Recap of new EB-5 data and guidance (FY2024 Q1, NVC wait list, visa bulletin, Q&A, RC Audits, Ombudsman)

April 10, 2024 11 Comments

While I rushed to help clients wrap up business plans before the April 1 USCIS fee increase, the government has also been admirably productive. This post recaps my “to report” list of new EB-5 data and new EB-5 guidance published over the past month and a half.

USCIS publishes FY2024 Q1 Processing Data

The USCIS Immigration and Citizenship Data page was updated last month with stats for EB-5 form receipts and adjudications in FY2024 Q1 (October to December 2023). As usual, I updated my Processing Data page with charts for the official quarterly performance numbers. I also updated charts of unofficially-obtained monthly performance data.

USCIS rendered decisions on 19 I-956F and approved 194 I-526E in Q1. The median I-956F processing time was 15.2 months. Processing volumes for pre-RIA petitions remained elevated (and got even better in 2024, according to my unofficial data).

Another 581 I-526E/I-526 were received in Q1, bringing the cumulative total of post-RIA petition filings to 3,401. It will be interesting to see what happens when all those people reach the visa stage, bringing spouses and children, considering the number of set-aside visas available.

DOS published November 2023 NVC Wait List

Department of State published the November 2023 NVC waiting list, providing a snapshot of how many EB-5 visa applicants were registered at the National Visa Center as of November 1, 2023.  The report shows that over 33,600 Chinese, over 1,600 Indians, and over 4,600 rest of world applicants were queued up for consular processing at the start of the fiscal year. The number of people qualified for I-485 status adjustments is unknown.

Visa Bulletin through May 2024

As of May 2024, the Visa Bulletin Chart A and Chart B dates for EB-5 are still the same as DOS set at the start of the year in October 2023. No surprise, considering how many people qualified for visas at those October dates. The April 2024 visa bulletin included a note at the end: “EMPLOYMENT-based categories: Very little to no forward movement is expected in the coming months…”

Visa Availability and Monthly Visa Issuance through February 2024

DOS has 14,169 unreserved EB-5 visas and 8,136 set-aside visas available to distribute in FY2024 (including carryover of unused set-aside visas).  

Monthly statistics show that in the first five months of FY24 (October to February), DOS issued 4,052 unreserved EB-5 visas (including 1,907 in Guangzhou and 286 in Mumbai). That’s an average total of 810 visas/month issued through consulates. Visa issuance will need to exceed an average 1,181/month overall to avoid wasting unreserved visas this year. We need to find ears for Carolyn Lee’s good point that visas carried over from the set-aside categories are outside the normal rollover cycle, and should never be lost to EB-1/EB-2 but stay with EB-5 until used by EB-5.

Zero reserved visas had been issued through consulates as of the end of February 2024. (I’ve heard of a few through status adjustment.) As a reminder, here are the codes for EB-5 visas, as defined by a posting in the July 2023 Federal Register.

 Visa Classification Petitions Filed Before March 15, 2022Petitions Filed On or After March 15, 2022
5th UnreservedRegional CenterI5, R5RU
DirectC5, T5NU
5th Set Aside RuralRegional Center RR
Direct NR
5th Set Aside High UnemploymentRegional Center RH
Direct NH
5th Set Aside InfrastructureRegional Center RI
EB-5 Visa Codes

USCIS EB-5 Q&A Updated

The page EB-5 Questions and Answers (updated Dec. 2023) linked to the EB-5 Resources page was updated on April 1 to delete mention of biometrics fee in connection with I-956H, and again on April 3 to add a subsection titled “Legacy Form I-526 Months of Inventory Update.” The new subsection announces USCIS intention to add another data point to the USCIS Processing Times page: “months of inventory,” calculated as remaining I-526 inventory divided by average completions over the past six months. This makes sense, because what matters for prediction is not how long I-526 has taken in past experience (as reflected in the scary 80th percentile data point reported on the USCIS page), but instead how long processing will take going forward (which will be a function of inventory and adjudication volume). “For example, for the month of March 2024, the 80th percentile processing time was 54.5 months while the Months of Inventory was around 14 months.” The Processing Times page has not been updated yet, but I look forward to the inclusion of this meaningful data point.

USCIS Guidance for Regional Center Audits

This week USCIS created a new EB-5 Regional Center Audits webpage for regional centers to learn more about the auditing process, including the role of the audit team, how to prepare for an audit, and participating in an audit. Bookmark the audit page so you don’t lose it, because it’s not currently linked to any of the main EB-5 pages on the USCIS website. The page includes a lot of helpful detail about the standards and process involved in an audit, and FAQ for regional centers and investors.

CIS Ombudsman publishes EB-5 Engagement Notes and Q&A

Since last year, the CIS Ombudsman has been aggressive in meeting with multiple EB-5 stakeholder groups and working with USCIS to get answers and solutions to EB-5 questions and concerns. The Ombudsman hosted an Engagement with USCIS on the EB-5 Immigrant Investor Program on October 30, 2023, and has now published the engagement presentation plus an extensive EB-5 Q&A on the engagement page. Apparently it took six months to get government signoff to publish these documents, and no wonder since they address hot button issues around RIA implementation, including USCIS policy for the investment sustainment period. Be sure to read the Q&A, which generously covers several points that aren’t addressed elsewhere and weren’t covered live in the meeting.

Filed under EB-5 Resources

The trouble with the EB-5 sustainment timeline (comment on IIUSA lawsuit and proposed rule, EB-5 process table)

April 5, 2024 9 Comments

Last week IIUSA sued USCIS over Q&A that interpret the two-year minimum investment sustainment period, disputing that the EB5 Reform and Integrity Act of 2022 (“RIA”) actually changed the EB-5 sustainment requirement. Concurrently, IIUSA petitioned USCIS for rulemaking to write a minimum five-year investment holding period into the EB-5 regulations.  This move is potentially extremely consequential for the program and for investors, and also problematic. My comment brings a perspective from EB-5 process timing.

The IIUSA litigation complaint explains why regional centers would seek government support for holding on to EB-5 funds for a minimum of five years:

97. As explained above, USCIS has long required investors to sustain their investment “over the two years of conditional residence.” 8 C.F.R. § 216.6(c)(1)(iii). This longstanding rule has incentivized regional centers to invest in high-quality projects that are more likely to generate return for investors, create the necessary number of jobs, and deliver benefits to the community at large. The practical reality is that these large-scale projects require longer investment periods, and as such the industry standard investment term for regional center-backed projects has typically been at least five years, and often longer.

The court might ask in response to this allegation: Why has the industry standard investment term “typically been at least five years, and often longer,” considering that the law and regulations have only ever name-checked “two years” when discussing the EB-5 sustainment period?

In practice, long holding periods have depended on USCIS capacity problems and visa oversubscription to insert delays in the EB-5 process around conditional permanent residence.  The CPR period is the only EB-5 immigration process stage with a firm time attached (two years); all other stages in the process can be very short or extremely long depending on agency processing capacity and workflow and visa availability. The expected EB-5 investment period can vary wildly depending on processing delay plus whether/how the investment period is contingent on immigration milestones.

