The EB-5 investment industry has undergone several important changes since 2019. In November 2019, the controversial Modernization Rule changed the guidelines for targeted employment area (TEA) designation and raised the minimum investment amounts significantly. Since the higher minimum investment amounts of $900,000 for TEA projects and $1,800,000 for non-TEA projects made the EB-5 program less accessible for foreign nationals, the industry as a whole was opposed to the Modernization Rule.

However, EB-5 investors received momentous news on June 22, 2021: the U.S. District Court of the Northern District of California ruled that the Modernization Rule had been implemented improperly by the Department of Homeland Security (DHS). As a result of this ruling, the Modernization Rule was invalidated, and its controversial changes were reversed. EB-5 stakeholders celebrated the court’s ruling, and numerous investors rushed to file their I-526 petitions at the minimum amounts of $500,000 for TEA projects and $1,000,000 for non-TEA projects.

Now, the EB-5 program is at a crossroads once more: United States Citizenship and Immigration Services (USCIS) appealed the aforementioned court decision on August 23, 2021. A federal appellate court will once again examine the lawsuit. If the appellate court rules in favor of the Modernization Rule, then USCIS will have succeeded in raising the minimum EB-5 investment amounts once more and reimplementing the other changes. EB-5 investors and project developers are awaiting the court’s decision in suspense.

Possible Consequences of the Appeal

EB-5 investors who have filed Form I-526 at the lower amount of $500,000 may be understandably concerned—how will USCIS’s appeal affect their visa petition? If USCIS wins the appeal, will it reject visa petitions filed at the lower amounts during the Modernization Rule’s lapse?

Investors who filed their petitions at the pre-Modernization Rule amounts can rest at ease. USCIS did not file a motion to stay the Modernization Rule’s repeal, and the agency is currently accepting all direct EB-5 investment petitions filed at $500,000. This shows that USCIS will, in all probability, continue to process these petitions even if it wins the appeal.

Foreign Nationals Should Hurry to Invest at the Lower Amounts

Even if the appellate court does not rule in USCIS’s favor, the Modernization Rule will likely be reimplemented at some point. Therefore, foreign nationals planning an EB5 investment should act quickly to invest at the lower amount of $500,000. EB5AN offers the most trustworthy EB-5 investment opportunities and helps investors get started on the path to permanent resident status.

Since the expiration of the EB-5 Regional Center Program on June 30, 2021, the EB-5 investment industry has been in a state of uncertainty. Regional center investments were suspended because Congress did not pass the EB-5 Reform and Integrity Act. This bill, which was introduced by Senators Patrick Leahy and Chuck Grassley, would have reauthorized the regional center program for several more years. To the dismay of the EB-5 industry, Senator Lindsey Graham blocked a unanimous consent request to pass the act and thus precipitated the suspension of regional center investments. As of August 12, 2021, the program has not been revalidated.

Many EB-5 investors are understandably worried. United States Citizenship and Immigration Services (USCIS) announced on its website that it would cease to accept EB-5 petitions associated with regional centers. Therefore, foreign nationals who made an EB-5 investment in a regional center before June 30, 2021, may be wondering if they will ever be able to obtain U.S. permanent resident status. This article explains what needs to happen for the regional center program to be reauthorized and shows why this is a critical issue for the entire EB5 investment industry.

How Regional Center Investments Could be Reauthorized

Most likely, the regional center program will resume only if Congress agrees to accept the EB-5 industry’s requests for reform or if industry members compromise and settle for legislation that does not make all their desired changes to EB-5 policies. A bill reauthorizing regional center investments will probably have to be passed as part of a larger legislative vehicle. Fortunately, the upcoming budget reconciliation and infrastructure bills could be used for this purpose.

The various stakeholders in the EB-5 investment industry seem unable to agree on what changes should be made to the EB-5 program. For instance, the Reform and Integrity Act did not stipulate significant changes to EB-5 policies: it only introduced new integrity measures. Many EB-5 industry members were looking for more substantial changes to the program, such as an increased number of available EB-5 visas. Controversial changes like this will likely be met with contention, so it is unlikely for thorough EB-5 investment reform to succeed in Congress.

If the upcoming bills do not result in reauthorization for regional centers, the EB-5 industry should lower its expectations for reform and focus on saving the regional center program. In that case, the Reform and Integrity Act may still be viable as it does not make substantial changes to the industry. Realistically, however, any long-term reauthorization of the regional center program will likely have to be accompanied by at least some of the desired changes to EB-5 policies.

