances of admission.

The Opportunity for Passive Income

One of the EB-5 program requirements is that EB5 investment capital remain “at risk” throughout the duration of the investment period. This does not mean the investment itself must be risky but rather that the capital must incur both the possibility of increase as well as the risk of loss. Given that it is an investment, the chance of high returns is inherent and obvious. However, depending on the type of EB-5 investment an applicant engages in, they may be able to earn the returns passively.

Investors must choose between investing directly in an EB-5 project or working with an EB-5 regional center to invest in a project. Direct investors are generally required to engage in substantial, in-person managerial labor. Regional center investors, conversely, usually sign on as limited partners, reducing their managerial responsibilities to voting on pertinent business matters, which can be conducted remotely.

In this way, investors can earn passive returns on their EB5 investment while enjoying their new life in the United States—even in a state far away from their EB-5 project. This opportunity for passive income is unique to the EB-5 program—employment-based immigration programs are abundant, but the EB-5 program is the only one to offer residency rights for a passive investment.

The November 2019 enactment of the Modernization Rule may also financially benefit those who engage in EB-5 investments in 2020 and beyond. The Modernization Rule raised the minimum investment amounts from $1 million ($500,000 for targeted employment areas, or TEAs) to $1.8 million ($900,000 for TEAs), which, in conjunction with the debilitating effects of the COVID-19 pandemic, all but halted new EB-5 applicants. Diminished EB-5 demand could result in higher interest rates as an incentive to attract more investors, which could mean investors earn more competitive returns on their EB5 investments.

The EB-5 investment program requires a capital commitment of $1.8 million from an immigrant investor seeking permanent residency in the United States. However, investors can reduce the minimum investment requirement to only $900k if they choose an investment located in a targeted employment area (TEA). An area is considered a TEA if it is located in either (i) a rural area or (ii) an area experiencing high unemployment.

The COVID-19 pandemic has resulted in dramatic increases in national unemployment, with impacts to specific regions differing greatly. Employment data reflecting the impacts of the COVID-19 pandemic was released by the Bureau of Labor Statistics (BLS) in April 2021. EB5AN’s free national EB-5 TEA map, which allows project developers to instantly check whether an address qualifies as a TEA, has been updated to reflect the most current BLS data.

Prior to the latest BLS data release, entire counties qualifying as TEAs were mostly limited to smaller, or more rural, counties. However, as a result of impacts of the COVID-19 pandemic, counties now qualify as TEAs in more populous urban areas such as Los Angeles County, California, and Brooklyn County, New York.

Read below to learn how TEAs are designated and to see a complete list of the full counties that now qualify as high-unemployment TEAs.

How Are TEAs Designated?

A rural TEA must be located outside of a metropolitan statistical area (MSA) and outside of a town or city with a population above 20,000 people. A high-unemployment TEA must have an unemployment rate at least 150% of the national average. High-unemployment TEA designations are made for individual census tracts, a combination of directly adjacent census tracts, or at the county-wide level. If the area is a combination of adjacent census tracts, the weighted average of that group’s unemployment must reach at least 150% of the national average to qualify as a TEA. Additionally, an entire county can qualify as a TEA if the county-wide unemployment rate is greater than or equal to the unemployment rate requirement for the given period.

What Are the Different Methodologies to Determine a Project’s TEA Status?

The burden falls on EB-5 projects themselves to prove that their site qualifies as a TEA. When calculating unemployment rates for high-unemployment TEA designation, projects use one of three methodologies: (i) ACS, (ii) census share, or (iii) county level.

Updated data from the American Community Survey (ACS) is published by the U.S. Census Bureau each December. Updated data from BLS is published each April and applies to the census share and county-level methodologies. This means that the effects of the COVID-19 pandemic on TEA status were only revealed in April 2021.

What Does the 2020 Report from the BLS Reveal?

The BLS publishes unemployment data at the national, MSA, and county levels. Although entire counties have always qualified as TEAs, these counties were typically less populous counties located in more rural areas. However, economic shutdowns in many major cities in response to the COVID-19 pandemic have increased unemployment rates in many urban areas in the United States. As such, many full counties that now qualify as TEAs include those encompassing large cities with high populations.

Below is a list of the counties that now qualify as high-unemployment TEAs based on the most recently published BLS data. The 2020 national unemployment rate according to the BLS was 8.10%, and high-unemployment TEAs must exhibit an unemployment rate at least 150% of the national average. Therefore, for a full county to qualify as a TEA, it must have an unemployment rate above 12.15% (8.10% x 1.5).