EB-5 Process Stage1. Time from I-526 or I-526E petition filing to petition approval2. Wait time for visa number3. Time from I-526 or I-526E approval  or visa availability  to visa issuance4. Conditional Permanent Residence5. Time from I-829 filing to removal of conditions for permanent green card
How long is it supposed to take?<120 days for TEA or <240 days for non-TEA (target I-526 processing time set by RIA)No visa wait time so long as EB-5 usage keeps within visa supply limitsVaries depending on USCIS and DOS workload and staffingExactly 2 years by definition from admission under the EB-5 visa, with I-829 filed in the last 90 days of the period.<90 days (target I-829 processing time set by 8 U.S.C. 1186b (c)(3)(A)(ii))
How long can it take?USCIS reports median I-526 process times since 2019 of 19 to 52 months (Total time is determined by USCIS workload and staffing. Adjudication touch time per I-526 is 20.69 hours per USCIS completion rates)Visa wait time can be extremely long (10+ years), in the proportion that EB-5 applicants exceed annual visa supply.Historically around 6 months if no delay; can extend to  years in case of processing constraints.Exactly 2 years by definition from admission under the EB-5 visa, with I-829 filed in the last 90 days of the period.USCIS reports median I-829 process times since 2019 of 26 to 49 months (Total time is determined by USCIS workload staffing. Adjudication touch time per I-829 is 15.86 hours per USCIS completion rates)

If the EB-5 process functioned as Congress intended, then the EB-5 investor could complete the immigration process within three years of the time of investment. People are so used to delay that they forget to do the math. Congress set a goal of 120-240 days for the I-526E processing (per the RIA Timely Processing targets, now in 8 U.S.C. 1153 note). After I-526E approval, the investor applies for the visa that initiates a two-year conditional residence period. (This period was set at two years by the Immigration Act of 1990 “to deter immigration-related entrepreneurship fraud”). The visa application is delayed by nothing but USCIS/DOS capacity to move paperwork, schedule interviews, and approve adjustments, unless excess visa number demand forces visa number waits. After 21 months of conditional permanent residence, the investor can file I-829 to remove conditions. I-829 processing is supposed to take about 90 days (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).”) or at any rate <240 days according to the RIA Timely Processing target. So much for government intent.

Investors take longer than three years to complete the EB-5 immigration process if and when (1) processing delays occur and/or (2) EB-5 gets oversold resulting in lengthy wait times for visa numbers. Both problems have been endemic for years, such that actual immigration times have predictably exceeded five or even ten years for many EB-5 investors as noted above. That doesn’t make the immigration delay situation normal or a right, however.

Part of the outrage over the IIUSA lawsuit comes from tacit admission that the plaintiff regional centers rely on the lengthy investment holding periods underwritten by immigration delays, and fighting to keep immigration support for such economically-advantageous holding periods. If established business models rely on an immigration process lasting much longer than two years, then they depend on USCIS processing problems and visa EB-5 oversubscription. That’s the sad fact, given process facts as outlined above. What gives?  Will IIUSA sue USCIS for the progress it’s recently made toward realizing the RIA timely processing goals, because accomplishing timely processing could undermine projects that need to hold EB-5 money for much longer than the 3-year delay-free immigration process? Will IIUSA sue USCIS to conceal I-526E filing data, because such data helps avoid the visa oversubscription that can profitably inflate wait times? Will IIUSA advocate against visa relief, because lack of visa wait times would undercut profitably-long holding periods? Of course IIUSA would not consider such steps. But then why try to force lengthy holding periods specifically as an immigration necessity through litigation and rulemaking?

Immigration necessity has never been the only reason for an EB-5 investment decision. The holding period for an EB-5 investment is not simply the minimum period required by USCIS for immigration purposes – however that period may be calculated and defined — but also the time it takes a project to successfully create jobs and support an exit strategy. The promise of a five-year exit strategy is realistically more reliable than the promise of a two-year exit strategy for many types of projects, regardless of the EB-5 context. EB-5 investors have historically been willing to accept the prospect of a five year holding period as reasonable for the types of high-quality projects they want to invest in. Considering what’s practical on the investment side, projects with a two-year duration were likely not common even in the years before EB-5 processing delay. Of the 3,000+ EB-5 investments made since the EB-5 Reform and Integrity Act of 2022, I doubt many were in projects offering a two-year exit strategy, even though such projects have been technically allowable immigration-wise under USCIS interpretation of RIA. Investment holding periods around five years have indeed long been offered by regional centers and accepted by investors as reasonable to the type of investment, regardless of immigration policy.

But the general acceptability of a five-year metric does not make the IIUSA lawsuit right, or the rulemaking likely to succeed. If only a five-year holding period requirement had ever existed in law/policy, then IIUSA might sue USCIS to get it back. But it didn’t; “five years” was only ever an industry tradition. (Seeking an origin for the tradition, all I can find is Canadian government intent for the previously-popular five-year Canadian investor visa program that helped influence early industry expectations for EB-5. I blame Canada.) The only time reference for EB-5 in U.S. law or policy since 1990 was a conditional period defined as two years, though vulnerable to being deferred by processing delays and visa waits. All that IIUSA can sue to get back is a connection between that vulnerability and investor holding periods.

If the IIUSA lawsuit can convince a judge that USCIS invented its Q&A guidance, and that RIA didn’t actually decouple the required two-year EB-5 investment period from the two years of conditional permanent residence, the immediate result would be a return to holding periods indexed to however long it takes to get a visa number and start conditional permanent residence. Such a position could kill the future EB-5 market by reviving the nightmare prospect of redeployment. It could also betray the 3,000+ EB-5 investors who committed to the EB-5 program since the EB-5 Reform and Integrity Act of 2022, investing in reliance both on (1) the holding period specified in the offering, and (2) on the RIA law change, and USCIS confirmation of a minimum holding period not conditioned on immigration delay to conditional permanent residence. Why does industry wait to bring in nearly $3 billion dollars from post-RIA investors (incidentally creating the conditions for visa wait delay), then ask a court to pull the rug out from under the law/guidance that helped attract that investment, and that would protect from immigration delay?

In its statement for the public, IIUSA emphasizes that “Importantly, the purpose of this lawsuit is not to return to the previous sustainment policy that required many EB-5 investors to redeploy their capital for extended periods.” That’s good.  However, the IIUSA lawsuit does argue for the previous policy of sustainment through CPR (see for example points 20, 100, 102, and 105 in the complaint). The IIUSA strategy depends on a two-step play to (1) convince a judge that RIA did not actually change the sustainment rules, but also separately (2) convince USCIS to itself change the sustainment rules via formal notice and comment rulemaking. IIUSA suggests to USCIS a fair-looking rule that would delete the CPR link (restoring the generally likeable change that RIA arguably made) while also introducing a 5-year minimum time (thus finally aligning USCIS policy with long-standing industry tradition).