The Importance of Revalidating the Regional Center Program

The EB5 investment industry should do all within its power to secure reauthorization for regional centers—the longer the program remains suspended, the greater the consequences. Many EB-5 visas could be wasted, and regional center investors may eventually lose hope and try to get their capital back. USCIS could even start to deny preexisting regional center I-526 petitions, and the EB-5 program’s reputation would be tarnished as a result.

The EB-5 Immigrant Investor Program, which has enabled thousands of foreign nationals to relocate to the United States, underwent significant changes in June 2021. On June 22, a district court repealed the EB-5 Modernization Rule, which had made several unwelcome alterations to EB-5 policies. As a result of the court’s ruling, the minimum EB-5 investment amounts dropped to $500,000 for targeted employment area (TEA) projects and $1,000,000 for non-TEA projects. This news was met with widespread approval across the EB5 investment industry—now, many more foreign nationals will be able to participate in the program.

Shortly after the district court’s ruling, the regional center program was suspended on June 30 because Congress failed to pass the EB-5 Reform and Integrity Act. As of August 12, 2021, the regional center program has yet to be revalidated, and USCIS is not accepting I-526 petitions associated with regional centers. It is unclear when Congress will take action to reauthorize regional center investments, so only direct EB-5 investments are allowed for the time being.

The expiration of the regional center program and the lowered EB-5 investment amounts will likely cause an unprecedented surge in direct investments. Even though there has never been a better time to invest directly, interested foreign nationals should carefully evaluate potential EB-5 projects to reduce their financial and immigration risk. When assessing direct EB-5 investment opportunities, potential investors should consider the following factors.

How likely is it for the project to be completed?

Reliable projects take measures to prepare for a possible shortage of EB-5 investment capital. For instance, they might have a bridge loan or another source of funds to use if only part of the expected EB-5 capital is procured. Signs that a project will likely be completed include a construction completion guaranty and a senior loan with a large bank. Additionally, the project should have access to irrevocably committed funds from the developer.

Will the project generate the required employment?

Every EB-5 investment must create or preserve at least 10 full-time jobs for U.S. workers. Therefore, investors need to evaluate each project’s potential for job creation. The most trustworthy EB-5 projects have an ample projected job cushion—they plan on generating many more jobs than the 10 positions required per investor. Real estate development projects that are already well under construction are especially likely to create the needed jobs.

How reputable is the project developer?

Potential investors also need to do research on the project developer’s background, finding out how many projects it has already completed and how much experience it has. If the developer is currently in a serious lawsuit, has a history of defaulting on loans, or has been unable to complete similar projects in the past, then investors should look for other projects. Unfortunately, foreign nationals have occasionally been the victims of fraud by unscrupulous developers, so an in-person or virtual site visit might also be appropriate.

Foreign nationals planning an EB5 investment need to consider many other characteristics of potential projects, such as their fund disbursement agreement and standing with USCIS. EB-5 experts such as EB5AN offer their clients valuable expertise, helping them to minimize the risks associated with EB-5 investments and choose the safest available projects.

United States Citizenship and Immigration Services (USCIS) has released the September 2021 Visa Bulletin. This monthly publication shows which investors are eligible to apply for and receive an EB-5 visa. Since USCIS is known for its notoriously slow processing times and each country is allotted only a limited number of EB-5 visas, the Visa Bulletins often reflect significant backlogs. However, USCIS’s processing efficiency has shown moderate signs of improvement in recent months. For instance, Vietnam, which had experienced a backlog since 2018, finally achieved “Current” status in the August 2021 Visa Bulletin.

Chart A, “Final Action Dates for Employment-Based Preference Cases”

Chart A of the Visa Bulletin indicates that the final action date for Chinese investors has moved forward one week, from November 15, 2015, to November 22 of that year. Even though this is a small improvement when compared to the Vietnamese final action date’s huge leaps in the July and August Visa Bulletins, any advancement for China is always good news—until the June 2021 bulletin, China’s final action date had not budged for over a year.

This news means that Chinese foreign nationals who made an EB-5 investment, successfully filed Form I-526 on or before November 22, 2015, and applied for an EB-5 visa are now eligible to receive conditional permanent resident status. Interestingly, the Chinese final action date also advanced by one week in the August 2021 Visa Bulletin. If this trend continues, it will take several years before the Chinese EB-5 backlog is cleared.

