The COVID-19 pandemic has devastated the world, crippling economies, destroying livelihoods, and wreaking havoc on people’s physical and mental health alike. The EB-5 Immigrant Investor Program has not escaped the virus’s wrath, with thousands of investors unable to proceed with their EB-5 journey due to the temporary suspension of routine visa services at U.S. embassies and consulates.
However, the impact of the pandemic on EB-5 investors is not all negative—in fact, in certain ways, it has provided important advantages for those who have made EB-5 investments. From more EB-5 visas for investors from backlogged countries to a lower risk of EB-5 capital redeployment, for certain investors, it’s a good time to have an active EB5 investment. Investors with pending I-526 petitions or those with I-526 approval awaiting their visa interview are also in luck going forward: the number of available EB-5 visas for FY2021 has skyrocketed.
Annual Distribution of EB Visas
At the beginning of each fiscal year—October 1—United States Citizenship and Immigration Services (USCIS) earmarks a certain number of visas for the five EB programs. The EB-5 program, which has fifth-place preference, receives 7.1% of those visas. Typically, that results in around 10,000 EB-5 visas per year, which is generally enough to cover roughly 3,000 investors every year, considering that the majority also apply for EB-5 visas for their spouse and dependent children.
However, thanks to the wide-ranging effects of the COVID-19 pandemic and the subsequent lockdowns, FY2021 is different. Though the pandemic limited the number of EB-5 visas granted throughout FY2020, it also halted family-based immigration, and each fiscal year, any unused family-based visas from the previous year are rolled over to employment-based visas. In the average year, around 140,000 visas are made available through EB programs. In FY2021, the figure has almost doubled to 261,500. Of that, 7.1% is allocated to the EB-5 program, representing a visa budget of about 18,556 EB-5 visas.
Major Benefits to Chinese EB-5 Investors
While the huge increase in EB-5 visa allowance in FY2021 benefits everyone pursuing an EB-5 investment, it’s particularly beneficial to Chinese and Vietnamese EB-5 investors, who, as of October 2020, are the only foreign nationals subject to EB-5 backlogs. Due to the addition of Hong Kong EB-5 investors to the Chinese queue, the backlog has grown even larger, making the news of extra EB-5 visas even more welcome to Chinese EB-5 investors.
Every year, countries are entitled to up to 7% of the total number of EB-5 visas for the fiscal year. Since the number of available EB-5 visas has jumped so sharply in FY2021, so too has the number of visas available to a single country, increasing from roughly 700 to roughly 1,300. Furthermore, since USCIS estimates the number of pending I-485 petitions and documentarily qualified EB-5 visa applicants is significantly lower than 261,500, EB-5 investors can expect a large number of otherwise unclaimed EB-5 visas to be dished out to Chinese investors waiting in a several-year backlog. FY2021 is USCIS’s opportunity to dramatically reduce EB-5 backlogs, and it may be a great year for Chinese EB-5 investors, notwithstanding the switch to a visa availability processing approach in April 2020, which has, as of October 2020, negatively affected only investors from China.