Unfortunately the IIUSA strategy could only deliver on IIUSA intent to avoid previous sustainment policy if the lawsuit fails, or if the USCIS rulemaking process is short and reliable. If the lawsuit wins and rulemaking is slow and unreliable as usual, we’ll be stuck with the old policy IIUSA doesn’t want. For historical context, here’s the timeline of the last EB-5 regulation (EB-5 Modernization): USCIS announced that it was working on an EB-5 rule in 2014 and informally invited stakeholder comments, published the draft rule in the Federal Register as a Notice of Proposed Rulemaking in 2017, accepted public comments in 2017, published a Final Rule in 2019, and vacated the rule in 2021 following industry success in suing USCIS over the rule’s unfavorable content. The USCIS rulemaking process can be shorter than this, but I wonder if anyone can point to an example that took months not years. I also note that the public already provided extensive feedback to USCIS on the sustainment period following invitations to submit comments and questions for USCIS stakeholder meetings and the Ombudsman EB-5 meetings in 2023.

I suggest that plaintiff regional centers should have adopted a less perilous and tenuous strategy: education. If your projects practically need a five-year or longer holding period, then explain that to prospective EB-5 investors in economic terms, just as you’d explain to any investor. Show prospects how your offering is a better/more reliable/more profitable investment opportunity than the other guy who’s offering a shorter term, even if a shorter term is technically allowable under immigration rules. Remind investors that existing and long-standing USCIS guidance puts only a floor but no ceiling to EB-5 investment terms. The USCIS Q&A clearly says: “The INA establishes only minimum required investment timeframes for purposes of applicable eligibility requirements and does not place any upward limit on how long an investor’s capital may be retained before being returned. Regional centers or their associated new commercial enterprises can negotiate longer periods of investment directly with their investors independently of EB-5 eligibility requirements.” Point out that for investment and immigration purposes, the investment term naturally can be and must be as long as it needs to be to economically support required job creation and an exit. The economically-necessary term can plausibly be 5+ years for some if not most excellent projects, even as any promises of near-term exit strategies naturally merit extra scrutiny from investors.

What’s wrong is the attempt to claim or create an immigration necessity for lengthy investment holding periods, and try to force investor decisions in favor of long-term projects by saying that this isn’t just the economic case but what Congress and USCIS actually require for your visa. Such claims flounder for basis, reflect a shameful reliance on processing/visa delay, provoke investor outrage, and hurt the market. Program integrity will particularly suffer if the lawsuit is seen to betray the 3,000+ post-RIA investors who already committed to EB-5 before the lawsuit was filed to challenge USCIS interpretation of RIA, and now thrown into uncertainty and unforeseen exposure to visa-delay-induced redeployment risks beyond their initial agreed investment term. I am willing to believe that IIUSA leadership intended no such outcome, but what can be done to avoid it now that the lawsuit has been filed?  

Filed under EB-5 Law & Policy, EB-5 Statistics

Good news for I-526 and I-829 processing

March 12, 2024 37 Comments

And finally, I get to report good news! The Investor Program Office seems to be turning a corner with petition processing. Official results aren’t out yet for months since September 2023, but preliminary data for recent pre-RIA I-526 and I-829 completions show the continuation of an encouraging trend. We’re hearing anecdotally about timely post-RIA I-526 and I-526E adjudications as well. Kudos to USCIS Director Jaddou and IPO Chief Emmel, who promised the improvements that we’re now seeing realized. As processing volume significantly increases, processing times have a chance to come down. For detailed analysis of what’s changed behind the scenes with I-526 and I-829 processing, and implications for processing times going forward, see my article “Recovery for EB-5 processing times” guest published on the Houston EB-5 blog. I have a pipeline of articles in process for industry colleagues, and will link here as time permits for publication. I also regularly update the Processing Data page on this blog.

Filed under EB-5 Statistics

Sensitivity analysis for set-aside visa backlog questions

March 11, 2024 Leave a comment

A couple weeks ago AIIA published the results of a Freedom of Information Act request showing that as of the end of 2023, at least 1,093 rural investors and 2,185 high unemployment investors had filed EB-5 petitions with USCIS. (See the AIIA post for the data and link to an extensive webinar.) Now there’s the battle of interpreting and forecasting from those numbers. What will happen when those investors from 2022/2023, together with their spouses and children, encounter visa availability that’s about 4,000 in the first year and 2,000 in subsequent years for rural, and 2,000 in the first year 1,000 in subsequent years for high unemployment (with further limits from country caps once total visa-stage demand exceeds total supply)? How bad or not-bad-at-all could the backlog situation possibly be for rural and for high unemployment set-asides, considering the scope for variation in assumptions about final visa demand and future visa supply? I think the best industry analysis so far is from IIUSA, which just put out a report by Lee Li “Calculating Demand and Supply for Reserved EB-5 Visa Numbers: Data, Factors, Knowns, Unknows, and Estimates.” I like Lee’s analysis because it doesn’t imply only one possible conclusion from the I-526E data and also doesn’t just say “there’s uncertainty in the variables” and then stop, as if implying that any uncertainty means “so don’t bother thinking about this, you can’t and shouldn’t try to account for this, there are no reasoned conclusions to be drawn, really anything could be possible, believe whatever you/I want you to believe.” Instead, Lee’s analysis models a way to take uncertainty in hand and consider a reasonable range of probability by modeling scenarios. Lee’s analysis focuses on the I-526E inventory as of the end of 2023. We can use the same approach to run scenarios for the possible situation as of today, as exacerbated by another four months of I-526E filings. (To facilitate projections, I recommend getting AIIA’s detailed report of filings by month.)

So long as I’m recommending articles, I’d also like to mention David Bier’s illuminating paper “Green Card Approval Rate Reaches Record Lows” (February 15, 2024). The article isn’t specific to EB-5, but a reminder of demand/supply imbalance issues throughout the immigration system. The charts and graphs alone are excellent and thought-provoking, and I much appreciate his analysis and conclusions.

Filed under EB-5 Statistics

What the Report of the Visa Office 2023 shows about unreserved EB-5 backlog status for China, India, and ROW

March 9, 2024 7 Comments

The Department of State has published its Report of the Visa Office 2023, including the final tally of EB-5 visas issued by country through consular processing and adjustment of status in FY2023.

The visa office report can be examined as an indicator of market interest in EB-5 visas, showing the countries of origin for EB-5 applicants in the last year, whether those applicants were already residing in the U.S. (thus adjusting status) or located abroad (getting visas through consulates), whether the applicants invested in regional center or direct projects, and whether the applicants chose Targeted Employment Area investments.  At the very end of this post, you’ll find the tables I typically make to summarize visa office report data relevant to EB-5 market demand. Spoiler: EB-5 visas are still overwhelmingly going to applicants in Asia based on investment in regional center legacy TEA projects. (In FY2023, Department of State was not able to issue any set-aside TEA visas.)

But first, I’ve prepared tables based on my primary interest: what the visa office report tells us about visa backlog status for China, India, and Rest of the World countries. For my first chart, I take FY2023 EB-5 visa issuance numbers and put them in context of the 11/2022 NVC wait list (which shows how many EB-5 applicants were registered and waiting at the National Visa Center at the start of the fiscal year), and FY2023 visa availability (which shows how many EB-5 visas could/should have been issued under numerical limits during the fiscal year).