Foreign nationals planning an EB-5 investment should note that the regional center values in Chart A are marked as “U” (unauthorized) because the regional center program was suspended on June 30, 2021. Congress failed to pass the legislation necessary to reauthorize regional center projects, but EB-5 investment stakeholders are confident that the program will be revalidated in the coming months.

Chart B, “Dates for Filing of Employment-Based Visa Applications”

Unlike Chart A, Chart B does not contain much good news for the EB-5 investment industry. China’s date for filing remains the same: December 15, 2015. Disappointingly, this date has remained stagnant for over 12 months. Even though improvements in the final action date should ostensibly push forward the date for filing, this has not been the case for China. As a result, Chinese investors who filed Form I-526 after December 15, 2015, are not allowed to submit their visa petitions to the National Visa Center (NVC).

Even though USCIS backlogs continue to plague the EB-5 investment industry, the September Visa Bulletin reflects some progress toward clearing the Chinese backlog. Still, Chinese foreign nationals who have made an EB5 investment must exercise extraordinary patience—they may have to wait for several years before applying for their well-deserved visas. Since the EB-5 industry is in a constant state of flux, interested foreign nationals should work with experienced consultants such as EB5AN, who can help them identify the most reliable and convenient EB-5 projects.

Although the EB-5 Immigrant Investor Program came into existence in 1990, it took the residency-by-investment program around 20 years to gain traction and witness a large number of investors pursuing a U.S. green card through an investment. In fact, for many years, the program issued far fewer than the annual 10,000 visas it was allocated. That changed in the 2010s, when EB-5 demand skyrocketed, particularly in China. In 2021, China is still a major EB-5 market, but the landscape has diversified, with the EB-5 program attracting investors from more and more nations.

Why has the EB-5 program exploded in popularity? The increasing demand for an EB-5 investment is attributable to a number of reasons. Here are four key factors.

1. A Quick and Simple Pathway to U.S. Permanent Residency

U.S. immigration is almost never quick or easy. That said, an EB5 investment offers a quicker, easier way to obtain a green card than most paths available to investors. Even though United States Citizenship and Immigration Services (USCIS) has processed EB-5 applications notoriously slowly since 2019, indications are positive that new legislation and new leadership may soon restore processing times to their originally intended lengths, taking processing from a matter of years to months. For example, the proposed U.S. Citizenship Act of 2021, if passed, would enact measures toward clearing up the long backlogs in the EB-5 program and other USCIS programs.

As of July 2021, those making EB-5 investments from China face backlogs, but investors from other countries do not. Thus, depending on USCIS processing productivity, most EB-5 investors could see their I-526 petition approved in just months. Following I-526 approval, EB-5 investors may schedule a visa interview at their local U.S. embassy or consulate, if they are living abroad, or submit Form I-485 to adjust their immigration status, if they are already in the United States on a different visa.

2. Green Cards for the Whole Family

The EB-5 program is a family-friendly program—principal investors are allowed to include their spouse and unmarried children younger than 21 on their EB-5 application. Assuming the EB-5 investment is successful, the entire family is eligible for EB-5 visas, meaning family members obtain access to a permanent life in the United States at the same time as the investor, avoiding delays that might be associated with other programs. There is no limit to the number of children an investor can add, as long as they are all unmarried and younger than 21.

3. A Bright Future for Your Kids

In many cases, foreign nationals engage in EB-5 investments not necessarily to secure benefits for themselves but to provide a better future for their children. School-aged children who hold green cards can be enrolled in U.S. public schools, which provide a high-quality, holistic education that doubles as linguistic and cultural immersion for immigrants. College-aged green card holders enjoy a much less competitive admissions process to U.S. post-secondary education institutes, as they are considered alongside U.S. citizens, not international students, and they may be eligible for in-state tuition savings, depending on their school.

Education is not the only benefit—foreign nationals who make an EB5 investment are also securing a better health care landscape for their family, as well as economic and political stability. U.S. medical facilities are the most technologically advanced in the world, sometimes offering treatments not available elsewhere, and Americans enjoy a high quality of life with strong economic and political institutions. In this way, EB-5 investors can protect their children from potentially volatile situations in their home country, providing an environment for them to thrive.

