December 2021 Visa Bulletin (airport analogy)

The December 2021 Visa Bulletin has a “Current” Final Action Date and Filing Date for China in the 5th Non-Regional Center preference category (C5 and T5).  This means that in the month of December, direct EB-5 Chinese applicants who are documentarily qualified at the visa stage can proceed to get visas, regardless of priority date. Even more exciting, Chinese direct investors with I-526 approval can file visa applications (and probably I-485, though USCIS hasn’t updated its AOS page yet).

According to the visa bulletin methodology, the current final action date means that the number of Chinese direct EB-5 applicants who are documentarily qualified at the visa stage must be quite small – well under the total EB-5 visas currently available for China. That is no surprise, considering that direct EB-5 has historically accounted for less than 10% of EB-5 demand from Chinese, and that USCIS’s slow-walking of Chinese I-526 processing under the visa availability approach has prevented many applicants from reaching the visa stage. Shame on USCIS, for contributing to visa loss by not processing petitions! (The Visa Bulletin adds a warning note just in case the number of direct EB-5 Chinese applicants proves larger than Department of State expects: “if China-mainland born number use were to materialize at a level which could potentially jeopardize visa availability under the overall FY-2022 Employment-based Fifth preference annual limit it would then be necessary to once again impose a final action date.”)

The Visa Bulletin Section D clarifies how the situation will change if the regional center program is reauthorized soon. “If there is legislative action extending this category for December, the final action dates would immediately become “Current” for December for all countries except China-mainland born I5 and R5, which would be subject to a November 22, 2015 final action date.”

This is the first time that the Visa Bulletin has allowed direct EB-5 priority dates to move ahead of regional center dates at the visa stage. Presumably Department of State made the move for December 2021 to minimize visas simply going to waste during the on-going regional center program expiration, as I discussed in a previous post. At most a few thousand visas issued out-of-order to China-born direct EB-5 investors is a couple thousand fewer visas to go unused in FY2021. Chinese regional center investors are losing visa availability by the day during RC program expiration regardless, so I don’t see the announcement as much additional harm for them. Visas that don’t go to direct EB-5 applicants would likely otherwise just be lost to EB-1 this year or family next year. The visa bulletin change is good news for those few Chinese direct investors who are in a position to protect children by filing visa applications, or far enough along with paperwork to jump at the chance for final action.

When interpreting the Visa Bulletin, be sure to remember that EB-5 is a multi-step process. Visa Bulletin announcements reflect and pertain to Step 2 (visa application stage), not Step 1 (I-526 processing stage).  A “current” final action date in December 2021 reflects low demand and high supply at the visa stage as of December 2021, and applies to people who have visa/I-485 processing nearly complete as of December 2021. It does not necessarily mean anything for people earlier in the process.

Consider that the Visa Bulletin was “Current” for China in April 2015, but a Chinese who filed I-526 in April 2015 was not “current” by the time he reached the visa stage, and indeed didn’t get a chance for a visa until March 2020. The Chinese investor who started the process in early 2015 waited five years for visa availability as a natural function of demand leading up to 2015 and supply since 2015 (and naturally regardless of supply/demand conditions that determined wait times for people finishing the process in 2015, and the visa bulletin in 2015).

Think about the analogous situation of gate announcements in the airport, and what such announcements mean for people who are not yet checked in and through airport security.

Here’s an airport with crowds at the gate and at check-in. Flights are overbooked and check-in is understaffed, but suddenly there’s a special gate announcement: all green shirts in the boarding area can get the seats on the flight. What should be the thought process of that green-shirted guy in the outside right corner, as he thinks about whether or not to bother going to the airport?

On the one hand, there’s a special deal right now at Gate 3, and green-shirted people in the boarding area are being given seats on the plane with no wait. This guy has a green shirt. On the other hand, the guy isn’t in the boarding area and can’t just go straight there – he has to check in and get through security first. His future experience at Gate 3 will not be determined by gate announcements at the time he walks in the airport door, but by gate announcements when he’s finally at the gate. He has to think about how long it will take to get ticketed and checked in and through security, and what conditions are likely to be at Gate 3 by the time he gets there. There aren’t so many green-shirts ahead of him, but large crowds generally, a question of how long the green-shirt-priority boarding will last, and apparently just one employee working on check-in. The guy will be wise to consider factors such as these, in addition to the current gate announcement, when calculating his potential wait to get a seat on the plane. Such factors are particularly important in the EB-5 context, with multi-year processing times and crowds in the thousands and tens of thousands.

Understanding the Audience: Senator Leahy

The FY2022 Appropriations Act is the nearest-term hope as a vehicle for regional center program authorization, and I hear that all sides are committed to grasping that opportunity. (The appropriations act is due by December 3, 2021, and could well be delayed by Congressional fights unrelated to EB-5. But I’m relieved to hear that EB-5 negotiators are not counting on delay, but still hustling to be ready to catch the opportunity as soon as it could possibly come.) The appropriations opportunity focuses attention on Senator Leahy, who has a gatekeeper position as Chairman of the Senate Appropriations Committee. What are Senator Leahy’s interests and motivations when it comes to EB-5 legislation?

Senator Leahy is a long-time regional center program champion. His website celebrated in 2013 “Senator Leahy was the driving force behind every reauthorization since enactment.” He is also passionate about program integrity and reform, and long instrumental in EB-5 legislative efforts. The successes and difficulties of Vermont Regional Center have colored his efforts. Over the decades, Senator Leahy has published thousands of words about his EB-5 interests. I’m sharing below notes that I made when reading articles tagged with the “EB-5” category at leahy.senate.gov. I hope that reviewing Senator Leahy’s perspective can help shape advocacy that’s responsive to his priorities.

Senator Leahy’s EB-5 perspective as expressed in articles posted at leahy.senate.gov

Regional center program authorization

  • Committed supporter of long-term regional center program authorization with reforms
  • 7/22/2009: For years this program has been reauthorized on a temporary basis.   Currently, it is set to expire at the end of September.  Making this program permanent is a critical first step to its continuing success.  …I also remain committed to considering changes to improve the overall program. … I hope that this hearing will initiate a dialogue about how Congress, the agency and stakeholders can work together to ensure that the goals of job creation and security can be met, and at the same time make the program as effective and efficient as we can for those who are developing projects in communities around the country.  I strongly believe this program has the potential to grow as a meaningful source of positive economic development around the United States.”
  • 9/28/2012: “I appreciate the President’s support for this bill and the support we have drawn from both sides of the aisle.  The president’s signature on this bill is one more step toward my goal of a permanent charter for the EB-5 program, along with additional measures to give U.S. Citizenship and Immigration Services (USCIS) the tools it needs to keep this program a strong, secure and vital part of our economy.”
  • 12/4/2015: “The Regional Center should be reauthorized, but only if reformed.  There is now bipartisan consensus around these reforms, and we cannot squander this opportunity.”
  • 12/08/2016: “I believe we can still fix EB-5. But I cannot support simply extending it, yet again. While I do not come to this decision lightly, I cannot support a continuing resolution that leaves these flaws in place. The time has come to reform EB-5, or to end it.”
  • 01/12/2017: “I remain committed to protecting investors and rooting out the rampant fraud within the program.  If we cannot take these critical steps, I believe the time has come for the program to end.”
  • 9/25/2019: “We are hopeful that Congress will finally take decisive action to address the fraud and other vulnerabilities that have come to define this program.”
  • 6/25/2021: “Now that our bill has been blocked, the EB-5 visa program is unfortunately going to lapse in the days ahead and have untold economic consequences throughout the communities that rely on the program for development projects.  I remain committed to reforming the EB-5 program should there be another opportunity to do so.”

Integrity Measures

  • Promote accountability and transparency
  • Prevent fraud and address national security vulnerabilities
  • “Improve accountability of applicants, project managers and the projects themselves”
  • “I remain committed to doing more to protect investors and to root out fraud within the program, such as increasing fraud investigations and requiring additional oversight of investor funds.”
  • “Our proposal would require background checks and third party oversight of funds.  It would create protections for defrauded investors. It would ban foreign government ownership of an EB-5 company.”
  • “Congressional action is required to rectify documented fraud and national security vulnerabilities within the EB-5 Regional Center Program. The bipartisan EB-5 Reform and Integrity Act of 2021 establishes new disclosure requirements for EB-5 regional centers in order to protect investors and certify regional center compliance with program rules. It also requires the Department of Homeland Security to perform regular audits of and site visits to regional centers.”
  • “I will not support mere window dressing.  Proposals that do not require transparency and accountability for every EB-5 project are just that.”

TEA Incentives

  • Protect “central purpose of promoting investment in rural and economically challenged regions” by “reining in abusive gerrymandering”
  • The incentives that Congress created to promote investment and create jobs in rural and high unemployment areas—the sole reason why I championed this program—have been rendered obsolete through economic gerrymandering.
  • “The fact that a luxury hotel in Beverly Hills can use gerrymandering to claim it is located in a distressed community is troubling.  But the fact that this type of abuse now represents almost 90 percent of the entire EB-5 program is appalling.  And an untold number of these luxury developments would be pursued regardless of EB-5 financing, casting doubt on whether the program is creating any jobs at all.”

Investment amounts

  • Modernize EB-5 by providing “a much-needed increase” to “inadequate investment levels.”

Visa Relief

  • (The website posts do not discuss this topic. Leahy’s co-sponsored bills have included age-out protection and concurrent filing. He has spoken warmly about the general goal of protecting investors, but not discussed EB-5 visa relief.)

Industry Prejudices

  • “Small but powerful corporate interests must not be allowed to derail improvements that can help our most distressed communities. They must not be given credit for window-dressing reform proposals that do little to change the status quo.” (2/2/2016)
  • “Gluttonous, shortsighted corporate greed blocked these critical reforms.  Greed that was given a voice by the U.S. Chamber of Commerce.  Republican leadership has allowed a couple of powerful developers who exploit this program’s flaws to derail critical reforms.  I find it shameful: the worst abusers of this program have been given veto power over its reform.” (12/08/2016)
  • “It’s really unfortunate that a bipartisan bill supported by the overwhelming majority of EB-5 stakeholders was blocked at the behest of a small minority that blindly opposes much-needed accountability and transparency in the program.” (6/25/2021)

This history can be a resource for people speaking with Senator Leahy today. Assuming industry can’t all to agree to just ask Leahy to attach Leahy’s own proposed EB-5 reform bill to FY2022 appropriations (of if only!), let’s at least carefully frame the alternative proposed EB-5 legislation in Leahy’s terms. Show him how any alternate TEA provisions and integrity measures still check his priorities for distressed and rural areas, accountability, and transparency. Identify and preemptively concede any proposed language that projects the opposite message. Discuss the integrity measures that likely mean much to Leahy in light of the Vermont RC case: fund administration, investor reporting, and regional center audits (previously not included in the industry bill). In choosing the advocacy approach, be cautious to navigate Leahy’s unfortunate image of parts of the industry. Speak to his goals, commitments, and existing knowledge. I trust that negotiators are being smart and strategic, and thinking in terms of audience. We can maximize the FY2022 appropriations chance by presenting language that makes Appropriations Chair Leahy able to respond “yes, this is something I want to help advance because it addresses my priorities and will help to protect my legacy in EB-5 and my reputation in Vermont.”

Minimizing FY2022 Visa Loss

Today’s “Chat with Charlie” on the November 2021 Visa Bulletin included a slide with another reminder of the cost of delay in regional center program authorization.

As the chart shows, the E5 (EB-5) category has a record 19,880 visas available this year (even higher than the 18,602 previously anticipated), and so far only about 368 applicants eligible to claim them. Those 368 applicants represent the inventory of direct EB-5 (C5 and T5) applicants at the visa stage as of September 2021, except for China-born applicants with priority dates more recent than November 22, 2015 (the China final action date in the October 2021 visa bulletin).  

So close to visa relief, yet so far! FY2022 offers massive extra supply (thanks to roll-over from unused family-based numbers last year) but we’re held back from using it.

Hypothetically, if the regional center program had stayed authorized and USCIS and DOS worked efficiently enough to issue the almost 20,000 EB-5 visas available, then the EB-5 backlog at the visa stage could have been reduced by about 40% this year alone. (As of November 2020, DOS reported 50,936 total EB-5 applicants registered at the National Visa Center.)

The story is particularly sad for applicants from China, who could have theoretically gotten up to 15,000 leftover EB-5 visas this year (about 20,000 quota total minus about 5,000 visas required to satisfy rest-of-world demand at the National Visa Center). The loss is only theoretical (the backlogged Guangzhou consulate probably lacks capacity to schedule that many EB-5 interviews in a year even without the regional center issue), but still painful.

What needs to happen to minimize EB-5 visa loss this year?

One. The industry needs to make all possible concessions to get the regional center program reauthorized as soon as possible, so that RC visas can be issued again as soon as possible. Assuming that getting attached to the FY2022 Appropriations requires agreeing to reforms and conditions demanded by Senate Appropriations Committee Chair Leahy, then please agree. Regional center applicants represent over 90% of the EB-5 backlog, and lack legal basis to get visas until the law changes to provide reauthorization and/or grandfathering. Negotiators will not be thanked if they hold out too hard for the “bird in the bush” of visa relief in legislation, at a cost of losing the “bird in the hand” of tens of thousands of EB-5 visas available in 2021 and 2022 on a “use it or lose it” basis.