The good news for everyone: visa issuance in FY2023 met and even slightly exceeded the EB-5 annual limit (at least for unreserved) for the first time since 2017! No unreserved EB-5 visas wasted!

Good news for India and China. DOS did not limit India to 7% of unreserved visas in FY2023, but allowed nearly 7% of total EB-5 visas. China was allocated thousands more visas in FY2023 than one might have expected given the number of “rest of the world” applicants waiting for visas. On the other hand, Chinese and Indians should note the difference between applicants who were registered at NVC in late 2022, and consular visas issued in 2023. The difference equals the number of applicants who were already waiting in 2022 and apparently still waiting a year later: a difference that gives a reality check for interpreting the visa bulletin. Realizing that 731 Indians who registered at NVC in 2022 or earlier still didn’t have visas in late 2023, we know that the inventory of pre-2020 Indian priority dates can’t be clear, regardless of visa bulletin dates, unless denial rates were extremely high. I’ll be interested to see the NVC wait list as of 11/2023, which should be published shortly.

I’m most concerned looking at the visa issuance numbers for countries other than China and India, which are not limited by country caps and yet left many applicants behind. (As DOS clarified in 2023, country caps only limit the short list of countries that exceed 7% across all EB+FB categories. China and India are the only countries that are both high demand in EB-5 and also high demand across all visa categories. But countries without the individual 7% limit can still run up against constraints.) Of the more than 5,000 Rest of World EB-5 applicants registered at the National Visa Center in late 2022, over 3,000 didn’t get visas in FY2023. Those applicants weren’t constrained by anything in FY2023 except consular capacity to schedule interviews; technically 3,000 visas could have gone to them in FY2023 instead of being considered “otherwise unused” and assigned to China over China’s country cap. (Unless denials account for a significant part of the gap, but the consular EB-5 denial rate is historically not very high — averaging 9% in 2016-2021.) DOS apparently left many ROW applicants to wait in a small backlog, which I foresee is about to become a large backlog as USCIS is finally aggressively approving I-526 and advancing thousands more ROW applicants to the visa stage. (Another post on this coming soon – the latest I-526 and I-829 processing numbers are excellent.) Backlogs can be a wait time issue even for countries not subject to country caps, as you know by looking at any visa bulletin and seeing the final action dates for ROW in EB-2, EB-3, and EB-4. The backlog tipping point in EB-5 for “rest of the world” countries will come when ROW applicants for unreserved visas collectively exceed 86% of unreserved visas available – i.e. when ROW unreserved reaches about 6,000 applicants. (Logic: Chinese and Indian unreserved applicants have older priority dates than most ROW applicants, so Chinese and Indians will get allocated EB-5 visas first up to the 7% cap for each country, collectively claiming 14% of visas. So more recent ROW applicants collectively can’t be allocated more than 86% of visas in a year, and any ROW applicants exceeding that threshold will be cut off by the visa bulletin and have to wait for visa availability in a future year.)

I went on to make a table showing the multi-year trend in visa availability, demand, and issuance for China, India, and ROW. The table highlights the tragedy of 2020-2022, when COVID-19 followed by the nearly year-long regional center program shutdown resulted in the loss of 25,880 EB-5 visas. The table illustrates that processing capacity for ROW visa issuance has been a long-term problem, with consulates regularly issuing thousands fewer visas than available to and demanded by ROW. On the other hand, this problem for ROW has been a boon to applicants from China, whose numbers depend on the number of visas leftover from ROW (except in 2020-2022, when China’s numbers sadly depended on a closed consulate and closed regional center program).

In thinking about supply and demand for unreserved visas, we want to not only look at what’s been happening at the visa stage, but also visualize what’s coming down the pipeline as more I-526 get approved. The following table shows the steps I take to estimate the total pipeline demand for unreserved visas as of the end of 2023. Note that this table only estimates demand from pre-RIA investors. Any post-RIA investors who go for unreserved visas will be placed – based on priority date order – at the end of the pre-RIA queues. In other words, my estimate of the existing unreserved visa pipeline suggests that a post-RIA applicant for an unreserved visa would find himself #40,000+ in the China unreserved queue, #5,000+ in the India unreserved queue, or #15,000+ in the Rest of World unreserved queue. Not the place to be, with only 6,800+ total unreserved visas available annually! We’re concerned to see the set-aside queues filling up, because there’s obviously no room for spill-over into the unreserved category.

Calculation StepsPre-RIA Unreserved Visa Demand EstimateChina UnreservedIndia UnreservedROW UnreservedTotal UnreservedNote
AI-485 pending as of 10/1/20227362348931,864Total is actual; per-country is a guess considering visa issuance
BNVC wait list as of 11/202238,8741,3625,26245,498Actual
ChinaIndiaROW 
 CConsular visas Issued FY235,6848151,8558,354Actual
 DAOS visas issued FY235781847011,463Actual
E=C+DTotal Visas Issued 20236,2628152,7409,817Actual
ChinaIndiaROW 
F=B-CPeople waiting at NVC in 11/22 still waiting in 11/2333,1905473,40737,144Actual
G=A-DI-485 pending as of 11/22 still pending as of 11/2315850192401Total is actual; per-country is estimate
ChinaIndiaROW 
HEstimated new visa applicants in 2023 from I-526 approvals in 20231,0001,5004,1006,600Estimate from I-526 approvals in 2023 (world is actual, per-country is guess based on known per-country inventory as of 3/2022 and PD of I-526 approvals in 23), assumes 2.5 visas per approval
IEstimated future visa applicants from pre-RIA I-526 currently still pending as of 11/20236,0003,0008,00017,000Estimate from pending inventory (world is known, per-country is guess based on known per-country); estimate 2 visa demand per pending I-526
ChinaIndiaROW 
J=F+G+H+ICONCLUSION: Estimated total pre-RIA unreserved visa pipeline as of 11/202340,3485,09715,69961,145 
IVisa pipeline at I-526 stage as of 11/2023                   6,000                    3,000                    8,000           17,000 
F+G+HVisa pipeline at visa stage as of 11/2023                 34,348                    2,097                    7,699           44,145 

And finally, tables summarizing market-relevant data from the Report of the Visa Office 2023.

Filed under EB-5 Statistics

Update on I-526 and I-526E filings to 11/2023 (pipeline demand for rural and HU visas)

February 29, 2024 4 Comments

See “AIIA FOIA Series: Updated I-526E Inventory Statistics for 2023” (February 29, 2024) for another important update on pipeline demand for rural and high unemployment set-aside visas. I helped make the charts for this article, and encourage everyone concerned about potential backlogs and wait times to read the article, donate to AIIA (so they can keep doing this!), get the Excel from AIIA with all the details, and work on your own analysis. (Shout-out to Matt Galati, who donated his formidable litigation skills to pushing the data request through the FOIA process.)

I don’t have time at the moment to write in detail about what I see, and in any case I advise that you start by grappling with the facts yourself. Then you’ll be prepared to interpret the variety of motivated/limited conclusions that you will hear from others. EB-5 supply/demand and timing analysis is complicated in detail but basically simple: demand > supply = backlogs and wait times. And so we try to track demand.