4. Access to the World’s Largest Economy

The United States dominates the global economy, commanding the largest economy in the world. Though the devastating COVID-19 pandemic has set the entire world back, the U.S. economy is recovering steadily and is forecast to return to pre-pandemic levels by summer 2021. The United States’ economic growth following the destruction of COVID-19 has been phenomenal, indicative of a strong, resourceful economy that can shoulder major challenges like the worldwide shutdowns enacted in response to the pandemic. A green card lets a foreign national freely take employment anywhere in the United States, tapping into this valuable economy. In fact, EB-5 investors can live and work anywhere in the United States upon receiving their two-year conditional permanent residency rights, and in most cases, investors can earn passive income from their EB5 investment.

Since 1990, the EB-5 investment program has made it possible for foreign nationals to relocate to the United States by investing in qualifying businesses. Foreign nationals who make a successful EB-5 investment are given a green card and can even apply for citizenship after holding permanent resident status for five years. Of course, the EB-5 investment industry is not only good for investors—since each EB-5 investment must generate at least 10 jobs, the U.S. economy also benefits from this much-needed source of capital.

The EB-5 program is also popular because of the flexibility that it grants to investors: foreign nationals from any country can participate, and their family members are also entitled to receive permanent resident status. In addition, United States Citizenship and Immigration Services (USCIS) allows investors to use a wide variety of sources of funds to obtain EB-5 capital.

USCIS is also flexible regarding the way EB-5 investments are made. In some cases, foreign nationals are not required to provide all of the EB5 investment capital right away—instead, they can make what is known as a partial or installment investment.

How Partial Investments Work

A partial EB-5 investment occurs when a foreign national makes an initial investment and later provides the rest of the funds in installments. After providing the initial funds, the investor will be given a set period (usually 6 to 12 months) to contribute the rest of the EB-5 capital.

The investor must give the EB-5 project a promissory note with a pledged security interest in assets worth at least as much as the amount of capital that will be paid in installments. The EB-5 project that holds this promissory note will have an enforceable lien on the investor’s pledged asset(s). Therefore, if the investor fails to provide the needed capital within the agreed period, the EB-5 project will be able to liquidate the pledged asset(s) and receive the promised funds.

USCIS allows partial investments because they constitute an irrevocable commitment of the EB-5 funds. The USCIS Policy Manual states that EB-5 investors “must document the path of the funds to establish that the investment was made, or is actively in the process of being made, with the immigrant investor’s own funds.” In light of this policy, partial investments are considered as “actively in the process of being made.”

Still, USCIS carefully examines partial EB-5 investments to make sure that the pledged funds will indeed be provided within the approved period. Therefore, investors must document the terms of their partial investment in great detail when they file Form I-526E and submit other documents to USCIS. It is especially important to prove that the lien is enforceable by the promissory note holder—doing so indicates that the EB-5 investment funds have been irrevocably committed to the project.

A Hypothetical Example of a Partial EB-5 Investment

In practice, how could a foreign national make a partial EB-5 investment? Suppose that a potential investor only has $300,000 to invest. The minimum EB5 investment amount for targeted employment area (TEA) projects is $800,000, so the investor would need an extra $500,000 to make an investment. However, he has the means to provide the $500,000 in installments. The investor also owns a liquid asset: a hotel property that has a market value of more than $500,000. The investor controls 100% of the hotel’s equity.

Now, the investor can make an EB-5 investment of $300,000 and provide a promissory note for $500,000 with a pledged security interest in the hotel. Through the promissory note, the EB-5 project will have an enforceable lien on the hotel. Of course, an independent report will have to prove that the hotel property is worth at least $500,000.

The investor will be given a period of 6 to 12 months to pay the remaining $500,000 in installments. If he fails to do so, the EB-5 project will be able to enforce the lien against the hotel.

To help guide EB-5 visa applicants through the partial investment process, EB5AN and Beshara Global Migration Law Firm presented a joint webinar explaining how to make a partial EB-5 investment. Download the presentation below or watch the webinar on YouTube to learn more about partial investments.

Why Make a Partial EB-5 Investment?

If an EB-5 investor cannot invest the full amount of $800,000 straightaway, making a partial investment and then completing the investment amount in installments can avoid unnecessary delays in the immigration process. The investor and their dependent family members may be able to relocate to the United States sooner through a partial investment.