Two. USCIS needs to speed up processing of direct EB-5 I-526, so that at least direct EB-5 applicants can maximize visa use this year. DOS reports only 368 eligible direct EB-5 applicants at the visa stage as of September 2021. Meanwhile, there are probably at least 1,000 direct EB-5 investors with I-526 pending at USCIS (considering the total pending inventory of about 13,000). At previous productivity levels, USCIS could have already finished adjudicating 1,000 direct I-526 and sent them off with their families to the visa stage since June 30, thus adding another 3,000 or so applicants eligible for direct EB-5 visas. Instead, here’s what’s happened with I-526 adjudications since June 30, 2021 according to my leaker friend: July, 45 I-526 approved; August, 15 I-526 approved; September, 15 I-526 approved; October to date, 7 I-526 approved. This inexcusably low productivity needs urgent management intervention.

Three. The small number of EB-5 applicants eligible for visas in FY2022 could also increase if Department of State decided to move China Visa Bulletin dates just for direct EB-5. If DOS made China direct EB-5 (C5 and T5) “current” in the Visa Bulletin, that would make around 4,000 more Chinese direct EB-5 applicants eligible for visas even while the RC program is lapsed. That could effectively lower EB-5 visas loss in FY2022 by about 4,000 visas. In previous visa bulletin chats, however, Charles Oppenheim gave no indication that he would consider such a move. There’s a strong principle to keep the visa queue in order and avoid date progression that has to be corrected later with date retrogression. Moving China visa bulletin dates just for direct EB-5 would implicitly give up on regional center authorization happening any time soon, and displace regional center applicants from China. I guess DOS would not be eager to make that call. This puts us back to option one: do whatever it takes to get the regional center program reauthorized as soon as possible.

As a side note, see minute 36 of the Chat with Charlie linked above for a brief comment in response to my question about why, despite “current” Chart B for I5 and R5, NVC has been emailing regional center applicants that it “will not act on any new or pending EB-5 visa petitions as described above until further notice. Please do not submit any additional fees or forms to NVC.”)

Finally, warm appreciation due to Charles Oppenheim, Chief of the Immigrant Visa Control Office at Department of State. He is now retiring after 43 years, and I hope the government remembers and learns from his wonderful example. We need more civil servants like Charlie who are true experts plus committed to communication and process improvements. He spent decades doing everything he could as an individual toward the Herculean task of making U.S. immigration as fair, functional, and understandable as possible. Thank you Charlie for your generosity, integrity, and hard work! What will we do without you?

No news yet on RC program authorization

We remain, so far as I can see, in the position described in my previous posts about reauthorization efforts.

As previously discussed, we are waiting for a legislative vehicle to arrive, and for Congress to be willing to load an EB-5 bill onto that vehicle. Industry advocates are striving behind the scenes to make these conditions come true as soon as possible.

Industry hopes for a vehicle are currently focused on the FY2022 appropriations act, which is due by December 3, 2021, unless delayed again. (Delay looks likely, considering the number of contentious issues before Congress.) See Aaron Grau’s article A Lesson in Legislation for helpful background and definitions, and my September Updates post for examples of how omnibus timing has worked in recent years.

Industry hopes for an EB-5 bill are now focused on a consensus bill that has reportedly been agreed-to by EB-5 advocates, and presented to key members of Congress (who may also make changes). EB5IC has talked about this for awhile, and IIUSA acknowledged a consensus effort on October 1 (a significant development). The text of this consensus bill remains a tightly-held secret, possibly because it is agreed-upon and uncontroversial. The drafts I’ve seen show a revised version of S.2778 from last Congress. The bill is a holistic alternative to Senator Grassley and Leahy’s reform-focused EB-5 bill (S.831/HR 2901).

Considering the lack of fallback for reauthorization, I can only hope the best for the industry consensus EB-5 bill, whatever its quality, wisdom, and chances in Congress. This is what industry decided to ask Congress to pass as part of FY2022 appropriations, or the soonest available vehicle. It is the candidate.

The content of FY2022 appropriations is still being debated. So far, no EB-5 language was included in the Democrats’ preliminary draft FY2022 Appropriations bill text, which was released on October 18 by Senator Leahy as Chairman of the Senate Appropriations Committee. (Full text available here, the Republican reaction here. If there were a clean RC program extension, it would be together with the other immigration extensions on p. 62 of the Homeland Security bill. But a simple extension is not in the draft bill, and is not expected. All sides expect reauthorization conditional on program reforms, after Congress chose to break the cycle of clean RC extensions in December 2020.) It’s early days yet, and much negotiation remains before appropriations bill content gets finalized. Who knows, maybe Senator Leahy will decide that he likes and wishes to advance the industry alternative competitor to his EB-5 reform bill. Maybe other influences will prove stronger. We the public may not know until the last minute before passage whether EB-5 legislation of some kind (the industry’s hoped-for bill, or minimum investor protections) can finally get a seat on the appropriations vehicle. or another near-term vehicle. And we may not know until December whether “the last minute” for appropriations is indeed December 3, or a later date. (From what I’m hearing so far, a later date is likely.)

Considering the nature of the process, I do not expect to have anything very significant and unambiguous to report on EB-5 legislation before late November at earliest. It will probably be later, considering that the contentious appropriations process looks likely to extend beyond the immediate December 3 deadline. My next EB-5 articles, as time permits, will be on USCIS processing updates, visa availability, and due diligence. In the meantime, I am busy with my regular work of writing business plans.

While I do not expect much public information in the next month, I do expect intensive activity behind the scenes that advocacy group members may still have a chance to influence. If your life depends on this, join an advocacy organization to keep informed and involved. (Even better, join more than one group, to reduce vulnerability to messaging. And hold on to personal sense and knowledge, as defense against doublethink. One hears quite a bit of “2+2=5.”)

As a reminder, IIUSA posts updates on its blog, EB5IC reps post videos here, and AIIA has a blog here and holds regular donor update calls (with one upcoming this week Friday).

I have reopened comments, to facilitate input from readers. (As before, a reader’s first comment on this blog gets held for manual approval, while subsequent comments post automatically.) Let’s focus on what could be helpful, and language we would use face-to-face. Twitter can have the snap reactions, while advocacy groups are the best place to organize efforts and channel emotion toward constructive outcomes. Ideally, this small corner here can stay safe for thoughtful discussion and info-sharing, as it has been for many years.

USCIS Website Alert 10/4 Update

The EB-5 page at USCIS.gov has updated its alert regarding policy for processing during the regional center program sunset. I’ve copied below a redline that compares the Alert published on October 4, 2021 with the the Alert previously published on July 1, 2021. The major difference is that USCIS now gives a deadline for re-evaluating its “hold” policy (end of calendar year 2021), and states that Form I-765 and I-131 continue to be accepted and adjudicated for “these” (undefined) pending Forms I-485. The Alert does not say that USCIS will start denying petitions on January 1 if the RC program is not reauthorized by that time, but does warn that they’ll reevaluate at that point. Congress seems to need cliff-hanger deadlines to make them act, and USCIS is now offering one.

I haven’t enabled comments for this post, because I’ve noticed my blog discussion tending in an unconstructive direction. In lieu of commenting on this post, I encourage contacting legal advisors with any questions about the policy, and contacting advocacy groups to support efforts to expedite reauthorization and protect in-process regional center applicants and their investments.

— * —

USCIS Website Alert as of July 1October 4, 2021

Alert: Statutory authorization related tofor the EB-5 Immigrant Investor Regional Center Program expiredended at midnight on June 30, 2021. This lapsesunset in authorization does not affect EB-5 petitions filed by investors who are not seeking a visa under the Regional Center Program. Due to the lapsesunset in authorization related tofor the Regional Center Program, USCISwe will reject the following forms received on or after July 1, 2021:

  • Form I-924, Application for Regional Center Designation Under the Immigrant Investor Program, except when the application type indicates that it is an amendment to the regional center’s name, organizational structure, ownership, or administration; and
  • Form I-526, Immigrant Petition by Alien Investor, when it indicates that the petitioner’s investment is associated with an approved regional center.; and
  • In generalForm I-485, Application to Register Permanent Residence or Adjust Status, and any Form I-765, Application for Employment Authorization, and Form I-131, Application for Travel Document, associated with a Form I-485 application that is based on a Form I-526 filed by an approved regional center.

Until further notice, we will hold (that is, not act on) any pending petition or application of these form types that is dependent on the lapsed statutory authority until further notice.and was filed before the end of the statutory authorization. At the end of calendar year 2021, unless there is new legislation for regional centers, we will reevaluate whether to keep this hold in place. If we wrote to you were issued written correspondence regardingabout your petition or application on or before June 30, 2021, you should review theour written correspondence and respond by the due date (as applicable). Although USCIS is unable to we cannot review your response at this timeright now, we will receive and maintain thekeep your response for review if circumstances change.

We will continue tostill accept and review Form I-829, Petition by Entrepreneur to Remove Conditions on Permanent Resident Status, in the normal course,Form I-829, Petition by Investor to Remove Conditions on Permanent Resident Status, including those filed on or after July 1, 2021.

We will begin rejecting all Forms I-485, Application to Register Permanent Residence or Adjust Status, and any associated Forms I-765, Application for Employment Authorization, and Forms I-131, Application for Travel Document, based on an approved Regional Center Form I-526.

In addition, we will keep on hold (that is, not act on) any Form I-485 that is based on a Form I-526 for an approved regional center; the Form I-526* must have been filed before the end of the statutory authorization. At the end of calendar year 2021, unless there is new legislation for regional centers, we will reevaluate the hold. We will accept and adjudicate Forms I-765 and I-131 relating to these pending Forms I-485.

We will provide further guidance to the public if circumstances change or further guidance becomes necessary.

*Suzanne’s note: I guess this is a typo, and USCIS meant to say “Form I-485.” Otherwise, it’s puzzling.

Data insights for the future of EB-5

Visa availability is a key issue shaping discussion around EB-5 legislation and future potential.  I have prepared a series of charts with data to help inform the discussion.

First, let’s look at who uses EB-5 visas. EB-5 gets just 7.1% of total employment-based visas, or about 10,000 visas per year. Lawmakers may assume that by making about 10,000 EB-5 visas available, they have incentivized about 10,000 EB-5 investments annually. That’s not the case.  In FY2019, minor children received 41% of EB-5 visas issued, while just 36% of the quota went to EB-5 investor principals. In previous years, spouses and children received an even larger percentage of EB-5 visas. So long as the EB-5 quota must be shared between principals and their families, it can sustainably incentivize fewer than 4,000 investments annually. More investors do not fit within visa availability.

Clarifying that the @10,000 EB-5 visa quota applies to principal applicants would increase EB-5’s potential sustainable economic benefit by almost 300%. It could also reduce the EB-5 backlog by about 64%. I do not know if Congress would do this for EB-5. But certainly, an adjustment to visa allocation would be immensely and broadly beneficial — not least to the economy and job creation.

In the excitement of welcoming EB-5 investment following the economic crisis of 2008, many investors and issuers did not notice the hard limit on sustainable investor numbers created by the EB-5 quota. EB-5 investment – as reflected in I-526 filings – exceeded the sustainable level every year since 2011.

In the glory days of 2014-2017, EB-5 investment was at least three times more popular than it could afford to be under an annual visa quota of about 10,000, with only about 36% going to investors. That popularity was wonderful for the U.S. economy, which got tens of billions of dollars in investment and hundreds of thousands of jobs, but it was not good for immigration. Thanks to the mismatch between EB-5 demand potential and available EB-5 visas since 2011, EB-5 has ended up with a backlog of over 80,000 applicants still awaiting the visa incentive for their economic contributions.

I hear hopes that legislative reform could restore the EB-5 market to what it was a few years ago, such that regional centers could do business at previous levels. Look at the numbers, and think what will need to change to make that possible. EB-5 raised almost $8 billion dollars in 2015 alone, from enough investors to claim at least five years of EB-5 visas. If Congress and issuers want another $8 billion dollars a year from EB-5, they can (1) free up visas for the investors who contributed the first billions (an estimated 80K-100K visas are needed to clear the EB-5 backlog), and also (2) increase the EB-5 visa quota so that it can sustainably accommodate up to 16,000 investors a year (i.e. make the limit 3x to 4x higher than it has been). Or (3) recapture the past blissful ignorance of visa limits and backlog risk.  At least two of those conditions must be met for EB-5 to possibly raise again the kind of investment that it did a few years ago. Otherwise, future expectations must be moderated. As it happens, expectations have generally been moderate for most of the EB-5 ecosystem. In 2016, DHS estimated that the average regional center project had 15 EB-5 investors, while large projects in 2016 were associated with just a few regional centers.

I highlighted per-country I-526 receipt numbers (in the years for which I have per-country data), because per-country limits also affect EB-5 visa allocation and market potential.