The data we can get from USCIS — a count of I-526 and I-526E receipts by petitioner country of origin and TEA category — is not an exact predictor of future visa demand. But it’s extremely useful to know, at least, how many investors have entered the queues for rural and high unemployment visas, even as we have to guess about factors such as queue speed through USCIS processing, denial rates, family sizes at the visa stage, and pace of incoming demand since the last report. (I refer to the new queues as “pipeline demand” for rural and high unemployment visas, because so far it is still mostly just in the pipeline, not at the visa stage. I watch the Department of State monthly visa issuance reports, and no set-aside visas had been issued by consulates yet at least up to last report for January 2024.)

A note on dates: it’s a little hard to tell how many months are fully accounted for in the latest FOIA response. USCIS sent AIIA a table with rows through January 2024, but entered just a few numbers in the rows for recent months. Unless people almost stopped filing petitions over the winter, I guess that the latest FOIA request gives data that’s complete through at least October 2023, only partially counted for December and January, and maybe partially counted for November. (If only USCIS had better systems, and could just print reports without so much struggle and fuss! As it is, I suspect that these FOIA responses require someone going to the warehouse and shuffling through paper to make a tally.) But even if we only look at the I-526 inventory accumulated up to November 2023, there’s already a significant message about demand versus future supply of EB-5 visas.

Filed under EB-5 Statistics

Analysis of USCIS Fee Schedule Final Rule and EB-5 fee increases

January 31, 2024 7 Comments

Today the Federal Register published a Final Rule for USCIS filing fee changes scheduled to take effect on April 1, 2024.

The Final Rule includes major increases to EB-5 form filing fees, which is a near-term gift for EB-5 marketing (“Hurry! File now before the fees go up!”), a challenge for service providers (as we try to accommodate the feast of applicants rushing to beat the fee increase and to plan for the subsequent famine), and a long-term benefit to USCIS coffers and burden on EB-5 users (to the extent that EB-5 forms still get filed under the disincentive of increased fees on top of insufficient EB-5 visa availability).

The new EB-5 fees will take effect from April 1 unless or until blocked by litigation or superseded by another EB-5 fee rule. Litigation successfully cancelled the last USCIS fee increase attempt in 2019/2020; I don’t know about litigation prospects this time. DHS is separately working on a different fee study for EB-5 that was mandated by the EB-5 Reform and Integrity Act and due by March 2023. The RIA-mandated study will eventually result in different EB-5 fees designed to support timely processing, but “that effort is still in its early stages” according to the Final Rule. DHS explains that “the provisions of the law are not effective until DHS takes the steps it requires to be implemented.” We fans of Yes Minister know how to interpret the Final Rule statement that DHS has so far “initiated a working group to begin drafting the rule” required to support timely EB-5 processing.

The EB-5 fee increases in the Final Rule are identical to those proposed last year in the Notice of Proposed Rulemaking (NPRM). Good old DHS listened to the chorus of public criticism on the NPRM and accepted some of our corrections – including on the key variable of EB-5 filing volume – but did not recalculate the EB-5 fees in the Final Rule. Multiplying projected annual receipts by filing fee, we can see that the NPRM anticipated generating $80.7 million in EB-5 fee revenue, while the Final Rule projects $139.7 million in EB-5 fee revenue. DHS initially calculated high EB-5 fees based on the need to spread costs across projected low fee-paying receipt volume, then realized receipt volume could actually be much greater, but still decided to keep the high fees.

Summary of EB-5 filing fee changes

FormFiling fee since 2016Proposed filing fee in NPRMProjected annual receipts in NPRMProjected annual receipts in final Fee RuleNew filing fee effective 4/1/2024, per Final Rule
I-526/I-526E$3,675$11,1603,9004,050$11,160
I-829$3,750$9,5253,2504,500$9,525
I-956$17,795$47,69562400$47,695
I-956F$17,795$47,695 600$47,695
I-956G$3,035$4,470728875$4,470
I-956H00 2,0000
I-956K00 5000
Total or Weighted Avg. $10,1637,94012,925$10,806

Here is the formula that DHS uses to calculate filing fees according to its “full cost recovery model,” and how the inputs changed for EB-5 between the NPRM and Final Rule.  (For detail, see my exhaustive article for IIUSA on the NPRM fee-setting methodology.)

 Fee Setting FormulaDifference in inputs and results between NPRM and Final Rule for EB-5 forms
ACost Baseline: “the resources necessary for individual USCIS offices to sustain operations and deliver services.”No change indicated (NPRM reported this amount as $59.4M)
B“Average Annual Projected Workload Receipts”Increased in Final Rule
C=A/BFee per receipt required for cost recoveryDecreased in Final Rule
D“Cost Reallocation”: Additional fee “to provide services for which USCIS does not receive revenue”Increased, apparently
E=C+DFiling fee per receiptNo change

In the Final Rule, DHS increased its estimate of EB-5 fee-paying receipts while deciding to keep EB-5 filing fees the same. In other words, DHS apparently decided to increase cost reallocation to itself instead of passing along anticipated economies of scale to the customer. As the Final Rule notes with satisfaction: “Increasing the fee-paying receipt forecasts for these workloads conversely increased the estimated revenue generated by EB-5 fees. DHS also revised the USCIS budget to reflect these changes.” The EB-5 program not only has no cost to the US taxpayer, it actually helps to fund the government with form filing fees calculated to generate millions of dollars to USCIS above the anticipated cost to process EB-5 forms. Table 11 in the Final Rule quantifies cost/benefit impacts, and notes that “Annual transfer payments from EB-5 investors and regional centers to USCIS will be approximately $44,746,040.”

As the Final Rule explains: “Full cost recovery means not only that fee-paying applicants and petitioners must pay their proportionate share of costs, but also that at least some fee-paying applicants and petitioners must pay a share of the immigration adjudication and naturalization services that DHS provides on a fee-exempt, fee-reduced, or fee-waived basis. …Under the ability-to-pay principle, those who are more capable of bearing the burden of fees should pay more for a service than those with less ability to pay. The requirements of immigrant investor program indicate that immigrant investors and regional centers have the ability-to-pay more than most USCIS customers.”

(To be fair the net windfall to USCIS is only theoretical, since actual receipt volume will likely fall far below USCIS estimates. It’s not wise for the government to plan on ongoing fee revenue from 600 new EB-5 projects and more than 4,000 new EB-5 investors per year when it only offers enough visas to accommodate fewer than 2,000 new EB-5 investors per year on average, considering set-aside visa numbers and spouses/children.)

Here is an index with links to content in the Final Rule relevant to EB-5 stakeholders.