Moreover, under the EB-5 Reform and Integrity Act of 2022, EB-5 investors who already live in the United States under a non-immigrant visa can now file the I-526E and I-485 petitions concurrently. Since Form I-485 is used by EB-5 investors to adjust their immigration status, filing the petitions concurrently can allow investors to change their status to “pending adjustment” and apply for employment authorization.

EB-5 investors who file forms I-485 and I-526E concurrently may be able to obtain employment authorization in six months—or less. This provision can also be useful to investors whose non-immigrant visas are nearing expiration.

EB-5 investors who hold non-immigrant visas such as the H-1B, L-1, E-2, F-1, and TN categories may consider making a partial investment.

Wohali Utah: An Institutional-Quality EB-5 Project Accepting Partial Investment

EB5AN is currently accepting partial investments in its Wohali Utah project near Park City, Utah. This residential golf community in a scenic natural location offers EB-5 investors high chances of immigration and financial success: more than 300 EB-5-compliant jobs have already been created, and EB-5 investors in Wohali Utah will receive job creation and I-526E approval refund guaranties. In addition, the Wohali Utah development follows a proven and profitable business model in the housing sector.

Wohali Utah’s designation as a rural TEA puts investors in line for set-aside EB-5 visas, which can remove years-long delays in the immigration process for investors from countries with an EB-5 visa backlog. Investors will also receive priority processing of Form I-526E.

For more information on how to make a partial investment in Wohali Utah, or for further information on partial EB-5 investments, please schedule a call with EB5AN. Partial EB-5 investment can accelerate the EB-5 immigration process and help EB-5 investors relocate to the United States sooner than would otherwise be possible.

The EB-5 Immigrant Investor Program renders invaluable assistance to the U.S. economy by providing local businesses with much-needed EB-5 investment capital. Due to the thorough source-of-funds evaluations carried out by United States Citizenship and Immigration Services (USCIS), project developers can be sure that their EB-5 investment funds were sourced legally by qualifying foreign nationals.

Despite the massive success of the EB-5 program and the thousands of foreign nationals that have obtained permanent resident status through it, the EB-5 investment industry has been subject to ever-changing government regulations. This has been particularly true since November 2019, when the controversial EB-5 Modernization Rule came into effect. To the disappointment of most industry members, the Modernization Rule significantly raised the required minimum investment amounts.

June 2021 was an even more volatile period for the EB-5 program. On June 22, the U.S. District Court of the Northern District of California ruled that the Modernization Rule had been implemented improperly by the Department of Homeland Security (DHS), thereby invalidating the higher investment amounts. As the EB-5 program returned to its pre-November 2019 status, investors and project developers alike celebrated the court’s ruling. However, another abrupt change to the EB-5 industry came shortly afterward: on June 30, the regional center program expired because the Senate had failed to pass a critically important EB-5 reform bill. The regional center program and the Modernization Rule could potentially be reauthorized in the future, but it is unclear if or when this will happen.

These cataclysmic events in the EB-5 investment industry have changed the way investors and project developers operate. As of June 2021, investors can only make direct EB-5 investments due to the suspension of the regional center program. Direct EB-5 investments have been a part of the EB-5 program since its beginning in 1990, and they will likely experience a surge in popularity.

Advantages of Making a Direct EB-5 Investment

When compared to regional center investments, direct projects usually offer investors more control over how their EB-5 investment capital will be used. Therefore, foreign nationals who are looking to gain significant profits through the EB-5 program as well as permanent resident status often choose to invest directly. Further, direct EB-5 projects are allowed to receive investments at the reduced amounts of $500,000 for targeted employment area (TEA) projects and $1,000,000 for non-TEA projects.

Perhaps the greatest benefit direct investments offer is their stability—unlike the regional center program, the direct EB-5 investment industry does not depend on periodic government reauthorization. In light of the events that transpired in June 2021, many foreign nationals will likely opt for the stability of direct investments.

Requirements for Direct EB-5 Investments

A successful direct EB-5 investment must fulfill all the basic requirements of the EB-5 program—the investment must be made to a qualifying new commercial enterprise (NCE), create or preserve at least 10 full-time jobs, and use legally sourced funds. The principal difference between direct and regional center EB-5 investments is that the former are made directly to the NCE in question and not through a regional center.