Under current law, EB-5 visas get allocated first to the earliest I-526 filing priority dates from each country, up to a country cap limit of about 700 visas per country. Then any leftover visas are available to the oldest priority dates regardless of origin. Country caps plus sharing visas with family means a sustainable level of just 300-400 investments per year from investors born in any one country. EB-5 demand from China vastly exceeded the per-country level several years ago (by 52x in 2015), then fell to almost nothing. EB-5 demand from China was relatively early, thus now at the head of the line for any visas leftover after organically low EB-5 demand from other countries. Here’s how per-country EB-5 visa allocation has happened so far, in practice.

Backlogged Chinese applicants – the oldest applicants and thus at the head of the line for any leftover visas — have gotten as many as over 8,000 EB-5 visas per year (back in FY2015 when EB-5 interest had not diversified), and at least over 4,300 visas per year (in FY2018 and FY2019, even after a demand increase from the rest of the world). Growing demand from Vietnam and India reached the visa stage by 2018/2019 (but not able to get visas beyond the country limit of around 700, since not near the front of the leftover visa line). All other countries combined have absorbed at most about 3,700 EB-5 visas per year so far.

The charts above have important messages for EB-5 issuers thinking about the future, and for past Chinese investors. Both should focus on the blue segment in each column – the numbers representing EB-5 visa demand from all countries below per-country limits. This number reflects market potential for EB-5 outside of backlogged countries, and is also the variable factor determining visa supply for China.

People trying to calculate future market potential may be concerned to see the “Other Countries” row hitting a plateau in I-526 filings and visa numbers since 2017, even in absence of any visa constraint. At the height of EB-5 program popularity and with the $500,000 investment level, the whole world outside China, India, and Vietnam has yielded fewer than 2,000 investors per year, and used fewer than 4,000 annual visas. Going forward, EB-5 issuers hardly want to all compete for only one to two thousand investors a year spread across miscellaneous countries — and that’s a best case assuming affordable investment levels. Issuers may be concerned to see Vietnam and India visa availability already used up for the next 7-8 years, according to Department of State estimates, and over 4,000 visas getting “leftover” every year to old applicants instead of leveraged to incentivize new investment. Thus the idea of setting aside 3,000 visas in categories reserved for new TEA applicants. With set-asides, total EB-5 market potential going forward could be not only <2,000 investors from non-backlogged countries with organically low EB-5 demand, but also another 1,000 or so investors (36% of set-aside visas) from the high-demand countries otherwise discouraged by backlog wait lines.

While the history of relatively low “Other Countries” demand is a concern for program potential, it’s an encouragement for backlogged Chinese applicants. The China visa wait time equation is China demand/leftover supply, so backlogged applicants welcome reductions to the new demand that reduces leftover supply. Wait time expectations for the China backlog will continue to improve if EB-5 demand continues to fall, as it has done since 2018/2019. China estimates will only get worse if EB-5 gets more popular than it’s ever been before in small countries. Or, if new EB-5 usage expands thanks to “TEA set-asides” providing an exclusive path around backlogs for high-demand countries. Consider the example of a past China-born investor who’s #50,000 in the queue for leftover visas. His wait time outlook changes by orders of magnitude depending on whether the 50,000-long queue before him is likely to advance at a rate of over 6,000 average annual visas available to China (the long-term average I predict, considering falling demand), or 50,000/4,000 (if rest-of-world demand stabilizes back at 2017/2018 levels), or 50,000/1,000 (if TEA set-asides divert 3,000 out of the 4,000 or so annual visas otherwise leftover to the backlog).

In light of these calculations, consider the cost/benefit of increasing total EB-5 market potential by about 1,000 investments a year via 3,000 set-aside visas for new TEA investors. Would that TEA incentive be worth the trade-off a 2x to 5x increase to backlogged Chinese investor wait time expectations?  Especially when the market and incentive potential depends on finding welcome in the home of the painful backlog?  And what if backlog relief (queue elimination) were proposed together with TEA set-asides (queue-jumping)? Such a combo proposal must logically presuppose that either the backlog relief provisions will fail, or the TEA incentive will be null. There’s no attraction to bypassing a painless queue.

I’ll close with a chart summarizing the current state of the EB-5 backlog (with and without derivatives), and with a slide that I made earlier this year for an AILA conference. The backlog chart reiterates how much good would result if Congress clarified that the @10,000 EB-5 visa quota applies specifically to EB-5 investors (principal applicants). The slide reflects an insight that came to me as I struggled to think through realistic EB-5 wait time predictions. “If EB-5 visa wait times are untenable, then something must give to reduce them. If not supply relief, will be demand failure.” If only legislative change can put us on the path of positive relief, and a sustainable and productive future. If that’s not possible today, let’s at least do what it takes to get reauthorization and protection for past regional center investment as soon as possible, to protect the possibility for future relief,

(For links to data sources referenced in this article, see my Timing Data Room page. For those who prefer to interact with charts in Excel, here you go. If the effort and resources that I put into these articles is worth something to you, please consider my PayPal contribution link.)

I-829 alert for investors from the ’90s

In another nice indication that the Investor Program Office is trying to get EB-5 processing back in order, it has updated the EB-5 page at USCIS.gov with a new “Alert” — this one targeted to people with pending I-829 petitions that were filed before November 2, 2002, and based on I-526 approved 1995 to 1998. Apparently USCIS wants to finish processing a batch of I-829 has been held in abeyance for 20 years, and is calling for contact info so that they can schedule biometrics appointments. (There’s a story behind the long delay that’s not IPO’s fault — I described it at the end of a 2020 post, and now in a comment to this post.) Other EB-5 “Alert” language on the USCIS website remains unchanged, suggesting no near-term change to the applied regulations or to the processing freeze for regional center I-526 and I-485. USCIS is excellent at holding petitions in abeyance.

As a reminder, I-829 processing continues for regional center as well as direct EB-5 cases, even during the regional center program lapse. (“We will continue to accept and review Form I-829, Petition by Entrepreneur to Remove Conditions on Permanent Resident Status, in the normal course, including those filed on or after July 1, 2021.”) Current regional center program authorization is necessary to get a regional center visa, but not a condition to keep and remove conditions on that visa. Loss of regional center sponsorship does not in itself change I-829 eligibility. This Q&A from a November 2020 stakeholder engagement discusses the “what if” of individual regional center termination, and could also apply to the unlikely (we trust) event of regional center program termination.

(12) Q: Would a Form I-829 case adjudication be affected by the termination of its sponsoring regional center, if all other requirements have been met, such as job creation, etc.?

A: It depends on the facts of the case. An immigrant investor’s conditional permanent resident status, if already obtained, is not automatically terminated if the investor has invested in a new commercial enterprise associated with a regional center that USCIS terminates. The investor will continue to have the opportunity to demonstrate compliance with EB-5 program requirements, including through reliance on indirect job creation. However, there are times when the reason a regional center has failed to promote economic growth and USCIS has terminated its designation which may have a bearing on the I-829 adjudication. For example, depending on the facts of a particular case, if a regional center was terminated and there was evidence of misappropriation, such evidence could undermine the petitioner’s ability to make the showings required under 8 CFR 216.6. In such a scenario, it is not the termination of the sponsoring regional center that is affecting the I-829 adjudication but rather an evaluation of the applicable eligibility requirements.

September Updates (USCIS input, RFEs, legislation)

A few updates and resources.

USCIS Feedback: This week was the deadline for response to the nice USCIS “EB-5 Question” feedback request. I sent comments, and assisted with the list of questions on behalf of EB-5 investors submitted by AIIA.  

RFE Policy: USCIS today announced another extension to “Flexibility for Responding to Agency Requests.” For notices sent through January 15, 2022, USCIS will consider a response to RFE, NOID, and other notices received within 60 calendar days after the response due date.

IIUSA Forum: IIUSA has announced the schedule and speakers for its Virtual EB-5 Industry Forum November 2-11. Early bird tickets are available until October 1. All prospective and current EB-5 investors and international stakeholders are invited to participate for free, which is a great opportunity. I was just sorry to not see Charles Oppenheim on the schedule for his annual EB-5 update.

Chats with Charlie: Speaking of Charles Oppenheim, he continues to do excellent live chats monthly on the Travel.gov Youtube channel. The October Visa Bulletin chat last week did not directly address any EB-5 questions, but I’ll quote one important point: “Only a certain amount of water can go through a straw regardless of how much water you try to pour down it.” He was talking about the record-breaking number of EB visa numbers to be available in FY2022, and how Consulate and USCIS capacity will naturally constrain how many of those numbers can be issued. EB-5 visa availability for FY2022 is a wonderful 262,288*0.071=18,622, according to the September Visa Bulletin. If only those visas could be issued and reduce backlogs, rather than lost due to legislative delay and limited processing capacity.

Legislation: Two things happened this week that affect timing prospects for EB-5 legislation and reauthorization.

The House passed a Continuing Resolution that defers the deadline for the annual appropriations bill from September 30, 2021 to December 3, 2021. The appropriations bill is one hope as a vehicle for EB-5 legislation, and that particular hope is now deferred to December. (Assuming that the House CR passes, as there’s still some dispute over it, but we’ll know on Monday when the Senate takes it up.) The House and Senate appropriations websites discuss the detail and link to text. The House CR text does not mention EB-5, and does not cover EB-5 by default (as happened in the past) since RC authorization is not coupled with FY2021 appropriations. I do not blame industry for missing a CR opportunity for EB-5 legislation, because Continuing Resolutions are not generally opportunities for special interest items. CRs for the past five years at least have been budget-focused with just a few extra provisions for general-interest high-profile emergencies – as happened again this year. I expect to see the final appropriations bill (which is a large vehicle) a few days before December 3, or else to see another CR in December to defer the deadline into early Spring. (It’s also possible that Congress could finalize an appropriations bill well ahead of deadline — they just haven’t in the five years that I’ve watched the process so far.) Whether Congress will agree to attach something EB-5-related to the appropriations bill or another vehicle remains to be seen, and presumably continues to depend on what’s asked and who’s asking.

Meanwhile, the Democrats’ separate attempt to attach immigration legislation to budget reconciliation had a setback, thanks to block by the Senate parliamentarian. The specific “Build Back Better” immigration legislation content was not very helpful for EB-5 (limited to benefit options for adjustment of status plus a visa recapture that couldn’t help much in practice thanks to that capacity straw Oppenheim talks about, and EB-5’s use-it-or-lose-it position for roll-over numbers), but the immigration effort was extremely significant. If passed, it could have cleared the path for EB-5 needs to be addressed. While Democratic leaders are still waiting to resolve the immigration issues that are on-brand and top priority for them and the Biden Administration (DACA, TPS, visa relief for immigrants working in the U.S.), there’s limited chance that they’ll put their weight behind immigration benefits that are not on their talking point list of priorities, including for immigrant investors patiently waiting outside the U.S. We need non-EB-5 immigration relief priorities to be addressed ASAP, because any deferral naturally further defers the chance for political capital spent specifically on EB-5. (For Administration priorities, see the White House blueprint for immigration, and my blog discussing visa relief proposed by the White House-backed U.S. Citizenship Act. The text of the immigration proposal advanced and stalled this month is available on the House Judiciary Committee website under Chairman Nadler Announces Committee Print for Full Committee Markup of Build Back Better Act. Roll Call’s 9/19 article Senate parliamentarian rejects Democrats’ immigration bid provides analysis, including quotes from the cast of Senators on whom we rely for EB-5 legislation. An MSN article from July Republican immigration proposal falls flat gives further background.)

Regional center program authorization and reform legislation should still theoretically have a near-term chance despite the immigration reform setbacks, because EB-5 legislation does not have to be an immigration bill in awkward precedence over stymied immigration priorities. EB-5 legislation can alternatively be an economic development and enforcement issue. But it depends on us, and what we ask for in legislation. We know that EB-5 investors need relief just as much as Dreamers and immigrant workers do, so it’s hard not to ask. If only the Administration’s immigration priority issues can be resolved as soon as possible, so that lawmakers can celebrate that win and move on to consider our benefit. Unless and until that happens, consider how much Congressional leaders can afford to give EB-5 and speak with the media about afterwards, beyond an enforcement-focused reauthorization such as Grassley/Leahy proposed.

Meanwhile, there’s apparently still time to think through EB-5 legislation. I’ve heard rumors and counter-rumors about possibly-finalized bills, was briefly hopeful, and then became the target of some personalized propaganda that gutted and mortified me. But I still have hope, because the EB-5 ecosystem includes good and smart people. Now is the time for all good men to come to the aid of their party, apply intelligent scrutiny and honorable pressure, and dilute the forces of myopia and cupidity. I’m particularly looking to regional centers to exert positive influence. The future depends on it.

We’re all in this together

This blog focuses on the technicalities of EB-5 for my small audience of industry insiders. Since I do not have a general audience, I do not think very much about messaging. But I realize that in focusing on details, I can tend to focus on the negative.  Particularly with respect to legislation and the regional center reauthorization debate, it’s easy for analysis to get stuck in distinctions and divisions and lose focus on the big picture of what we’re all trying to accomplish and why.

This post takes a step toward rectifying that balance, by stepping back to also look at the big picture of what unites our efforts as we try to make EB-5 work.