Filed under EB-5 Law & Policy

FY2023 Q4 EB-5 Form Data Report (I-526, I-526E, I-829, I-956, I-956F)

January 4, 2024 13 Comments

USCIS has updated the Immigration and Citizenship Data page with reports for forms filed and processed through FY2023 Q4 (the year and quarter ending September 30, 2023). For EB-5 numbers, I look at All USCIS Application and Petition Form Types (Fiscal Year 2023, Quarter 4) (PDF, 183.88 KB), the California Service Center numbers at Application for Adjustment of Status (Form I-485) Quarterly Report (Fiscal Year 2023, Quarter 4) (PDF, 337.2 KB) and Form I-140, I-360, I-526 Approved EB Petitions Awaiting Visa Final Priority Dates (Fiscal Year 2023, Quarter 4) (PDF, 121.52 KB). I enter the quarterly numbers in my spreadsheets and compare against previous reports to identify trends and answer questions.

My top questions when I look at new EB-5 data: what’s the latest news on pipeline demand for post-RIA visa numbers? How many regional center projects are on the table, and what progress is USCIS making in adjudicating project applications and investor petitions? Are processing volumes increasing or decreasing for pre-RIA and post-RIA forms? What’s the latest news on I-956 and I-956F processing times?

Trend for I-526 and I-526E receipts

Are post-RIA investor petition numbers continuing to climb? How does incoming and cumulative demand look when compared against set-aside visa availability?

Answer from Q4 data: The linear upward trend continued, for a cumulative total of over 2,600 post-RIA I-526 and I-526E filed as of September 30, 2023. (The figure could be nearly 3,000 if one sums quarterly receipt numbers instead of believing the period-end pending and processed numbers.)

If we assume a visas-to-investor ratio of at least 2-to-1 (thinking about family sizes and denials), then 2,600 petitions filed translates into potential demand for at least 5,200 post-RIA visas accumulated in the pipeline as of September 2023. If we guess that filings in Q3 and Q4 continued the previous category breakdown (known from AIIA’s FOIA request of data through Q2) of 23% rural and 70% high unemployment, that would likely mean at least 1,200 pipeline rural applicants and at least 3,600 pipeline high unemployment applicants accumulated by September. If we guess that demand since April moved 100% to rural (the unlikely worst-case scenario for rural and best-case scenario for HU), that could mean at least 4,000 rural and 2,000 HU visa demand in the pipeline by September 2023. The pipeline — continuing to grow as I-526E continue to come in — is headed toward visa availability of about 4,000 rural/2,000 high unemployment in the first year, and about 2,000 rural/1,000 high unemployment in subsequent years. Important considerations for people wondering about future visa wait times that are a function of visa demand exceeding visa supply.

I-526E filings show strong demand to invest in the U.S. and support U.S. job creation; we need visa numbers sufficient to support and sustain that potential. An important advocacy focus for the EB-5 industry, as we face 2024 and beyond.

I-956 and I-956F Volume and Processing Times

How many projects are potentially out in the market raising EB-5 capital, and how many have been reviewed by USCIS? How many regional centers has USCIS reviewed for compliance under RIA?

Answer from Q4 data: USCIS reports a total 12 I-956F project applications processed in FY2023, and 231 I-956F project applications still pending at year-end. In other words, USCIS had reviewed only 5% of the total projects potentially out raising funds. However, I have personally heard about many I-956F approvals in December 2023, so hopefully the next quarterly I-956F report will look better. And I’m happy to see that USCIS has reviewed at least 148 (nearly 40%) of the 379 I-956 regional center applications filed through September. For whatever reason, USCIS is not disclosing denial rates for either I-956 or I-956F – only reporting on total forms processed. The median processing time looks good for the few forms that did manage to get processed – 9 months for I-956 and 12.8 months for I-956F. (This is a nice reference for applicants whose forms that didn’t get processed yet, and who may want to file Mandamus actions.)

from Processing Data Report for FY2023 Q4 (July 1, 2023 to September 30, 2023)

FormFY2023 ReceivedFY2023 ApprovedFY2023 DeniedFY2023 Total ProcessedFY2023 Q4 PendingFY2023 Q4 Processing Time
I-956274 H D1482319
I-956F185 H D1223112.8
I-956G313 –   –   –  256 N/A
I-956H2,350 –   –   –  3,188 N/A
I-956K644 –   –   –  579 N/A

Post-RIA I-526E processing

How is USCIS doing on advancing post-RIA applicants to the visa stage by approving I-526E investor petitions?

Answer from Q4 data: I-526E processing data appears for the first time on the Q4 report, which records 63 I-526E approvals (no denials) both for FY2023 Q4 and the full year. If all 63 investors whose I-526E were approved in FY2023 Q4 can manage to get a FY2024 visa, that’s about 120 to 240 post-RIA visas. Not near the thousands of carryover visas available on a use-it-or-lose-it basis to set-aside categories in FY2024, but much better than nothing!

Pre-RIA I-526 and I-829 Processing

What’s happened to pre-RIA petition processing as USCIS also tries to accommodate the post-RIA workload? Are we anywhere near digging out of the processing collapse that started in 2019? How long will it take to clear the current I-526 and I-829 backlog, if recent processing volume continues?

Answer from Q4 data: USCIS has not abandoned pre-RIA petitions, and obviously made extra effort to improve I-526 and I-829 volumes for the fiscal year-end. There’s been a fairly consistent improvement trend since the rock bottom of 2021, which is great to see. But in a wider context, the best efforts of FY2023 Q4 are still only barely as good as mid-Pandemic processing volume, and still three times lower than the I-526 volumes USCIS was achieving prior to 2019. FY2023 ended with just under 10,000 I-526 and 10,000 I-829 pending. You do the math for how long it would take to clear that inventory if USCIS continues to adjudicate at a rate of 1,300 I-526 and 800 I-829 per quarter. The Investor Program Office must continue to ramp up its efforts (not slack off, as we’ve seen so far in the months since September).

People at the back of the inventory for I-526 and I-829 processing need not necessarily despair about their processing times, however, because processing is not close to FIFO. I know from other sources that USCIS has recently primarily been processing I-526 filed in November 2019 – nearly the end of the I-526 queue – and has been approving many I-829 filed in 2020, 2021, 2022, and even 2023, even as the median I-829 processing time reflects cases filed in 2019. See the charts below and on my regularly-updated Processing Data page the processing distribution of recent I-526 and I-829 approvals.

The I-526 denial rate continues to appear very high (37%); however, I have inside information that more than half of the decisions reported in the I-526 denial category in Q4 were actually voluntary withdrawals. The I-829 denial rate was 15% in Q4 — slightly higher than average. USCIS has reported no I-526E denials yet.

And finally, a note for anyone who benefits from my data reports that you are welcome to help make all this work worthwhile with a Paypal contribution. Happy New Year!

from Processing Data Report for FY2023 Q4 (July 1, 2023 to September 30, 2023)

FormReceivedApprovedDeniedTotal ProcessedPendingProcessing Time
I-526 (Pre-RIA) –  8144771,2919,52750.5
I-52657 –   –   –  182 N/A
I-526E88863 –  632,431 N/A
I-8292406711177889,98952.7

Filed under EB-5 Statistics

EB-5 Questions and Answers (updated by USCIS December 2023)

December 26, 2023 Leave a comment

I just happened to notice that on December 21, USCIS made unannounced additions to the EB-5 Resources page. The section formerly titled EB-5 Questions and Answers (updated Oct. 2023) has been replaced by a different EB-5 Questions and Answers (updated Dec. 2023). A document comparison between the October and December versions shows that USCIS did not edit the previously-published content, but added four new questions and answers related to regional center withdrawals, I-956G and Integrity Fee requirements, investor eligibility following regional center termination, and how the sustainment period change affects the conditional permanent residence requirement.