Moreover, foreign nationals who make a direct EB5 investment must fulfill strict job creation requirements. Direct EB-5 projects are not allowed to count indirect or induced employment toward creating the needed jobs. Rather, the NCE must create 10 full-time jobs directly, and these positions must appear on the project’s payroll. Jobs created by a direct EB5 investment must last for a minimum of two years and be filled by qualifying U.S. workers.

Foreign nationals interested in making a direct EB-5 investment have many options. Direct investors often choose to work with technology, infrastructure, hospitality, or construction projects. Despite the wide variety of EB-5 projects available, investors should carry out thorough research on each project to ensure its legitimacy and verify that it will be able to create the needed jobs. EB5AN has a 100% I-526 and I-924 approval rate, offering some of the most reliable projects in the EB5 investment industry.

EB5AN offers a free interactive targeted employment area (TEA) map that allows users to determine whether an address is in a TEA. In addition to determining TEA eligibility, users can also download a free TEA qualification report to include with their United States Citizenship and Immigration Services (USCIS) petitions.

Why Is TEA Designation Important?

The EB-5 investment program’s most challenging requirement is usually the minimum investment amount. Foreign nationals interested in becoming permanent U.S. residents must put up at least $1,000,000 of their lawfully sourced capital if their project is located outside a TEA.

However, the minimum EB-5 investment amount is only $500,000 for projects located in TEAs. Due to this reduced investment requirement, TEA projects are far more popular among EB-5 investors—in fact, 95% of all EB-5 investors choose TEA projects.

How Are TEAs Designated?

An area is designated as a TEA if it is rural or has high unemployment. A rural TEA cannot be in a metropolitan statistical area (MSA) or on the outskirts of a city or town with a population greater than 20,000. High-unemployment TEAs must have an unemployment rate at least 150% above the national average.

USCIS accepts four calculation methods for TEA eligibility. Only one of these methods relates to rural TEA designation: rural TEAs must use regional data from the U.S. Office of Management and Budget and the most recent 10-year U.S. census.

The three other methods all deal with high-unemployment TEAs:

1. The ACS calculation method uses census tract data from the five-year American Community Survey (ACS).
2. The county-level method uses Bureau of Labor Statistics (BLS) data for an entire county.
3. The census-share method uses a combination of census tract data from the five-year ACS and county-level data from the BLS.

EB-5 investors must provide documentation in their I-526 petition proving that their project is in a TEA.

Data from TEA Map Searches

Most EB5AN TEA map searches carried out from October 26, 2020, to May 13, 2021, looked for addresses located in just three states—Florida, California, and Texas. California has the highest percentage of addresses that qualify as TEAs: a remarkable 64%. Across the United States, approximately 60% of searched prospective project sites currently qualify as TEAs.

If you are interested in finding out whether an address falls within a TEA, please visit EB5AN’s interactive TEA map.

Thousands of foreign nationals have benefitted from participating in the EB-5 Immigrant Investor Program and are currently enjoying the benefits of obtaining U.S. green cards for themselves and their immediate family members. The EB-5 program enables foreign nationals to invest in qualifying U.S. businesses, create at least 10 full-time jobs, and thus apply for permanent resident status. Since 1990, the EB-5 investment industry has had a remarkably positive impact on the United States, providing businesses with invaluable investment capital. Moreover, the successful and wealthy foreign nationals who relocate to the United States through their EB-5 investments become valuable assets to the country.

Despite their positive effects, the EB-5 program’s regulations are subject to government modification, which has occasionally resulted in sudden changes to the EB-5 investment industry. Two of the most notable examples of such policy changes took place in June 2021. On June 22, a federal court ruled to invalidate the EB-5 Final Rule, a controversial set of regulations that had made several important changes to the EB-5 program. The most significant change brought about by the Final Rule was the raising of the minimum required investment amounts. As of the June 22 ruling, foreign nationals are allowed to make an EB5 investment at $500,000 for targeted employment area (TEA) projects and $1,000,000 for non-TEA projects.

Just a few days after the court ruling, the EB5 investment industry received another shock when the regional center program expired on June 30, 2021. The Senate had failed to pass the EB-5 Reform and Integrity Act, a bill that would have reauthorized regional center investments for several more years. Even though this suspension is likely temporary, many foreign nationals interested in making an EB-5 investment may have been discouraged by the news—after all, regional center investments had been the most popular way to participate in the EB-5 program. Despite these abrupt changes, EB-5 investors still have at their disposal a promising alternative to regional center projects: direct EB-5 investments.