Regional Centers and EB-5 investors are in this together

In thinking about specific legislation, it’s easy to focus on details where regional center and EB-5 investor interests may be at odds. Both the Grassley/Leahy bills and the holistic faction bills have historically included a few divisive provisions that attracted just criticism. But, do not conclude from this that regional centers and EB-5 investors are on opposing sides when it comes to EB-5 advocacy.

In fact, the interests of regional centers and EB-5 investors are very closely intertwined, and they depend on legislation that maximizes each other’s chance for success.

EB-5 investors need legislation that keeps the EB-5 program viable for regional centers, because regional centers need to stay in business long enough for investors to complete the immigration process under regional center sponsorship. If regional centers lose authorization, are overburdened with costly regulation, and practically cannot continue to do business, that’s not good for them, and equally not good for investors whose immigration process and capital repayment practically depend on the regional centers staying business.

Regional centers need legislation that keeps the EB-5 program viable for their investors, because that’s the only path forward for investments. It’s not like regional centers have the option, in most cases, to simply return investor funds in case of disappointment. If the regional center honestly did its job and followed all the EB-5 rules, then investor funds are not sitting in a bank account, but rather deployed out in the economy funding job-creating projects. If the U.S. government bails on the EB-5 visa promise to investors, what can regional centers do? No regional center wants to find itself with investors trying to give up and withdraw en masse, especially considering practical limitations. Regional centers do not want to face lawsuits from investors who don’t have anyone else to sue, even if the regional center cannot practically force Congress to honor the visa promise or force investments to exit earlier than allowed by market conditions and investment agreements. For the sake of their own survival, regional centers have incentive to push legislation that helps their investors keep the immigration hope that underwrote the EB-5 investment.

These intertwined interests mean that all sides have valid reasons to be for and against aspects of the Grassley/Leahy bills, and for and against aspects of the holistic reform bills. The divisions among industry groups and compromises over legislation are not as clearcut as I might have implied in previous posts, when I focused on details and tried to set everything out in table form.  Certainly, there cannot be a conspiracy of regional centers against investors or vice versa, considering how interdependent investor and regional center interests really are in practice. “United we stand, divided we fall” is the simple truth when it comes to EB-5 investor and industry interests in reauthorization legislation. Any final legislation will be a compromise with some wins and losses, considering what’s practically possible and allowable by Congress. But I hope that every industry group is working hard to achieve compromise that will balance its own interests with the interests of groups on which it also depends. As an industry, we are truly in this together, and if any negotiators aren’t acting that way already, they must change.

Investors from around the world are in this together

There’s a historical fissure between EB-5 investors from China and other countries over advocacy around the Fairness for High-Skilled Immigrants Act, which naturally divided immigrants from different countries and categories into those who benefit from and those who are hurt by the country cap law. But when it comes to reauthorization legislation, or at least grandfathering for existing EB-5 investors, people from all over the world have every reason unite to preserve the regional center immigration opportunity. The country cap discussion is valid and on-going, but it is separate from and need not derail cooperation to support reauthorization or at least grandfathering. And for the future, investors from other backlogged countries will shortly realize why they need to join the long-standing Chinese effort to push for visa relief.

The country, Congress, and the industry are in this together

Most important, I should re-emphasize the big picture that good EB-5 legislation is not just a win/win for regional centers and investors if it passes and a lose/lose if it fails, but a wonderful benefit to gain and a tragic loss to avoid for the U.S. economy, and for everyone in Congress who has additional jobs and economic activity and tax dollars in their districts thanks to EB-5 investors and investment. It can feel like Congress is against us and has to be begged and wangled, but if so that reflects Congressional ignorance more than fundamentally opposing interests.

Who gains from a program that has injected billions of dollars into the U.S. economy and created tens of thousands of jobs, with no tax-payer cost and indeed positive tax benefit thanks to attracting productive new tax-payers? Everyone. Who loses, if the U.S. government is seen to default on the promise that it used to attract that investment? Everyone. Who loses, if the rug is pulled out from under billions of dollars invested in on-going projects just as the economy is struggling? Everyone. Who should want a continued incentive for foreign investors to bring their entrepreneurial spirit and investment dollars to the U.S.? Everyone.

The real if not the perceived interests of Congress and the country as a whole are on the side of reauthorizing the regional center economic development program. We can rightly worry that Congress is not well-informed about those interests (and thank IIUSA, EB5IC, AAED, AIIA, and anyone else who is working hard now to inform their representatives about what EB-5 involves), but the interest certainly and demonstrably exists. We can call for reauthorization with a pride and confidence rooted in the fact that a healthy EB-5 program truly is a wonderful economic benefit for the country, and to the government that represents us.

The fight for EB-5 legislation continues

What is the path, timeline, and content for regional center program reauthorization legislation? This urgent question should be directed toward advocacy groups and official advisors, not to a business plan writer and spare-time blogger. But, a few notes and resources for reference, as we find ourselves in the drama-filled month of September.

The regional center program can be reauthorized as soon as (1) there is a vehicle to which reauthorization legislation could be attached, and (2) Congress agrees to reauthorization legislation that satisfies the EB-5 industry.

The first condition — available vehicle — potentially exists now, as Congress works on major funding and infrastructure bills. The industry’s best near-term hope for legislative vehicle for reauthorization may be the omnibus Appropriations Act, which is due to be passed by September 30 before the start of every fiscal year, and which must get passed eventually. (Here’s the recent history: FY2016 appropriations (due September 30, 2015) passed in December 2015; FY2017 appropriations was delayed until May 2017; FY2018 passed in March 2018, FY2019 passed in February 2019, FY2020 passed in December 2019, and FY2021 passed in December 2020.) The Hill speculated last week that the FY2022 appropriations act due the end of this month may also be deferred to December.

When Congress misses the September 30 deadline to fund the new year, as usual, they fill the gap with one or more Continuing Resolutions, which extend the deadline on the previous year’s appropriations act. CRs by nature are smaller and more limited than an appropriations act (fewer pages), and thus less hopeful for miscellaneous additions. It’s possible that a hefty EB-5 reform bill could be attached to a CR this month, but I’d be surprised. I assume that the larger appropriations act, whenever that passes, is the industry target for EB-5. (From 2015 to 2020, regional center program authorization was not specially mentioned in CRs, but extended by default in CRs thanks to RC authorization being attached to the previous year’s appropriations. This year, a CR deadline extension would not help in and of itself, because RC program authorization is now decoupled from the FY2021 appropriations deadline.) FYI my log of past regional center program extensions includes a list of continuing appropriations and appropriations acts for the past six years, with dates and links. Note that “610(b)” or “203(b)(5)” are search terms to locate EB-5 content in a bill. (The bare minimum language needed for reauthorization is this sentence: “Section 610(b) of the Departments of Commerce, Justice, and State, the Judiciary, and Related Agencies Appropriations Act, 1993 (8 U.S.C. 1153 note) shall be applied by substituting [future date] for ‘’September 30, 2015’.” An EB-5 reform bill will include a sentence similar to “Section 203(b)(5) of the Immigration and Nationality Act (8 U.S.C. 1153(b)(5)) is amended…”)

The timing for the second reauthorization condition – agreement by Congress to industry demands – is an open question. I already discussed my understanding of the field in my post Sizing the Reauthorization Hurdle. EB5IC and AAED are still committed to advance an alternative to the sub-optimal Grassley/Leahy EB-5 reform bill — an alternative that would not only reauthorize the RC program but add provisions to make the program more viable. This ambitious agenda has powered through blocking the Grassley/Leahy bill in June, seeing the RC program expire, and missing the Senate infrastructure bill opportunity.  How long will it take for these ambitions to finally be either accepted by Congress or moderated by industry? Lobbyists realize that patience is limited, and are reportedly working very hard to get Congress to agree to reauthorization soon, before investors, USCIS and Department of State give up on regional center petitions and applications. (As evidence that “the last minute” has already arrived, a USCIS leaker tells me that 154 EB-5 investors withdrew their I-526 petitions just in the last two weeks. Action is needed soon to stop the bleeding.)

I see three theoretical possibilities for the content of reauthorization legislation: (1) what industry groups including EB5IC and AAED want (legislation not yet made public, but reportedly based on S.2778 from last Congress); (2) what Senators Grassley and Leahy want, based on their S.831/HR.2901; or (3) a reauthorization that simply extends the RC program expiration deadline short-term in connection with the appropriations deadline, with no attached reform provisions. I discussed these options in detail a couple months ago in my post EB-5 legislation and the question of options (Grassley’s S.831 vs. the “holistic” S.2778). Of these, only the first appears a practical possibility at the moment.

 #3 is what we got every year from 2015 to 2020: short-term extensions to give the industry more time to agree on EB-5 reform legislation. #3 looks less probable now, since Congressional leadership went out of their way in December 2020 to decouple RC program authorization from appropriations, ostensibly to force the EB-5 legislation that’s already been deferred for five years.

#2 also seems improbable, since Senators Grassley and Leahy have not demonstrated the power to overcome industry opposition to get their reform bill passed. True, Senator Leahy can claim credit as the “driving force” for all regional center program authorizations from 2003 through 2012, and IIUSA has been willing to support the continued Grassley/Leahy reauthorization effort. But EB5IC has celebrated success in blocking Grassley/Leahy EB-5 legislation since 2015 (with other industry groups including U.S. Chamber of Commerce and the Real Estate Roundtable), and industry most recently demonstrated the will and power to block the Grassley/Leahy reauthorization path in June 2021.

So we’re left to hope that Congressional decision-makers might eventually agree with what industry groups want with reauthorization. EB5IC and AAED report that legislation is drafted and ready to go behind the scenes, though the text has still not been disclosed to the public.  (“They love the darkness better than the light because____” “…because their bill text includes no poison pills for Congress and honors promises to industry stakeholders.” Maybe.) To be fair, Grassley/Leahy also tried to get their EB-5 reform bill passed last year without disclosing it until the very last minute. This is politics, apparently. EB5IC and AAED report having secured some key Congressional support for their legislation. We shall see whether the support is sufficient to get Congress to shortly attach reauthorization to a bill that will pass.

Whether the industry effort has universal industry support may be irrelevant at this point. The main issue and question is probably just Congressional support. (One thing I don’t know: whether industry forces that have kept entire public silence this time but influential in past legislative efforts (e.g. U.S. Chamber of Commerce, Related Companies, and U.S. Immigration Fund) may exercise veto power behind the scenes. Since IIUSA’s bottom line goal is reauthorization one way or another, I think it would and could not stand in the way of any bill moving forward. But not sure about the others.) In taking control of the ball for EB-5 legislation and running with it, EB5IC and AAED are now positioned to be showered in gratitude or criticism, depending on how their play turns out.  

Note that public-facing messages from EB5IC and AAED can be found on the Pathways EB5 Vimeo site and the AAED wechat. (If anywhere else, please let me know and I’ll publish.)

Separate from the regional center program authorization issue, the EB-5 category could be affected as part of other immigration proposals being discussed now. See “Democrats make immigration case to Senate parliamentarian” (September 10, 2021) in Roll Call and “Chairman Nadler Announces Committee Print for Full Committee Markup of Build Back Better Act” (September 10, 2021) at house.gov (including link to the proposed immigration provisions). This particular immigration proposal promises limited EB-5 impact, and I’ll wait to analyze it until it makes any progress. But something like this is probably the best hope for EB-5 visa relief. EB-5 visa relief bundled with reauthoriation legislation would just make the reauthorization controversial, by making it a stand-alone immigration issue rather than an economic development issue. EB-5 visa relief theoretically has better politics and opportunity as bundled with visa relief for other visa categories that are immigration priorities for the Administration, and supported by other powerful industries. (My post from a few months ago discusses Analyzing potential changes to EB-5 visa availability.)

Meanwhile, a reminder for those negotiating for Chinese investor interests to examine examine “parole.” The prospect of parole with work authorization appears to be a key bargaining chip within the industry for EB-5 legislation, and also wreathed in hopes that do not match the highly conditional and temporary benefits in existing immigration parole programs. See the Congressional Research Service report on “Immigration Parole,” for an overview, and program details on the USCIS page for Parole for Individuals Outside the United States.

I’d also like to repeat my hope and trust that the visa-set-aide proposal has already been excised from the S.2778 template. (Set-asides meaning 3,000 EB-5 visas per year set aside for new TEA investors, and thus deducted from the pool historically leftover from low-demand countries and issued to the oldest backlogged Chinese visa applicants). Lobbyists have publicly disclaimed queue-cutting set-asides. But just in case anyone is tempted to keep pushing set-asides despite lingering visa backlogs, I suggest reviewing Shakespeare’s Richard III, Act 4 Scene 4 (start at line 210). See how Richard approaches his sister-in-law Queen Elizabeth, whose sons he has slain, to woo her daughter as his wife. Richard counts on Elizabeth’s ambition to make it work, and argues the past sacrifice can be covered by future benefit for her. But Elizabeth points out that her daughter “cannot choose but hate thee, having bought love with such a bloody spoil.” I like to think that Chinese migration agents would stand up like Queen Elizabeth, if asked to take a bloody spoil of set-aside visas to woo new investors. How wonderful if the China market could re-open with visas available for new investment! But that bright possibility must depend on visa relief not bought with visa pain for past Chinese investors. There must be good faith with past investors — not merely in intention (“but we did not mean set-asides to hurt, and we did mean other provisions to compensate” — a classic Richard III line), but in the real-world results of legislative changes. Ideally we could get backlog relief, which is essential to EB-5 program health and future. At minimum, let’s all keep responsible to avoid net backlog harm from any new EB-5 legislation. Long-suffering Chinese investors deserve good advocacy now, considering that they already committed billions of dollars and spurred creation of tens of thousands of jobs in the U.S. economy.