Alabama

• Wilcox County (14.73%)
• Lowndes County (13.33%)

Alaska

• Skagway Municipality (21.45%)
• Kusilvak Census Area (19.36%)
• Denali Borough (15.74%)
• Haines Borough (15.62%)
• Hoonah-Angoon Census Area (13.52%)

Arizona

• Yuma County (17.13%)
• Apache County (12.78%)

California

• Imperial County (22.49%)
• Colusa County (15.95%)
• Tulare County (13.21%)
• Los Angeles County (12.80%)
• Kern County (12.52%)
• Merced County (12.19%)

Florida

• Osceola County (13.54%)

Georgia

• Clay County (12.39%)

Hawaii

• Maui County (17.83%)
• Kauai County (16.18%)

Kentucky

• Magoffin County (16.08%)

Louisiana

• Orleans Parish (12.17%)

Michigan

• Cheboygan County (14.58%)
• Wayne County (13.81%)
• Mackinac County (13.35%)
• Montmorency County (13.14%)
• Lapeer County (12.49%)

Minnesota

• Mahnomen County (13.01%)

Mississippi

• Jefferson County (18.40%)
• Holmes County (16.20%)
• Tunica County (14.86%)
• Humphreys County (14.74%)
• Claiborne County (14.43%)
• Wilkinson County (13.36%)
• Coahoma County (12.53%)

Missouri

• Taney County (12.92%)

Nevada

• Clark County (14.73%)

New Jersey

• Atlantic County (17.76%)
• Cape May County (13.82%)
• Passaic County (12.60%)

New Mexico

• Luna County (15.86%)

New York

• Bronx County (16.03%)
• Brooklyn County (12.53%)
• Queens County (12.53%)

North Dakota

• Rolette County (13.43%)

Pennsylvania

• Cameron County (12.57%)
• Philadelphia County/City (12.37%)
• Elk County (12.30%)

Texas

• Starr County (17.32%)
• Maverick County (15.00%)
• Presidio County (14.73%)
• Zavala County (14.11%)
• Crane County (13.61%)
• Jim Wells County (12.98%)
• Zapata County (12.41%)

Virginia

• Petersburg City (13.95%)

West Virginia

• Calhoun County (16.06%)
• Mingo County (14.25%)
• McDowell County (12.59%)
• Clay County (12.50%)
• Roane County (12.44%)
• Logan County (12.17%)

Wisconsin

• Menominee County (15.34%)
• Forest County (12.42%)

If you would like EB5AN to research and monitor a specific project location for you, please send an email with your request to info@EB5AN.com or schedule a call.

As the world heads into continued turmoil caused by the COVID-19 pandemic, United States Citizenship and Immigration Services (USCIS) has released the EB-5 petition processing data for FY2021 Q1 (October–December 2020). This data release closes out the tumultuous year of 2020, and the figures it offers cannot necessarily be extrapolated for future predictions due to the special circumstances of 2020. Nonetheless, it provides some important insights for foreign nationals currently engaged in an EB-5 investment journey, detailing receipt, approval, and denial rates for I-526 and I-829 petitions.

I-526 Petition Data

Receipts

Not a lot can be said about I-526 petition receipts from October to December 2020 because USCIS simply didn’t include the information in the data release. Instead of a number, the official data table included a “D” in the FY2021 Q1 column of I-526 receipts, which stands for “data withheld to protect applicants’ privacy.” However, it’s likely that the figure was low, considering the COVID-19 pandemic that continued to ravage the world throughout the quarter. Historical trends indeed show record-low I-526 receipt figures throughout calendar year 2020, initially sparked by the massive spike in FY2020 Q1 of investors rushing to file their EB5 investment application before the Modernization Rule increased the minimum investment amounts by 80% in November 2019 but further exacerbated by the pandemic.

Approvals and Denials

As has steadily held true throughout Sarah Kendall’s tenure as chief of the Immigrant Investor Program Office (IPO), USCIS adjudication remained low throughout all of calendar year 2020, including the first quarter of fiscal year 2021. There has been a slight upward trend in I-526 approvals since a record low in FY2019 Q3, but the figures nonetheless remain abysmal compared to USCIS’s productivity prior to Kendall taking the reins. However, FY2021 Q1 is the IPO’s final year under Kendall’s direct influence, as her LinkedIn page indicates that she left her post at the IPO after November 2020. If the new leadership better manages the office’s productivity, EB-5 investment stakeholders could see these figures shooting up in the next data release.

While Kendall’s IPO has continuously faltered on I-526 approvals, denial figures have remained fairly consistent with historical numbers. What this means is that the approval-to-denial ratio has increased, with EB5 investment participants facing a higher likelihood of I-526 denial. This trend is particularly evident when plotted by quarter, with the number of approvals in FY2019 Q3 just barely exceeding the number of denials. While the rate has subsequently improved, it remains far below pre-Kendall figures.

Overall

What the charts make clear is that I-526 productivity at the IPO has stayed low. While it’s easy to chalk up low adjudication figures to the effects of the COVID-19 pandemic, it could equally be argued that the IPO had even more opportunity than usual to adjudicate I-526 petitions, given that many other duties at the IPO were likely slashed due to public health protocols, freeing up more time. FY2021 Q1 also represents the first quarter of an extraordinarily high EB-5 investment visa allowance, with the EB-5 program receiving almost double the typical number of annual EB-5 visas. Barring consular service interruptions, USCIS has the perfect opportunity to whittle down the EB-5 backlogs, but so far, they have chosen to forgo this opportunity.