What Are Direct EB-5 Investments?

Direct EB-5 investments are made directly to the EB-5 business in question and not to a regional center. United States Citizenship and Immigration Services (USCIS) has set stricter job creation requirements for direct EB-5 projects—direct investors can only count jobs that are created by the EB-5 business and appear on its payroll. Since indirect and induced jobs do not count toward fulfilling the employment creation requirement, it is usually more difficult for direct EB-5 investors to generate the necessary number of jobs.

Interested foreign nationals should note that, as of June 30, 2021, they are only allowed to make direct EB-5 investments. In fact, USCIS released a statement on its website confirming that they will no longer accept I-526 petitions associated with regional centers. In contrast, the direct EB5 investment industry does not depend on periodic renewal.

Why Make a Direct EB-5 Investment?

Despite the stricter guidelines for calculating employment creation, direct EB-5 projects do qualify for the above-mentioned reduced investment amounts. Moreover, many foreign nationals find that direct EB-5 investments may better suit their needs if they want to gain significant profits as well as permanent resident status: direct projects typically offer investors more control over operations and management decisions than regional center projects, in which investors do not necessarily have to be involved in day-to-day operations.

Direct EB-5 investors are allowed to invest in a wide variety of businesses. They may even choose to invest in a troubled business, an existing business, or a new branch of a franchise. The latter option offers several enticing benefits for investors, allowing them to enjoy the existing franchise’s marketing, experience, and successful branding.

As the above facts indicate, direct EB-5 investments are a promising alternative to regional center projects. Keeping in mind that the minimum investment amounts may be raised once more, potential investors would do well to identify suitable direct EB-5 investment opportunities as soon as possible.

For years, China has been the country with the largest overall number of applicants to the EB-5 Immigrant Investor Program. As a result, Chinese investors seeking a Green Card in the United States through the EB-5 program have had to contend with challenges and delays, unlike foreign nationals from any other country in the world.

This article will examine the historical and current trends in the Chinese EB-5 visa market, exploring the number of unique challenges Chinese investors face—from visa retrogression to long processing times—while also explaining a key strategy to help overcome some of the most persistent obstacles.

How Interest in the EB-5 Visa Program From Chinese Investors Has Evolved Over Time

The demand for EB-5 visas among Chinese investors has been high for many years, but interest has fluctuated over time due to various factors. From 2010-2014, demand from Chinese investors for EB-5 visas surged as rapid economic growth swept across mainland China, increasing wealth and leading to a spike in high-net-worth individuals. In 2014, Chinese investors were issued more than 9,000 of the 10,000 available EB-5 visas.

Beginning in 2018, the EB-5 visa processing time for Chinese applicants slowed down considerably, leading to a drop in demand. Additionally, certain policy changes, particularly increased scrutiny about what constitutes a lawful source of funds (SOF), led to further declines in demand among Chinese investors.

However, Chinese investors’ demand for EB-5 visas began to rise again after the enactment of the EB-5 Reform and Integrity Act (RIA) in 2022, which introduced policy changes that increased visa availability while speeding up processing times. More on the impact of the RIA’s reforms will be explored later in this article.

The EB-5 Visa Challenges Facing Prospective Chinese Applicants

Because demand among Chinese citizens for EB-5 visas has been high for so long, they have had to face many unique challenges. This section will explore some of those challenges in greater depth.

EB-5 Visa Retrogression

Because of the sheer number of Chinese investors who are interested in the EB-5 visa program, there has been a backlog in Chinese EB-5 petitions since May 2015. As of May 2024, the backlog is still far from being cleared.

This backlog is the result of “visa retrogression,” which occurs when the demand for EB-5 visas exceeds the per-country limit in a given year. Historically, there are only 10,000 EB-5 visas available during each immigration fiscal year (October 1 to September 30). Those 10,000 available EB-5 visas include those available for the investor as well as their spouse and any unmarried children under 21. As a result, the number of families that are eligible to apply for conditional Green Cards through the EB-5 program each year may actually be much lower than 10,000.

Furthermore, the government imposes a per-country quota on available EB-5 visas to make the distribution from one country to the next more equitable. If that limit has already been reached for a particular year, then prospective EB-5 investors need to wait one additional year for their Form I-526E to be processed—a situation known as “visa retrogression.” For backlogged countries like China, where visa demand far outpaces visa supply, many investors may have to wait several years just to begin the process of applying for U.S. permanent resident status through the EB-5 program.