UDPATE: As this post ended on rather a low note, see also We’re all in this together.

I-829 Status Report as of August 2021

The Investor Program Office at USCIS continues to process direct and regional center I-829, even during the regional center program shutdown. However, the process and volumes need improvement. This post summarizes what I’ve been able to learn about recent I-829 processing.

Consider first official data sources: the USCIS Check Case Processing Times Page and the USCIS Immigration and Citizenship Data page.

A few points evident in this official data:

  • In 2017, IPO showed what they can do with I-829 adjudications, if they try. Their efforts topped out at about 450 decisions per month in Summer 2017.
  • I-829 productivity plummeted into 2018/2019, suggested a nice recovery trend in 2020 even under pandemic conditions, and then started falling again in 2021.
  • This fiscal year has not looked good for I-829, with increasing processing times and every quarter showing lower productivity than the last.
  • The I-829 inventory reached a record-high 11,160 pending petitions as of June 30, 2021. I-829 are not subject to filing surges, since the volume of I-829 filings is limited by the quota limit on visas issued two years previously. Because demand cannot vary unpredictably, any inventory pile-ups can only be blamed on IPO inefficiency and poor planning.
  • On the USCIS Processing Times Page, the current I-829 “Estimated Time Range” starting at 35.5 months indicates that 50% of recent I-829 decisions were on cases younger than 35.5 months (i.e. filed since September 2018) and 50% of decisions were on cases that had been pending longer than 35.5 months.

And now for some unofficial input, pieced together from shared anecdotes and leaks.

  • I-829 petitions older than 35.5 months (which USCIS reports accounting for 50% of the few recent adjudications) represent about 25% of the total pending I-829 inventory.
  • Within the 50% of recent I-829 decisions made in less than 35.5 months, there was a large range of ages.  The fastest recent I-829 approvals I’ve heard of were for petitions filed in September 2020 and approved just five months later. Such a short wait is uncommon, however.
  • In total, I’m told that there have been just over 600 decisions so far on I-829 filed in 2019 and 2020. That seems like an unfairly large number, considering that thousands of I-829 filed in 2016-2018 are still waiting for attention. However, 600 is still only 10% of total I-829 filed in 2019 and 2020, so 90% of pending I-829 with those recent dates are also still waiting for decisions. Reasons for below-average (<3 years) wait times can include luck, approved expedite requests, and Mandamus actions (which can be filed by groups of similarly-situated plaintiffs, as well as by individuals).
  • Mandamus litigation for I-829 has succeeded in some cases. USCIS can hardly support an argument that they virtuously follow FIFO discipline and thus can’t decide some cases earlier than others, since their internal records would contradict that claim, and their own Processing Time Report “Estimated Time Range” indicates that they have been adjudicating I-829 with dates ranging from earlier than 2016 to later than 2018. USCIS can hardly support a claim that they’re doing the best they can with I-829, considering that they’ve reported falling I-829 adjudication numbers every quarter this year, and are operating well below historical performance. So long as processing conditions are indefensible in fact, there’s basis to ask a judge to compel adjudication. (Hint USCIS: you’ll save so much on lawsuits if you just step up and provide reasonable processing to everyone.)
  • There’s a large reported range in the time it takes USCIS to collect and report biometrics (fingerprints). Most commonly it seems to happen within five months, but occasionally takes years.

What can we expect for future I-829 processing times? The determining factor is IPO productivity in I-829 adjudications, which follows from the resources that they choose to commit to I-829, and the procedures that they choose to implement.

As of last official report (FY2021 Q3), IPO had 11,160 pending I-829 as of June 30, 2021, and I-829 productivity was 448 decisions in three months, or average 150 decisions/month. If IPO continues to process I-829 at a rate of about 150/month, then it will take 11,160/150=75 months to clear the current pending inventory. In other words, the average I-829 filed on June 30, 2021 can expect a 6-year processing time based on current conditions, unless IPO productivity improves from its current level. IPO has the resources to get better. If IPO returned to Summer 2017 performance and consistently averaged 450 I-829 decisions per month, that would change the equation to 11,160/450=25 months expectation to reach June 2021 petitions. A two-year processing time is still too long, but would be far closer to adequate than the six years promised by current performance. On the other hand, if IPO productivity continues the past year’s trend and keeps getting worse, then wait time expectations would get even longer than six years. Obviously that would be no one’s definition of adequate service. Take note USCIS: I-829 needs an intervention and soon.

There’s every reason for I-829 productivity to improve.

  • The legal obligation is there. To quote from the 2020 Final Fee Rule: “DHS acknowledges its obligation to adjudicate Form I-829 filings within 90 days of the filing date or interview, whichever is later. See INA section 216(c)(3)(A)(ii), 8 U.S.C. 1186b (c)(3)(A)(ii).”
  • The path is clear. USCIS is a fee-funded agency, and required to plan and set fees “to ensure that USCIS has the resources it needs to provide adequate service to applicants and petitioners” (again quoting from the 2020 Fee Rule). I-829 service requirements are entirely predictable; the number I-829 filings is a function of the number of principal applicants admitted under the visa quota two years previously. The Fee Rule process allows USCIS to set whatever filing fee it needs to recover the cost of providing adequate service for this predictable workload. There’s just no excuse, from a business planning perspective, to not be providing adequate service for I-829.
  • The resources are available. At last report (in November 2020), the Investor Program Office at USCIS had a staff of 232 people. IPO has only three forms to adjudicate: I-526, I-924, and I-829. During the regional center program expiration, IPO cannot adjudicate any I-924, or any regional center I-526. What is left for 200+ EB-5-fee-funded employees to do but adjudicate I-829? Surely we must see more I-829 progress soon, unless EB-5-fee-funded resources are not being used to adjudicate EB-5 forms.
  • Apparently USCIS does care about I-829 petitioners, at least enough to post this update last week: “USCIS Extends Evidence of Status for Conditional Permanent Residents to 24 Months with Pending Form I-751 or Form I-829”  (Although… why extend receipt notices to only 24 months in reaction to I-829 processing times that have been consistently reported to be well over 30 months?  It’s puzzling.)

USCIS EB-5 Feedback Invitation

The last time USCIS held a public engagement that engaged with EB-5 stakeholders (i.e. went beyond prepared remarks to respond to stakeholder questions) was November 7, 2017. The last time USCIS engaged with EB-5 stakeholders in any form whatsoever was November 15, 2020, when a video of prepared remarks was uploaded to Youtube. (I keep a log of stakeholder meetings back to 2010.) At last, we’re being offered a chance to ask questions, at least. USCIS is not offering a stakeholder meeting yet, but hinting that one may come in the future. I am encouraged by this evidence that USCIS remembers the existence of EB-5.

From: U.S. Citizenship and Immigration Services <uscis@public.govdelivery.com>
Sent: September 7, 2021 10:29 AM
Subject: Ask USCIS a Question: EB-5 Immigrant Investor Program

EB-5 Immigrant Investor Program

Do you have questions about the EB-5 Immigrant Investor Program, also known as the EB-5 program? USCIS would like to hear from you. Your feedback will help us plan future engagement events, update program content on our website and prepare communications materials.

Statutory authorization related to the EB-5 Immigrant Investor Regional Center Program expired at midnight on June 30, 2021. If you have questions about the EB-5 program, the sunset of the Regional Center Program, or any non-case-specific concerns, we invite you to submit them by emailing public.engagement@uscis.dhs.gov by Sept. 23 at 4 p.m. Eastern. Put “EB-5 Question” in the subject line. We will not address case-specific questions. Note to media: Please contact the USCIS Press Office at media@uscis.dhs.gov for any media inquiries.

Responding to Direct EB-5 RFEs

In August 2021, the USCIS Investor Program Office approved only 16 I-526 petitions, but sent out 87 Requests for Evidence (RFE) on I-526. RFE response presents a strategic challenge and opportunity for petitioners: another chance to strengthen the basis for approval and to avoid adding basis for denial.

Most direct EB-5 RFEs ask about the business plan. By the time USCIS reviews I-526 years after filing, every I-526 business plan is deficient at least in the sense of being outdated. The adjudicator reviewing the I-526 does not only want to know what the plan used to be, but how the plan has turned out. A business plan may also be deficient in the sense of being incomplete – lacking validation, or lacking relevant detail about use of investment and job creation. In the worst case, a carelessly-prepared business plan may positively demonstrate that the EB-5 investment does not meet EB-5 requirements.  So what can be done, when USCIS sends an RFE that identifies “deficiencies,” states that “Petitioner has not established eligibility for the benefit sought” and warns “a petitioner may not make material changes to a petition that has already been filed in an effort to make an apparently deficient petition conform to [USCIS] requirements.” How can one correct deficiencies, and also not make material changes? It takes experience, care, and strategy.

Having helped with many RFE responses as a business plan writer, I see three strategic steps:

  1. Identify the USCIS adjudicator’s specific concerns. It helps to be familiar with RFE template language, so that you can distinguish case-specific questions from the boilerplate content.
  2. Regardless of the specific RFE questions, identify what the adjudicator needs to know about the enterprise, investment, and job creation order to approve the I-526.
  3. Prepare an RFE response that addresses specific concerns, provides clarification and evidence to further support compliance with EB-5 requirements, and emphasizes the non-materiality of any changes from the information and evidence previously filed with Form I-526.

Step 1: Identify Explicit Adjudicator Concerns

I start by looking at the RFE and asking myself: “What does the adjudicator think is deficient about this I-526 petition?” Note that business plan-related questions that the adjudicator wrote for the RFE are normally located between these two template sentences: “Upon reviewing the business plan, USCIS finds that the evidence in the record does not establish that the business plan is Matter of Ho compliant” and “For the reasons identified above, the business plan is not credible.” Everything before that first and after that second sentence in the job creation/business plan section is normally template content: generic language that’s simply cut and pasted verbatim into every RFE job creation section. The template content is there for reference, and not necessarily a question or concern. Petitioners tend to be particularly spooked by a 2-3-page list of bullet points for business plan content, with item requests in categories from “Market Analysis” down to “Projections.” That list is in the RFE because it’s part of the RFE template (and I’ve seen versions of it since at least 2012). That list may or may not be in your RFE because the adjudicator read your business plan and found it to be deficient on any of those bullet points.

Step 2: Identify Underlying Eligibility Issues

Strategy does not stop with identifying specific questions in the RFE.  Lazy adjudicators are known to send RFEs with no case-specific questions at all – just an uncustomized RFE template. I’ve seen two such RFEs in the last month – a hint that the adjudicator didn’t even really look at the I-526 record yet, but just sent a generic RFE to get the ball out of the court for awhile. Or, sometimes RFEs specifically request evidence that does not exist for the particular business. Or the petitioner may know of clarifications that need to be added to the I-526 record, although the RFE didn’t request them. So it’s wise to not only react to specific RFE requests, but to stand back and think about the basic eligibility issues, and what can best be added to the I-526 record to support eligibility for I-526 approval and the road ahead.

For example, when an RFE asks for an improved business plan, the eligibility issue is job creation. An improved plan may not be necessary if it’s now possible to replace business plan predictions with the even more compelling job creation evidence of payroll records for employees already hired. When an RFE asks for supply contracts, the eligibility issue is whether the business is viable and active, to be able to create and sustain jobs. So if the business does not have supply contracts, the petitioner can think of other evidence to address the underlying concerns about business activity and feasibility. When the adjudicator was too lazy to look at the I-526 record and ask specific questions, the petitioner can still grasp the RFE opportunity to preemptively provide relevant answers.

For a recent RFE response, I worked with the client to prepare a business plan addendum designed to clarify ambiguities in the I-526 record and to explain COVID-19-related business plan adjustments in context of on-going eligibility. The client had received a generic RFE, with no specific questions about I-526 inconsistencies or subsequent developments. We responded by giving the adjudicator the correct and up-to-date information that we knew he’d need to understand and approve the petition, hopefully preempting confusion and challenge.  

EB-5 eligibility on the project side comes down to three things: (1) investment (2) in a new commercial enterprise (3) that creates jobs. Regardless of what specific items an RFE may request, the I-526 should be approved if the record manages to provide clarity and a preponderance of evidence for eligibility on those three basic points.

Step 3: Avoid Material Change Challenges

Many RFEs include this language in the “Conclusion” section, to remind petitioners of the peril in submitting new information.