New Q&A quoted from EB-5 Questions and Answers (updated Dec. 2023)

13. How can an approved regional center that does not wish to continue participation in the Regional Center Program withdraw from the Regional Center Program?  

The EB-5 Reform and Integrity Act of 2022 (RIA) did not change the process for withdrawing from the Regional Center Program and requesting a termination of a regional center designation. When an approved regional center does not want to continue participating in the Regional Center Program for any reason, a regional center may withdraw from the program and request a termination of its regional center designation pursuant to 8 CFR 204.6(m)(6)(vi). The regional center must notify USCIS of its withdrawal in the form of a letter or as otherwise requested by USCIS. Once USCIS receives a termination request is received, we will evaluate the request and notify the regional center of our decision on the termination request in writing.

Regional centers can mail the letter to:

U.S. Citizenship and Immigration Services 
Immigrant Investor Program Office, 
131 M Street, NE, 3rd Floor, Mailstop 2235, 
Washington, DC 20529

Or the regional center can email the letter to: uscis.immigrantinvestorprogram@uscis.dhs.gov

14.  Where can I find information about approved or terminated regional centers and the reasons for termination?

USCIS publishes a list of approved and terminated regional centers on our website. In addition, USCIS publishes termination notices that are final agency actions in the electronic reading room.

USCIS approved regional centers

USCIS terminated regional centers

USCIS regional center termination notices

15. Do all designated Regional Centers, including those approved prior to March 15, 2022, need to file an I-956G by December 29?

Yes, INA 203(b)(5)(G) requires that each designated regional center shall submit an annual statement, in a manner prescribed by the Secretary of Homeland Security. The Secretary has designated the Form I-956G, Regional Center Annual Statement, as the manner to collect this information. The instructions for the Form I-956G implement the statutory requirement and provide that each approved regional center must file Form I-956G for each federal fiscal year (Oct. 1 through Sept. 30) on or before Dec. 29 of the calendar year in which the federal fiscal year ended. It’s important to note that these dates relate to regional center designation. If a regional center is designated but has a pending amendment, they still need to file the Form I-956G. Form I-956G and its filing requirements were published in the Federal Register on Sept. 2, 2022, 87 FR 54233.  Following public notice and comment, Form I-956G was approved by OMB on July 24, 2023, and subsequently published for use by USCIS. USCIS has also mentioned the filing requirements previously at stakeholder engagements as well as via alerts on our website, including most recently at the Oct. 30, 2023, joint engagement with the CIS Ombudsman and the Nov. 6, 2023, alert on the USCIS website.

For regional centers that fail to file Form I-956G by the required filing date, INA 203(b)(5)(G)(iii) states that USCIS shall sanction designated regional centers that do not file the required annual statement (which DHS designated as Form I-956G). In accordance with this statutory directive, USCIS will sanction regional centers who fail to comply with the requirement to file their Form I-956G, up to and including termination from the Regional Center Program.  

3.    Can EB-5 investors continue to pursue their immigrant visa petitions and receive benefits if their regional center is terminated for failure to pay the EB-5 Integrity Fund Fee, provided all other eligibility requirements are met?

Yes, EB-5 investors associated with a terminated regional center may retain eligibility and receive benefits under certain circumstances as provided by INA 203(b)(5)(M).  However, pre-RIA investors and post-RIA investors may need to take different actions to retain their eligibility because of the different requirements and legal provisions that apply to them.

Pre-RIA investors may, in certain situations, remain eligible based on indirect jobs, as applicable to their petition before the RIA was enacted notwithstanding termination of their associated regional center. Accordingly, where regional center termination is based on failure to pay the EB-5 Integrity Fund fee, which would generally not otherwise directly affect or implicate the underlying investment or job creation, officers may generally determine, in their discretion and on a case-by-case basis, that a pre-RIA investor associated with a terminated regional center continues to be eligible for classification as an immigrant investor, despite the regional center termination and without the need to reassociate with another approved regional center or make an investment in another new commercial enterprise. Such determinations will be made in accordance with applicable USCIS policy regarding deference to prior determinations to ensure consistent adjudication. Also, USCIS will generally not consider such termination a material change that impacts continued eligibility. While regional center termination for failure to pay the required EB-5 Integrity Fund fee may generally not have an effect on pre-RIA investor eligibility in many, or even most, circumstances, it is certainly possible that an investor may invest with a regional center that both fails to pay the required EB-5 Integrity Fund fee and also have project-related eligibility concerns, such that petitioner eligibility is affected separate from the regional center’s termination for failure to pay the required EB-5 Integrity Fund fee. If the pre-RIA investor’s eligibility is affected, they may need to reassociate with another approved regional center or make an investment in another new commercial enterprise to retain eligibility under INA 203(b)(5)(M) since they may not continue to be eligible.

Post-RIA investors, however, are not subject to the same grandfathering provisions of the RIA as pre-RIA investors but are subject to the new requirements added by the RIA, such as the requirement under INA 204(a)(1)(H)(ii) to remain associated with an approved project application under INA 203(b)(5)(F) (Form I-956F). Consequently, post-RIA investors associated with a terminated regional center may retain their eligibility under INA 203(b)(5)(M) if:

Their new commercial enterprise reassociates with another approved regional center (regardless of the regional center’s designated geographic area); or

They make a qualifying investment in another new commercial enterprise. In either case, post-RIA investors should generally continue to be associated with an approved Form I-956F (filed by their new regional center for their existing new commercial enterprise or otherwise associated with the different new commercial enterprise into which they have invested) for purposes of remaining eligible under all applicable requirements.

USCIS will notify investors of the termination of their associated regional center, and impacted investors generally have 180 days after USCIS has provided them such notice to amend their petition to meet applicable eligibility requirements.

4.    Is it possible for an immigrant investor who has invested their capital for the requisite time period and created the requisite number of jobs prior to obtaining lawful permanent resident status to become a lawful permanent resident without conditions under INA 216A, effectively skipping the conditional residence period?

No. The RIA did not change the requirement under INA 216A that all EB-5 investors obtain lawful permanent resident status on a conditional basis subject to having those conditions removed by satisfying applicable requirements under INA 216A. All EB-5 investors who obtain conditional permanent resident status subject to INA 216A must file a Form I-829 within the 90-day period immediately before the second anniversary of their adjustment of status or their admission to the United States as a conditional permanent resident to remove their conditions.

Filed under EB-5 Law & Policy

Running ahead in the January 2024 Visa Bulletin

December 20, 2023 2 Comments

The January 2024 Visa Bulletin has holiday cheer for some EB-5 applicants, with final action date movement for Unreserved EB-5 to December 8, 2015 for China and to December 1, 2020 for India. I read this move as good news for all Chinese with pre-12/8/2015 priority dates, a lucky break or at least a nail-biting possibility for the 1,000 Indians with pre-12/2020 priority dates who fortuitously happen to be closest to visa interview/I-485 adjudication right now, and a blow to the 2,000+ Indians with pre-12/2020 priority dates who will watch others get visas while they remain mired in slow I-526 and visa processing.