The good news, however, is that quarterly approvals are up from FY2020 Q4, and if the trend continues, FY2021 will record higher numbers overall than FY2020. The I-526 petition backlog also decreased by 9% in FY2021 Q1, as opposed to the 9% increase recorded in FY2020. Though this may be due more to a lack of incoming I-526 petitions rather than adjudication productivity, the figures are still good news.

I-829 Petition Data

Receipts

Perhaps most striking about the I-829 petition receipt data for FY2021 Q1 is the low number of receipts. Since I-829 petitions must be filed within the final three months of an EB-5 investment participant’s two-year conditional residency period, they should logically reflect I-526 approval figures from a few years prior. With FY2017, FY2018, and FY2019 exhibiting high I-526 approval figures, the low rate of I-829 petition receipts in FY2021 Q1 is concerning. However, USCIS’s inefficiencies in the face of COVID-19 may ultimately be to blame—the agency struggled to issue I-829 receipt notices throughout 2020, which may have resulted in significant underreporting of the number in the current data release. If this theory is correct, FY2021 Q2 may show a spike, unless USCIS continues its failure to issue I-829 receipt notices in a timely manner.

Approvals and Denials

While investors in the I-526 stage of the EB-5 investment journey may not have harbored much love for Sarah Kendall, the I-829 processing situation at the IPO under her leadership was significantly more favorable. Putting a clear focus on I-829 petitions, Kendall delivered higher I-829 approval figures than many of her predecessors. In FY2021 Q1, the number of I-829 approvals was down slightly from the previous three quarters, but it remained higher than the quarterly figures from previous years.

In terms of I-829 denials, figures are also a bit higher throughout Kendall’s reign compared to the numbers recorded by previous IPO chiefs. However, the increase in overall I-829 processing more than compensates for the relatively high denial figures, with the IPO demonstrating a relatively high approval-to-denial rate for I-829 petitions throughout FY2020 and FY2021. The rate has come down slightly in FY2021 Q1 but nonetheless remains higher than many historical rates. All in all, the last few fiscal years have been a positive period for I-829 processing, and the future situation depends on how the new IPO leadership behaves.

Overall

The I-829 processing figures for FY2021 Q1 are somewhat difficult to interpret due to the absence of the receipt figures, but overall, it’s clear that while I-829 adjudication has taken a hit compared to FY2020, processing is still higher than in many previous years. Compared to FY2020 Q4, the I-829 approval number in FY2021 Q1 has decreased by 12%, but compared to the first quarters of previous years, FY2021 is doing relatively well. EB5 investment stakeholders can only hope the new leadership will maintain high I-829 processing while simultaneously increasing I-526 adjudication.

In terms of the I-829 backlog, FY2021 has so far recorded a decrease in the number of pending I-829 petitions. Although it’s only 4%, it’s still much better than previous years, as the I-829 backlog has seen a steady increase since FY2013. However, EB-5 investors shouldn’t get their hopes up prematurely—the drop is likely a result of the low I-829 receipts recorded in FY2021 Q1, which, in turn, may be due to challenges in issuing receipt notices. The data release for FY2021 Q2 should provide more insights into the question of I-829 receipts.

I-526 and I-829 Processing Data Comparison

The takeaway from USCIS’s FY2021 Q1 data release is that I-526 petition processing has continued to underperform, while I-829 petition processing has continued to overperform. No significant differences from FY2020 Q4 can be detected, although processing figures are slightly down in both categories. Massive backlogs remain for both I-526 and I-829, so EB-5 investment participants can continue to expect long wait times to begin their new life in the United States.

However, this data release is somewhat lacking, making it difficult to draw conclusions. The absence of I-526 receipt data means EB5 investment stakeholders won’t know the current EB-5 demand until the FY2021 Q2 data comes out, and the unusually low I-829 receipt data could be due to USCIS inefficiency, but we won’t find out until the next quarter’s data is released.

With all the turmoil of the world in 2020 and 2021, EB-5 investment figures in the next quarters are difficult to predict. The COVID-19 pandemic and the various mutations of the virus threaten additional restrictions and shutdowns, which could impact the ability of U.S. embassies and consulates to process EB-5 visas. EB-5 demand could remain low because of the 80% increase in the minimum required EB5 investment amount, especially after so many businesses and individuals have suffered financial hardship in the face of the pandemic. Finally, Sarah Kendall’s relinquishing of the reins at the IPO might signal a new era for the EB-5 program, depending on what direction the IPO takes under the leadership of new chief Nick Colucci.

Insights to all of these uncertainties may be revealed in the FY2021 Q2 data release. Until then, EB-5 investment stakeholders should focus on the imminent sunset date of the EB-5 Regional Center Program because if the program fails to be reformed by June 30, 2021, it may face termination. The EB-5 community is backing the EB-5 Reform and Integrity Act, which has been introduced in the Senate, as many believe it’s the program’s sole chance at reauthorization.