If Petitioner submits updated or revised documents, please note that “[a] petitioner must establish eligibility at the time of filing; a petition cannot be approved at a future date after the petitioner becomes eligible under a new set of facts. See Matter of Katigbak, 14 I&N Dec. 45, 49 (Comm. 1971). Therefore, a petitioner may not make material changes to a petition that has already been filed in an effort to make an apparently deficient petition conform to [USCIS] requirements.” Matter of Izummi, 22 I&N Dec. 169, 175 (Assoc. Comm’r 1998); see also 8 C.F.R 103.2(b)(1).

To navigate this Catch-22 for RFE business plan updates, the business plan writer should (1) know what was in the filed I-526, (2) take care to present new facts in context of continuity with the original I-526 filing, and (3) be able to support the basic message that the investment was eligible at the time of filing and remains eligible to this day, even through business developments and document updates. A good RFE business plan update takes care and labor, because it looks backward as well as forward. I start by reading the thousands of pages originally filed with I-526, so that I know where consistency can be highlighted and where new information needs explanation.  I do not only read the original business plan, because when USCIS says “business plan” they really mean “business plan plus supporting evidence,” and business plan updates involve supporting evidence as much as the document that says “business plan” on the cover.  

In the excitement of filing I-526, many people think about documents as mere formalities that exist to check boxes. I-526 can get filed with a document that says “business plan” on the cover, but that does not clarify and validate the specific business and how it meets EB-5 requirements. Unfortunately, some EB-5 business plan writers just specialize in business plan-like formatting, while others follow a snow job strategy of making the plan so confusing and long that the adjudicator will probably just approve it to avoid the work of wading through it.  But when an RFE comes, things get real. The I-526 RFE basically says “your business plan did not just check a box and I do actually want to understand it, and to be convinced that your specific investment qualified and still qualifies for EB-5.” At that point, it’s time to value a business plan with genuine business plan content and shaped by EB-5 expertise. And it’s time to look past the RFE questions and challenges to think through what specifically USCIS needs to know for the petition to succeed.

For more information, see my EB5 Investors Magazine article on Strategies for I-526 RFE business plan updates, and my RFE service page.

In-process EB-5 applicants and legislative stakes

For whose sake should Congress act on EB-5 legislation? The discussion tends to focus on the future of the regional center program, and the question of potential and protections for future EB-5 investment. However, past EB-5 investment must also weigh on the discussion. Regardless of its future, EB-5 certainly has a past: tens of thousands of foreign nationals who heeded the EB-5 incentive created by Congress to invest in job-creating U.S. business through the regional center program, but who do not yet have the offered incentive. Tens of thousands of past regional center EB-5 applicants do not yet have visas. Their on-going process depends on legislation to reauthorize the regional center program, or at least to offer existing investor protections in case of expiration.

Why are people whose EB-5 investment was made and spent many years ago still a factor in today’s immigration policy discussion?  Because: they haven’t immigrated. Contrary to popular belief, EB-5 investment does not purchase a green card. EB-5 only allows foreigners to potentially qualify for green cards in the future based on job creation resulting from qualifying investment.[i] The “EB” in EB-5 stands for “employment-based” not “investment-based.” The ultimate condition for immigration success is not satisfied at the beginning of the process, with the initial investment, but at the end of the process, with proven job creation. This process takes at least five and up to over 20 years. Meanwhile, in-process regional center investors who do not yet have visas represent at least $23 billion dollars currently at work in the U.S. economy.[ii] Table 1 quantifies the population of regional center EB-5 investors and applicants who are currently already in the EB-5 immigration process.

Table 1. EB-5 Process Timing and Population as of 2020

EB-5 Process StageEB-5 investor received a visa yet at this stage?EB-5 investment must be deployed at this stage?Estimated Timing as of 2020Estimated number of regional center investors at this stage as of 2020Estimated number of regional center applicants (investors + family) at this stage as of 2020
Start: make investment and initiate the immigration process     
Qualify for conditional permanent residence (I-526 + visa application)NOYES2-17+ years[iii]Over 40,000[iv]Over 80,000 [v]  
Conditional permanent residence stageYES (conditional)YES2 years[vi]About 6,000[vii]About 18,000[viii]
Remove conditions on permanent residence (I-829)YES (conditional)Not required for immigration1-5 years[ix]Over 9,000[x]About 21,000[xi]
Finish: Proven job creation and  permanent residencyYES  Not required for immigration   
Total  5-20+ yearsOver 55,000About 119,000

When the regional center program expires, then the 80,000+ regional center investors and applicants who do not yet have conditional permanent residence status lose eligibility for an EB-5 green card. This hard fact under current law is evident today, as USCIS is not accepting or acting on Form I-526 or I-485 from regional center investors, and Department of State is not issuing visas to regional center investors. (People who have conditional permanent residence status still have opportunity to complete the immigration process and remove conditions. USCIS continues to accept and adjudicate regional center I-829.) Since June 30, 2021, the immigration process for regional center EB-5 investors has just been frozen, waiting for Congress to act. If Congress does not act, the process will eventually unfreeze, and petitions and applications will be denied. This ends the EB-5 immigration hope but not the investment, which is still held by private parties who can hardly be ordered to suddenly undeploy and return the funds. If the chance for visas is lost, that’s a multi-billion dollar disaster waiting to happen for deployed investment. Switching midstream from regional center to direct investor status is unfortunately impossible due to indirect job creation and material change. Legislation is the only path forward to protect the program as a whole, or at least its past investors.

The moral of the story: (1) industry advocates, remember the size of the constituency that depends on your fiduciary duty, as you gamble for RC program authorization, and (2) investor advocates, push for legal changes that would at least protect in-process investors from mid-stream RC program changes. AIIA has been working for a Foreign Investor Fairness Protection Act (FIFPA) that would provide such protection, and is currently raising funds for a lobbying effort to push the bill.  


[i] USCIS Policy Manual, Volume 6 Part G Chapter 1(A): “The Immigration and Nationality Act (INA) makes visas available to qualified immigrant investors who will contribute to the economic growth of the United States by investing in U.S. businesses and creating jobs for U.S. workers. Congress created this employment-based fifth preference immigrant visa category (EB-5) to benefit the U.S. economy by providing an incentive for foreign capital investment that creates or preserves U.S. jobs.” In contradistinction to some “golden visa” programs around the world, the U.S. EB-5 program is not a “cash for passports” arrangement. For more background see “The Changing Landscape of Immigrant Investment Programs” (October 25, 2019) by Congressional Research Service. https://crsreports.congress.gov/product/pdf/IF/IF11344

[ii] EB-5 investment must remain sustained in the U.S. enterprise and deployed (“at risk”) at least through the end of the investor’s conditional permanent residence period. USCIS Policy Manual Vol. 6 Part G Chapter 5(A)2. Approximately 46,000 regional center investors have not yet reached the end of the conditional permanent residence period, as calculated in Table. 1. Each of these investors must have invested a minimum of $500,000.  46,000x$500,000=$23 billion

[iii] The process to qualify for conditional permanent residence starts with I-526 petition processing, and ends with a visa application and wait for visa availability. I-526 processing has taken 1-5 years, according to processing time reports from USCIS. https://www.dropbox.com/s/dfa4ifgop1vhm63/IPO%20Times%20Dates.xlsx?dl=0 For countries with no visa wait, the visa application normally takes six months or more. Countries with historically high EB-5 demand face a long wait for visa availability at this stage. As of October 2020, Charles Oppenheim, Chief of the Visa Control & Reporting Division at the U.S. Department of State, estimated wait times for EB-5 visa availability for investors filing I-526 “today.” The longest wait time, for China-born investors, was estimated at 17.2 years. The wait times for Vietnam and India were estimated at 7-8 years. See slide 10 of “Part 1: A discussion with Charles Oppenheim” (November 19, 2020) 2020 IIUSA Virtual Forum https://iiusa.org/wp-content/uploads/2020/11/Virutal-Industry-Forum-Visa-Update.pdf

[iv] As of April 2020, USCIS reported 16,633 pending I-526 petitions for EB-5 investors, and 24,005 approved I-526 petitions for EB-5 investors who did not have visa availability yet according to the visa bulletin. A third category is unreported, but likely in the thousands: approved I-526 with visas available but not yet issued. Over 95% of these pending and approved I-526 are likely for regional center investors, judging by past experience. (The regional center category accounted for 95% of EB-5 visas issued from 2012 to 2019.) References: “I-526 Performance Data FY2020 Q1” https://www.uscis.gov/sites/default/files/document/data/I526_performancedata_fy2020_qtr1.pdf “Count of Approved I-140, I-360 and I-526 Petitions as of April 20, 2018 with a Priority Date On or After May 2018” https://www.uscis.gov/sites/default/files/document/data/EB_I140_I360_I526_performancedata_fy2020_Q1_Q2.pdf and “Annual Report of the Visa Office” https://travel.state.gov/content/travel/en/legal/visa-law0/visa-statistics/annual-reports.html

[v] Charles Oppenheim, Chief of the Visa Control & Reporting Division at the U.S. Department of State, estimated a grand total of 83,003 prospective EB-5 visa applicants in process as of October 2020. This estimate includes applications on file at the National Visa Center and estimated applicants associated with I-526 petitions pending at USCIS. It does not include EB-5 applicants with pending I-485 status adjustment petitions: a population in the thousands. Over 95% of the estimated total EB-5 applicants are likely associated with regional centers, judging by past experience. (The regional center category accounted for 95% of EB-5 visas issued from 2012 to 2019.) See slide 9 of “Part 1: A discussion with Charles Oppenheim” (November 19, 2020) 2020 IIUSA Virtual Forum https://iiusa.org/wp-content/uploads/2020/11/Virutal-Industry-Forum-Visa-Update.pdf

[vi] The Conditional Permanent Residence Stage is defined as two years from the date that the green card was granted. USCIS Policy Manual Vol 6. Part G Chapter 5

[vii] People in the CPR stage in 2020 received green cards in 2018-2019. In 2018, 3,160 visas were issued to principal applicants through the regional center program. In 2019, 3,135 visas were issued to principal applicants through the regional center program. See Table 7 of the DHS Yearbook of Immigration Statistics for 2018 https://www.dhs.gov/immigration-statistics/yearbook/2018/table7 and 2019 https://www.dhs.gov/immigration-statistics/yearbook/2019/table7.

[viii] People in the CPR stage in 2020 received green cards in 2018-2019. The Department of State reports issuing 8,995 regional center EB-5 visas in 2018, and 9,064 EB-5 visas to regional center investors in 2019. These figures include investors (principal applicants) and family members. See “Immigrant Visas Issued and Adjustments of Status Subject to Numerical Limitations (by Foreign State of Chargeability): Fiscal Year 2019” https://travel.state.gov/content/travel/en/legal/visa-law0/visa-statistics/annual-reports/report-of-the-visa-office-2019.html and “Immigrant Visas Issued and Adjustments of Status Subject to Numerical Limitations (by Foreign State of Chargeability): Fiscal Year 2018” https://travel.state.gov/content/travel/en/legal/visa-law0/visa-statistics/annual-reports/report-of-the-visa-office-2018.html

[ix] I-829 processing has taken 1-5 years, according to processing time reports from USCIS. https://www.dropbox.com/s/dfa4ifgop1vhm63/IPO%20Times%20Dates.xlsx?dl=0

[x] As of March 30, 2021, USCIS reported 10,309 I-829 petitions pending, of which over 90% were likely filed by regional center investors. (91% of EB-5 visas issued 2010 to 2017 were issued to EB-5 investors.)

[xi] Assumes that the ratio of total visas to investor visas is about the same at Stage 3 as Stage 2.

Visa Processing and I-829 investigation

Visas cannot be issued to regional center applicants while the regional center program is expired, but processing steps short of visa issuance can theoretically be taken, if USCIS and Department of State are willing. USCIS appears to be doing nothing with pending regional center I-485, but Department of State confirms that it is still working on regional center visa application documents — at least for now. The following Q&A is transcribed from minute 17:30 of the Youtube Chat With Charlie for the September 2021 Visa Bulletin.

Q: Is NVC still processing the documents that are being submitted by R5 and I5 applicants who were previously contacted despite those preferences having expired as of June 30?

A: The answer is yes, at this time the National Visa Center has not implemented any type of changes and continues to be processing the cases submitted by R5 and I5 applicants who were previously contacted. These procedures remain under constant review and they may need to be changed if Congress does not authorize an extension of the I5 and R5 categories in the future.

[September 7, 2021 Update: I’m told that NVC has started sending emails with this content, contradicting what Oppenheim said in the chat.

“The EB-5 category pilot program has expired as of June 30, 2021, for applicants seeking a visa under the Regional Center Program.
This includes the following visa categories:

  • I5, for an investor Pilot Program in a targeted area
  • R5, for an investor Pilot Program not in a targeted area

The National Visa Center (NVC) will not act on any new or pending EB-5 visa petitions as described above until further notice. Please do not submit any additional fees or forms to NVC.

If this visa program is extended by Congress, new notification letters will be sent to all case parties. Unfortunately, we cannot predict when a decision will be made. All previously submitted fee payments will remain valid if this program is extended in the future.”]