Long EB-5 Visa Processing Times

Chinese investors face longer wait times than foreign nationals from any other country. In fact, the situation for Chinese investors is so unique that, in 2020, the United States Citizenship and Immigration Services (USCIS) website introduced a separate estimated processing time range for Chinese investors.

The most recent estimated EB-5 visa processing times can be found on the USCIS website. These wait times indicate the amount of time it typically takes to process 80% of all applications received. That means that the vast majority of applications will be processed more quickly than the wait time provided by USCIS. However, USCIS does not give any information on the longest or the shortest EB-5 visa wait times.

When EB-5 investors submit Form I-526E, they are given a priority date, which is the date that USCIS receives the form. EB-5 investors from every country other than China and India are eligible to apply for their visas as soon as their I-526E petitions are approved. However, Chinese EB-5 investors are subject to a final action date—they must wait until this date, which is periodically pushed forward, catches up with their I-526E priority date. As a result, EB-5 investors from mainland China may have to wait several years before they can even apply for their EB-5 visas.

The U.S. State Department’s July 2024 Visa Bulletin announced that China’s final action date remains December 15, 2015. Therefore, Chinese EB-5 investors who submitted their I-526E petitions after that date are not yet allowed to apply for their EB-5 visas as of July 2024.

Chinese EB-5 investors do not only have to wait for the final action date to advance—they must also factor in the immigration agency’s adjudication times for their I-526E petitions. USCIS (or the State Department’s National Visa Center) may take several years to evaluate a Chinese EB-5 investor’s application.

Difficulties Funding Projects and Proving Source of Funds

Restrictions on annual remittances can also be a major challenge for potential investors from mainland China. China imposes a limit of $50,000 that can be transferred out of the country each year. To combat these restrictions, Chinese investors have relied on various methods to get around the limit, such as combining funds with other Chinese nationals or transferring their money through accounts in Hong Kong. However, Chinese authorities have been tightening controls, making these transfers more challenging. Still, Chinese investors continue to explore new ways to transfer funds for investments in the United States.

These government limitations also have an impact on Chinese investors’ ability to prove the lawful source of their investment funds. This has become especially challenging as USCIS has increased its own scrutiny, demanding detailed documentation to prove the legal source of capital investment for the EB-5 program. It is highly recommended that Chinese investors—as well as investors from other countries—consult with an experienced immigration attorney to ensure their investment funds are lawfully sourced.

How Can Chinese Nationals Invest in the EB-5 Program?

When the RIA was enacted in 2022, it introduced several policy changes that made the process easier for EB-5 investors, particularly those from mainland China. The law provided the option of EB-5 concurrent filing, allowing investors to file Form I-526E and Form I-485 at the same time, helping to significantly streamline the EB-5 process.

In addition, the RIA introduced new minimum investment thresholds. The updated amounts currently stand at $800,000 for projects located in targeted employment areas (TEAs), as opposed to a minimum investment of $1,050,000 for a new commercial enterprise in other areas. A TEA is defined as:

• An area with a population of fewer than 20,000 people; and
• An unemployment rate of at least 150% of the national average.

These areas are designated based on U.S. census information. The most important aspect for Chinese investors, however, is the potential to avoid visa backlogs and obtain a fast-tracked Green Card by investing in rural TEA projects. The RIA allocated 20% of available EB-5 visas to applicants investing in rural TEA projects—along with an additional 10% for high-unemployment TEAs and 2% for public infrastructure projects. As a result, while there are still some significant backlogs of EB-5 applications in the unreserved category, these set-aside visa categories have been a promising development for investors from mainland China.

Invest in TEA Projects With EB5AN

Currently, there is no additional waiting period or backlog for the reserved EB-5 visa categories. However, the availability of these visas is limited, and there is a possibility that these categories could become oversubscribed in the future. Prospective Chinese EB-5 investors are strongly advised to submit their petitions promptly to secure their place while these reserved visas are still accessible.

EB5AN has helped more than 2,300 families from 60 countries obtain U.S. Green Cards, and we can do the same for you. To begin your family’s journey toward becoming U.S. Green Card holders, schedule a free meeting with our expert team today.