Other insights from the September and August Chats with Charlie: USCIS is expected to use the Dates for Filing chart for all EB categories in October 2021, no EB categories that aren’t already current are expected to become current in FY2022, Vietnam EB-5 is expected to remain Current throughout FY2022, and only China is expected to have a Final Action Date for EB-5 in FY2022. Mr. Oppenheim stated that he is moving dates based on the numbers theoretically available, despite the pandemic restricting visa issuance in practice. He noted the large EB visa limit for FY2022 (262,288, which would mean a record 18,622 visas theoretically available to EB-5), and also: more numbers available doesn’t necessarily mean more visas can be processed, considering staffing constraints and on-going COVID-19 restrictions.

With the USCIS Investor Program Office currently having little to do but work on Form I-829, I’m trying to find out whether they are, indeed, working on I-829, and more about the I-829 inventory. If you have a Form I-829 pending, or recently approved or denied, could you share a couple details about your case status and experience? I have set up a quick Google Form. (Or if you’d like to share info outside the form, just email me at suzanne@lucidtext.com, or Telegram to 626.660.4030.) Thanks!

Updates (reauthorization, regulations litigation, FY2021 Q3 processing data)

Reauthorization Update: On Wednesday 8/25 at 12PM EDT, the EB-5 investor organization AIIA will hold a webinar to update stakeholders on efforts for legislation to reauthorize the regional center program and protect investor interests. Register here to participate live in the AIIA webinar (or check the Youtube channel later for a recording). See also the most recent AIIA newsletter. AIIA has been unusually open about sharing whatever information they can gather from Congressional staffers and industry contacts about EB-5 legislation, and I recommend the resource. I am not a primary source for advocacy info or opportunities.

Regulations Update: USCIS has indicated that it will appeal the Behring Regional Center decision, which restored the old $500,000 investment amount and TEA rules. For more background, see this EB5 Investors Magazine article and this article by Behring Regional Center. It seems clear that the EB-5 investment amount will not change by regulation any time soon, since court cases take time. USCIS will likely continue to accept I-526 based on $500,000 for some time. However, will USCIS go on to approve I-526 filed today at the $500,000 level? Discuss with your lawyer what will happen to eligibility for pending I-526 if USCIS wins the appeal, and the new regulation thus not vacated after all.

Processing Update: Meanwhile, I continue to get real-time updates that IPO has been handling only a handful of I-526 petitions per day. But thanks to the lack of FIFO discipline, IPO is assigning new as well as old cases, and a number of I-526 filed in late 2019 are already getting reviewed. So some direct EB-5 petitioners will enjoy relatively short I-526 processing times – a welcome development so far as it goes. EB-5 integrity would get such a boost if we could expect that every I-526 would get USCIS attention in months, not years!  So far, the official USCIS Immigration and Citizenship Data page reinforces what my leak says: that productivity at the Investor Program office has still not improved under the Biden administration, and in fact has gotten worse for I-829 as well as I-526 through June 2021 — according to the FY2021 Q3 update. I continue to wait for new leadership at IPO to address this trend. (I am not reporting on receipts in the FY2021 Q3 USCIS report, because I note an error. The report is missing hundreds of I-526 receipts that were received during the reporting period on June 29 and 30, but apparently physically entered into the case tracking system in the first days of July, outside the reporting period.)

I-526 Status Report: July 2021

At last report (in November 2020, the last time IPO deigned to have a stakeholder engagement of any kind), the Investor Program Office at USCIS had a staff of 232 people. What are these people doing, especially now during the regional center program lapse when USCIS decided that “we will not act on any pending petition or application of these form types that is dependent on the lapsed statutory authority.” Are IPO staff busy making progress with the direct EB-5 inventory and I-829, or are they doing something else in or out of the office?

Before I share some inside information on this question, consider the workload facing IPO’s staff of 232 people. Current IPO management is unknown (former Chief Sarah Kendall having left back in November, and a replacement not yet announced), but if you were management, how would you allocate IPO’s staffing and fee revenue resources? What level of processing productivity would you expect?

FormPending Inventory as of 3/31/2021Completion Rate (Average Touch Time per Form)Status during regional center program expiration
I-52613,044 (direct I-526 likely <10% of total)8.65 hoursOnly direct EB-5 I-526 are being processed
I-82910,3658.15 hoursAny forms can be processed
I-92415234.95 hoursNo forms can be processed
SourceQuarterly reportProposed Fee RuleWebsite Alert
Investor Program Office Workload as of 2021

The only official window into IPO productivity comes from quarterly reports with limited data published after months of delay on the USCIS Citizenship & Immigration data page. I chart these data reports to track trends in IPO resource allocation and productivity.

In my frustration at USCIS’s limited and delayed data reporting, I also welcome leakers:  confidential sources within USCIS who can share information that the public should know. I will now share some recent I-526 information from a source that I cannot name but believe to be solid.

I-526 Data Leak: July 2021

  • In the last week of June 2021, between the Behring lawsuit decision (June 22) and the regional center program expiration (June 30), USCIS received 405 I-526 filings.
  • From the 4th of July holiday until the end of July (July 6-30), IPO issued 16 I-526 approvals and 32 denials. At the same time, IPO issued 77 RFE and NOID on I-526 cases. The following is the priority date distribution (calendar year) of these actions: 2015 2%, 2016: 13%, 2017: 16%, 2018: 38%, 2019: 31%.  The priority date range was from September 2014 at oldest to July 2019 at youngest.
  • In July 2021, 16 people withdrew their I-526 petitions.

As I look at these numbers, here’s what strikes me as significant.

More I-526 were filed in the last week in June 2021 than in the entire previous year and half. That shows strong demand for EB-5 at the $500,000 minimum investment, a high level of industry preparation for the Behring court win, and optimism about regional center program prospects.

I-526 adjudication volume was extremely low after 4th of July: only 48 decisions and 77 notices in 21 working days – in other words, fewer than 6 total actions per day on average, and just over 2 decisions per day on average. We’d feared that one consequence of regional center program lapse on June 30 could be IPO decision to move resources away from I-526 adjudication, and that appears to be happening, at least so far. In January to March 2021 IPO adjudicated 882 I-526, and I thought that was extremely low. But that was an average 14 decisions per working day, in addition to RFEs. And now they’re down to barely over 2?

USCIS reported in the 2019 Fee Rule that adjudicative “touch time” for I-526 is less than 9 hours per form on average. If that report is accurate, how few people must have been assigned to I-526 in July 2021, to result in an average of only 2 decisions and 6 total actions per working day? Can it be that with 232 people on staff, funded at least half by I-526 fees, that IPO had fewer than 10 people assigned to I-526 cases in the month of July? I have not been informed about IPO staffing allocation decisions, but feel that the public has a right to know whether a fee-funded agency is using fees to provide the paid-for service.

I have not been told yet how the I-526 inventory divides between direct and regional center cases, but by historical averages it’s possible that only about 1,000 direct I-526 remain to be adjudicated. IPO adjudicated that many cases per month in 2016-2018, and at least adjudicated that many per quarter until recently. But if July 2021’s productivity were the new normal, with only about 2-3 decisions per working day, then even 1,000 I-526 would take forever to process. I have not yet been given I-829 data or staffing data, so I can’t tell whether the I-526 loss is temporary, and whether it is balanced by gains for I-829. If 232 IPO staff are mostly not processing I-526, and not processing I-924, they must be doing something EB-5-related, I hope? (Sarah Kendall attributed part of the huge IPO productivity drop in 2019 to “temporary assignment of IPO staff to other agency priorities” — i.e. staff sent outside to work on non-EB-5 cases. That was an inexcusable use of EB-5 fee-funded resources, and I hope that’s not happening again now.)

I note that 2/3 of IPO’s actions in July 2021 were sending RFEs and NOIDs, supporting my anecdotal observation that IPO rarely decides a direct EB-5 I-526 these days without sending an RFE first – often, an RFE that basically requests I-829 evidence. This practice naturally slows the process and reduces volume of completions.

If, as USCIS claims, “We generally process cases in the order we receive them,” then we’d see a fairly tight date distribution in I-526 actions. The July 2021 data, with actions distributed over I-526 from 2015 to 2019, reinforces what we can also see in the USCIS Processing Times Report “Estimated Time Range”: that I-526 processing is hardly FIFO in practice.

I was not told whether IPO is still using the visa availability approach for I-526, even now with the RC program expiration already drastically reducing the active I-526 inventory. It would be interesting to know whether any/many of the older I-526 actions in July 2021 were on Chinese cases. I do note that most denials in July were on the oldest cases, reinforcing the intuitive sense that delayed adjudication means higher adjudication risk.

USCIS does not normally report withdrawals, but for public policy reasons we need to know how many people are choosing to exit the program, even after having made investments. I will continue to track this number with interest and concern.

The details reported in this post are a fraction of what we’d like and need to know about what’s going on behind the scenes at IPO. I am thankful for whatever I can get, and will continue to make periodic (probably, monthly) reports so long as I can keep my sources. I hope that public exposure can help to encourage accountability and performance at IPO.  Going forward, IPO civil servants, please act like you are being observed and might be accountable to the public.

And for anyone at USCIS/IPO who sees this post, I welcome you to join my public-spirited leaker community. Reach out to me by phone or on Telegram at (626) 660-4030, and let’s chat. The list of areas where USCIS should but doesn’t have public transparency include IPO leadership, I-829 performance, IPO staffing allocation, IPO training, the country composition of the I-526 inventory, the distribution of I-526 receipts by regional center, reasons for increasing denial rates, and I-485 processing for EB-5 cases, to name a few priorities. I would love to hear and share confidentially whatever you can tell me in these areas, for the good of program integrity. And ideally: encourage leadership to start holding public EB-5 stakeholder meetings again, publish timely data for everyone on the USCIS website, and perform in a way that does not justify reproach and desperate measures to get basic information.

I am happy to see that leadership change is starting at the top anyway, with Ms. Ur. M. Jaddou now confirmed as USCIS Director. Her first statement this week sounds great: “As USCIS director, I will work each and every day to ensure our nation’s legal immigration system is managed in a way that honors our heritage as a nation of welcome and as a beacon of hope to the world; reducing unnecessary barriers and supporting our agency’s modernization.”

Sizing the reauthorization hurdle

I’ve been overwhelmed with everything that could be written, in this period of unparalleled transition, opportunity, and existential crisis for the EB-5 industry and investors. I’ll start by getting out a few words on the elephant of regional center program reauthorization, so that I can move on to many updates about USCIS processing, policy revisions, visa numbers and timing, and direct EB-5. And my business plan writing day job, also.

Before I begin my editorial about reauthorization, note that I’m summarizing and commenting from a distance on what I’ve read and heard. You can get more information and direct involvement by joining an advocacy group. Regional Centers and service providers can join IIUSA and/or EB5IC to get educated and influence legislative efforts. For EB-5 investors, I recommend joining AIIA. This organization is off to an impressive start in getting meetings with Congressional staff and industry decision-makers, and holds regular video call updates to involve and inform even small donors. For Chinese investors specifically, I see that AAED has recently been the largest spender on EB-5 lobbying.

And now, my perspective on the outlook for regional center program authorization.

Question: When will the regional center program be reauthorized? Answer: after Congress agrees to the industry’s reauthorization wish list, or the industry backs down and accepts sub-optimal reauthorization legislation. Practically, September 2021 now appears to be about the earliest that reauthorization could happen, and the latest it should happen.

Everyone seems to agree that regional center program authorization can’t get passed as a stand-alone bill, but must get loaded onto one of the big legislative trains going through Congress. That could mean the infrastructure bill being finalized right now, or the budget reconciliation and appropriations bills that will come up in September. The disagreement comes with the question: how big a reauthorization bundle can and should we try to load onto a legislative train?  How small a bundle can the industry agree to present, and how large a bundle will Congress be willing to take onboard?

With S.831/ H.R.2901, Senator Grassley made a relatively small bundle: just reauthorization with integrity measures. Integrity measures are not fun for the industry, but they are politically uncontroversial. No Congressperson is going to get slammed in the media or face an election challenge for having voted for integrity measures. EB-5 industry groups dislike some details, but they unite in saying that they support integrity measures. The industry association IIUSA supports S.831 because it’s a small bundle, and thus relatively easy to fit on a legislative train. The industry association EB5IC opposes S.831 because it’s a small bundle, and thus leaves some important industry priorities behind on the platform. EB5IC accepts reauthorization and integrity measures, but wants that to be bundled together with programmatic changes to reopen new investment: TEA/investment amount changes and visa set-asides. AAED, the group lobbying particularly for Chinese investors stuck in a terrible backlog, wants reauthorization to be bundled with visa relief.

Both EB5IC and AAED see reauthorization as the prime and only near-term chance to get what they need on a legislative train, and thus they balk at allowing a smaller reauthorization bundle to proceed instead. But the things that EB5IC and AAED want to add to reauthorization are politically controversial, thus increasing the risk that legislative trains will pass by without accepting such large bundles.  A Congressman can get slammed in the media and his next primary for having been seen to support TEA changes that obviously benefit prosperous urban developers. If he supports additional visas or new admissions for EB-5, he’ll incite everyone who’s against immigration, and also spark opposition from everyone who’s in favor of immigration but wants the same benefits for different categories. The politically-costly legislative bundles contemplated by EB5IC and AAED would have some great benefits for the EB-5 industry, if only they could be passed, but they create a high political hurdle for reauthorization. The industry has previously agreed that that TEA and visa relief asks are desirable, but now disagrees as to whether they’re at all achievable.  

And thus the reauthorization fight so far has happened on the loading dock, with disagreements about what to try to get on a train together with reauthorization. When Senator Grassley, with IIUSA’s support, brought S.831 up for Unanimous Consent on June 24, Senator Graham, pushed by competing industry factions, blocked S.831 from passing the Senate. In their webinar on June 24 prior to the Unanimous Consent effort, EB5IC explained the reasoning behind this block: they said that they do support integrity measures, but do not want a long-term reauthorization that omits and thus defers their other priorities of TEA/investment amount changes and visa set-asides.  (Senator Grassley attempted to compromise by offering the industry a shorter-term reauthorization – 2.5 years instead of 5 years – but this was not accepted.)  EB5IC went on to reference their negotiations behind the scenes for alternative legislation, and foresaw the infrastructure bill as a possible vehicle, with Senator Schumer as a possible champion willing and able to heft a larger and more valuable reauthorization bundle onto that vehicle.

We spent the month of July waiting, wondering if the industry factions with the will and power to temporarily block the advance of the low-risk low-reward Grassley reauthorization bill would also have the will and the power to advance a more ambitious alternative path to reauthorization. Senator Schumer and his group finalized the text of the infrastructure bill yesterday. The text as of August 1 spans over 2,000 pages and covers a number of economic development programs. It does not include the regional center program. I’m sad but not surprised. With all the effort to rid the infrastructure bill of controversial elements, could Senator Schumer possibly have agreed to pick up a heavy reauthorization bundle weighted with controversial elements, as had been hoped? And yet would industry groups have allowed him to pick up less, considering their objectives for reauthorization?

If the infrastructure bill proves to be a missed opportunity, then industry groups should re-assess how much they can expect and afford to demand in the next reauthorization attempt.  If Congressional negotiators wouldn’t touch TEA changes and EB-5 visa relief in the infrastructure bill, would these asks have a chance to board the next legislative train? Senator Grassley’s S.831/H.R.2901 remains an option, if the industry can accept a medium-term reauthorization with integrity measures, and without other programmatic changes in the medium term. The option of a “clean” no-change short-term reauthorization with the September funding bill is impossible, if Senator Grassley has power to make good on his strongly-worded promise to block such a move. A clean long-term reauthorization is even less an option, since no one but IIUSA would support it. Senator Grassley would oppose it as long-term deferral of his priority integrity measures, while industry groups would oppose it as long-term deferral of their priority programmatic changes. So long as we get long-term reauthorization at all, it’s going to be a bundle of some kind – a bundle that’s a compromise between what the interested parties want and what the interested parties are willing to give. (I don’t bother to account for the majority of Congress and the public who hardly realize or care that EB-5 even exists, and who lack the interest or the power to affect RC program authorization.)

We cannot afford to miss the next opportunity for legislative vehicle. Senator Grassley has little reason to shed tears if the regional center program stays expired due to dissatisfaction with his bill, which he is supporting for his own reasons and not on behalf of constituents. Industry groups do have reason to seriously consider compromise on their priorities, if necessary to get authorization, and the Senators only involved as a favor to constituents have reason to listen to them. AAED’s investor constituents have already suffered greatly from RC program expiration, with long-awaited consular interviews in Guangzhou scheduled and then abruptly cancelled, U.S. jobs lost, and thousands of visas going to waste. Chinese investors have much to lose if reauthorization happens without visa relief, but likely even more to lose from forcing reauthorization to wait for the blue moon of achievable visa relief. Some regional centers are hardened by belief that the EB-5 program is dead with or without reauthorization, unless Congress adds programmatic fixes. But regional center constituents will suffer too if the program stays expired long enough to result in mass I-526 denials, investors fighting for exits for their capital, and wide reputational damage. Regional center EB-5 petitions and applications are being held in abeyance for now, not denied, but USCIS and Department of State may reassess that policy if the fiscal year ends on September 30 with no progress yet toward RC program authorization. That’s a lot of pressure on industry to get reauthorization legislation attached to one of the legislative vehicles available by September 2021, one way or another. Let’s be serious about making reauthorization as probable as possible within that informal deadline. Reauthorization runs genuine risk of continuing to miss the train indefinitely, unless we are realistic.

This is my understanding, based on what I’ve read and heard. You’re welcome to post dissenting views in the comments. But even better, take action that makes a difference. Get involved in advocacy, get the interested factions to hear your voice, and let good results prove you right.

And finally, because I’m a business plan writer and prefer tables to paragraphs, here’s an attempt to summarize the various interests and priorities in table form.

 Priorities for EB-5 Legislation, as of June 2021
Interested FactionRegional center program authorizationIntegrity measuresTEA/investment amount flexibilityVisa set-asidesVisa backlog reduction
Senator Grassley & Senator LeahyPriority (but only if combined with integrity measures)Top PriorityOppose changes to minimize distressed and rural incentivesWere willing to consider this in the pastGrassley opposes increasing immigration
IIUSATop PriorityWilling to supportWas willing to consider this in the pastWas willing to consider this in the pastSupports in theory but believes to be politically impossible now
“Holistic faction” (e.g. EB-5IC)Top Priority (but only if combined with programmatic fixes such as TEA and set-asides to make EB-5 more usable)Generally supportive; a few quibblesTop Priority (goal to make a wide range of projects viable for EB-5 by minimizing high-unemployment and rural incentives)Top Priority (set-asides could mitigate the RC’s backlog problem by offering new investors a shortcut around the backlog)Speaks supportively but tentatively (“hope” “maybe”). Set-asides would only have an effect if the backlog continues to exist.
Chinese EB-5 investors specifically (e.g. AAED)Priority (but only if combined with visa backlog relief)Probably mostly supportiveNot a major concernAppear willing to consider, assuming concurrent backlog reliefTop Priority (more EB-5 numbers, changes to priority, or at least advance parole)
EB-5 investors generally (e.g. AIIA)Priority (but Top Priority is rather protection for past investors, even if without reauthorization)Generally supportive; a few quibblesNot a major concernStrongly opposed, considering negative impact on backlogged investors Would make backlog reduction a top priority if possible (but opposes backlog reshuffle)
The public, the media, and Congress in generalNot a high priority but also not terribly controversial; relatively small and little-known program using <1% of visas; some negative perceptions about program integrityNot controversial; everyone likes integrity; program is perceived to need reformSomewhat controversial, if too-obviously designed to minimize distressed and rural incentivesNot very controversial: “TEA set-aside” sounds good, and those who object to a fast-track to new Chinese investment do not realize that such is the desired effectVery controversial, because triggers those who oppose immigration and those who support immigration but want benefits for other visa categories
*Note that Senator Grassley and Leahy are the only Congressional representatives I’ve listed as an “interested faction,” because it appears that they are the only representatives who are interested for themselves, based on personal motivation. This is compared with other Senators and representatives such as Schumer and Cornyn who are interested and involved in EB-5 only on behalf of constituents, based on what the constituents want, but would not act on EB-5 out of any personal interest.

USCIS Policy Manual EB-5 Updates (regulations, reauthorization, indebtedness, CSPA)

The USCIS Policy Manual is a fluid online document that gets edited periodically, with and without notice, which is exciting and disconcerting. Being someone who likes to know the rules, I save copies of the PM at different dates, and redline changes. In July 2021, USCIS made several PM updates that affect EB-5. However, redline shows that the updates are minor, and reflect policy that’s been in place for awhile already. Here’s my document highlighting specific EB-5 content added to the PM in July 2021.

  1. Regulations update. I’d wondered when USCIS would acknowledge the Behring lawsuit win by revising policy language about EB-5 investment amounts and TEAs. On July 15, 2021, USCIS made a minimal Policy Manual revision: simply copying and pasting the same “Alert” about the Behring lawsuit that’s on the USCIS website EB-5 homepage into the beginning of Policy Manual Volume 6 Part G, Chapters 1, 2, 3, 4, and 5. USCIS did not revise the body of the PM.  So if you go to Chapter 2 today, the body of the chapter still says that the EB-5 investment amount since November 21, 2019 is $1.8 million, or $900,000 in a USCIS-designated TEA, but the header alert clarifies that the required EB-5 investment amount is $1.0 million, or $500,00 in a state-designated TEA and “In other words, we are applying the regulations in effect before Nov. 21, 2019 in this chapter.”  With this update, USCIS takes another important step to officially acknowledge the Behring lawsuit outcome. At the same time, the minimal note implies that someone does not expect the outcome to last long enough to justify actually revising rather than merely footnoting the old policy language.
  2. Regional Center lapse update. Also on July 15, USCIS acknowledged the regional center program expiration by adding an “Alert” to the beginning of Policy Manual Volume 6 Part G, Chapters 1, 2, 3, and 4 (but not Chapter 5 on removal of conditions). Again, the body of the PM was not revised, presumably reflecting hope that the RC program expiration also will not last long. The “Alert” added to the PM is identical to the first half of the “Alert” put on the USCIS website regional center page. The PM alert does not include the language about RFE response, I-829, or I-485.
  3. CSPA: On July 26, USCIS announced a Technical Update – Adding References to the EB-5 Visa Program in Child Status Protection Act Guidance. It appears that the single change was to add the words “Immigrant Petition by Alien Investor (Form I-526)” to the list of applicable underlying forms for status adjustment.
  4. Indebtedness: On July 22, USCIS announced a POLICY ALERT – Immigrant Investors and Investment of Loan Proceeds. Redline shows that this update did no more than to replace a couple words in the Policy Manual with the word “indebtedness,” and to add a footnote that “USCIS no longer follows its interpretation of indebtedness as including the investment of loan proceeds as of November 30, 2018, the date of the district court decision Zhang v. USCIS, 978 F.3d 1314 (D.C. Cir. 2020).” Since USCIS lost the Zhang court case in November 2018 and lost its final appeal of that decision back in January 2019, USCIS should have been “no longer following its interpretation” for over two years now already. The new Policy Manual footnote is merely a belated acknowledgement of that fact. See also the “Class Action Member Identification Notice” that’s been on the USCIS website EB-5 homepage for a couple years now. And more to the point, see Administrative Appeals Office decisions that sustain appeals of I-526 denials over loan proceeds. For example: JUN162021_01B7203 and MAR242021_01B7203. If you are a member of the class whose I-526 was “denied on the sole basis of investing loan proceeds that were not secured by their own assets,” you have had and still have the right to get that denial vacated and reconsidered.

Direct EB-5 Resources

The permanent direct EB-5 program has been the focus of new interest, now that the regional center program has expired until the industry can agree on legislation that Congress will agree to pass. Direct EB-5 offers valuable opportunities, and many challenges.

I will write more as time permits, but for the moment note that I have a detailed and well-documented Direct EB-5 Page to address questions about how direct EB-5 works.

I mention this page again, because I am receiving advertisements for direct EB-5 deals that appear non-compliant. I can see that the promoters are accustomed to regional center EB-5, and have not thought through all the implications of a basic direct EB-5 difference: that the New Commercial Enterprise and the Job-Creating Entity must be formally one and the same, meaning that all NCE requirements also apply to the JCE and vice versa. This well-known structural fact has a cascade of less-obvious practical consequences for direct as opposed to regional center EB-5, including differences with respect to preexisting business investment, investment terms, investment structure, investor role, investor source of funds, timing considerations, and exit options. (See my Direct EB-5 page for discussion and examples.)

Direct EB-5 is personal for me because I have written over a hundred direct EB-5 business plans – many of them in 2015-2017 during the surge of direct EB-5 demand that occurred around the last cliff-hanger regional center program sunset date in 2015. Every plan meant a business and entrepreneurs that I got to know, and it’s been satisfying and sometimes painful to follow their stories. I’ve had years now to watch outcomes unfold, in USCIS review and in business development. There have been successes I’d love to see again, and tears that I’d like to help avoid going forward. Everyone attempting direct EB-5, take time to educate yourselves. Work with people who have walked a distance on the direct EB-5 path, and learned the hard lessons of practical experience.

I’ll end with a chart that illustrates how the direct EB-5 opportunity has been used over the years, according to numbers of EB-5 visas issued. Note that direct EB-5 accounted for a majority of EB-5 visas until the regional center opportunity gained popularity following the financial crisis in 2008. Direct EB-5 got another boost around 2015, when the fight over regional center program authorization legislation encouraged people toward the relative stability of direct EB-5. That boost was gradually depressed by long processing times and practical challenges that particularly impact direct EB-5, combined with a complacency around short-term regional center program extensions. Direct EB-5 demand may revive again now in 2021, as the regional center program fights for authorization, and direct investors may be able to skip ahead in waiting lines and take advantage of a temporary window for reduced investment amounts. Note that direct EB-5 investors have historically been more tolerant of higher investment levels than regional center investors. A significant percentage of direct EB-5 visas to date were based on investments at the $1 million dollar level, even twenty years ago.