I interpret visa bulletin movement against the background of I-526 filings by month, because that’s what VB dates represent: priority dates from people who started the process by filing I-526, and now signaled by filing date at the visa stage. When the VB moves final action dates from Date A to Date B to Date C, I count up the I-526 filed between those dates, look at visas issued and available, and think. (To assist everyone else in the same exercise, here’s my Excel with the needed data and example analysis.)

One could assume that a visa bulletin Final Action move from Date B to Date C means “Department of State must have finished issuing visas to priority dates between A and B, and must expect everyone  between B and C to get visas shortly.” With regard to the dates for filing, one assumption is “DOS must expect that the current filing date will become the final action date within a year.” To check those assumptions, I consult I-526 filing numbers. The interpretations are reasonable if expected visa applicants (I-526 principals less denials plus family) are plausibly consistent with recent visas issued and/or near-term visas available. If not, then we consider the alternate possible interpretation of visa bulletin movement: “A lot of people between Date A and Date C must be tied up in slow I-526 processing, and reaching the visa stage out of priority date order, with the result that some but not all priority dates up to C are documentarily qualified and may get visas shortly, while Date C will retrogress when the remaining applicants in those dates eventually become qualified. Meanwhile, the filing date must have been set to stimulate more qualified applicants but unlikely to become the final action date any time soon, considering how many applicants in the pipeline would qualify within the filing date movement.”

About 1,600 Indians filed I-526 between December 2018 and December 2020 (the India Visa Bulletin movement this year), and about 3,000 Chinese filed I-526 between October 1 and December 8, 2015 (the China VB movement). Adding assumptions about denial rates and family sizes, that could generate about 3,000 Indian visa applicants and at least 4,000 Chinese applicants. FY2024 has about 1,000 EB-5 unreserved visas available to India, and possibly up to 9,000 available to China. Against this background, it’s plausible that every Chinese with a pre-12/8/2015 priority date who still wants an EB-5 visa might possibly get one in FY2024. For India, evidently less than half of pre-12/1/2020 priority dates could possibly fit into this year’s visa availability, even if DOS had already cleared the backlog of pre-12/1/2018 Indian priority dates (which it can’t have done, considering the previous NVC waiting list and visa issuance, and dates on still-pending I-526). The difference between China and India is backlog location. Chinese with priority dates before 2016 are nearly all out of I-526 processing and thus on the visa bulletin radar, while many Indians with priority dates in 2019 and 2020 are still awaiting I-526 adjudication or not yet documentarily qualified (and thus not yet possible for the visa bulletin to consider).

If I’m an Indian with a November 2019 EB-5 priority date (one of the 745 Indians who filed I-526 in November 2019), how likely am I to get a visa this year? It depends on whether I happen to be already documentarily qualified at the visa stage now, and on I-526 processing volume and order for other Indians. Resorting again to a transit analogy, it’s like being passenger #20 on the standby list for a flight with 10 seats remaining to be allocated. If all 20 standby passengers were at the gate ready to board, I’d have no hope. But let’s say that only five passengers are at the gate, while the rest are caught up in traffic and security screening lines or decided to stay home or catch another flight.  The five already at the gate have a chance for seat assignment just because they’re on the spot, regardless of list priority – provided that not too many others on the list can eventually make it through security and come sprinting down the concourse in time to claim seats before the flight has to depart. There’s even some hope for the passenger #20 still currently stuck in security screening – if only he can count on unfair queue times advancing him while holding others back, such that only he and four other passengers will reach the gate in time for seat assignment. The situation can play out this way in EB-5, as low-volume and non-FIFO I-526 processing advances Indians to the visa stage in dribs and drabs, and out of priority date order, so that visa allocation can come joyfully earlier for some and sadly later for others than a FIFO calculation would anticipate. Meanwhile, the EB-5 context also has analogues to standby passengers who end up just staying home (giving up on immigration) or catching another flight (e.g. EB-1 or EB-2), thus relieving wait times for those who persist in trying to catch an EB-5 visa.

As further background and material for prediction, here is my estimate of the current size and location of the pipeline for unreserved EB-5 visas (assuming an average two visa applicants resulting from pending I-526, and guessing about country distribution of I-526 adjudicated since last year). I’ll be able to update the estimate once Department of State updates the NVC waiting list, and USCIS publishes more recent I-526 approval numbers.

Filed under EB-5 Statistics

Analyzing the demand/supply balance for rural and high unemployment set-aside visas

December 6, 2023 3 Comments

EB-5 is an investor visa program. The promise of visa eligibility is what attracts an EB-5 investment, and visas are subject to numerical limits. EB-5 has nothing to sell beyond those limits except empty promises, so we have strong reason to track pipeline visa demand and inventory.

Like promoters for a general admission stadium concert, regional centers and issuers should know the number of seats in the stadium (EB-5 visas available) and number of tickets already sold for each section (I-526 filed by visa category). EB-5 inventory tracking is stressful considering multiple parties offering tickets, small supply, enthusiastic demand that’s historically exceeded stadium capacity, and a government that resists disclosing the status of ticket sales. But we do our best, because self-interest depends on it. I don’t only care to avoid the fraud of investor visa offerings without visas. I want to assess potential market size and predict how long EB-5 business can last.

The best post-RIA EB-5 inventory intel to date is from an AIIA Freedom of Information Act request, which got data for I-526 and I-526E filings through April 2023, itemized by TEA category and investor country. I previously linked to AIIA’s article on the data, and the AIIA member webinar was published today on Youtube for anyone to watch.  I recommend the webinar for a good collection of data slides, and for discussion by a panel including yours truly, Halston Chavez (Galati Law), Joseph Barnett (WR Immigration) and Charles Oppenheim (formerly of the Visa Control Office at Department of State, now at WR Immigration). We talked about translating I-526 receipt numbers into visa demand calculations, and analyzed supply factors including how carryovers and country caps work. The webinar is a great chance to hear from experts who approached the topic from different angles and without trying to sell anything or feed a message, just aiming to empower listeners. Thanks to AIIA for organizing, and to Galati Law for helping to obtain the data from USCIS.

This post is another attempt at the tough task of simplifying/explaining a complex picture. Table 1 summarizes the FOIA data, and Table 2 offers a big-picture visa supply/demand comparison. The headline: pipeline demand for the high unemployment set-aside category was already entering backlog territory as of April 2023, the rural category had some demand but still well below foreseeable visa supply, and the infrastructure category remained untouched.

Table 1. Number of I-526 and I-526E filed April 1, 2022 to April 30, 2023, by TEA Category and Country of Chargeability (summarized from data in the USCIS response to FOIA request by AIIA)

CategoryChinaIndiaRest of WorldTotal% Total
Rural247577337724%
High Unemployment4291804811,09069%
Infrastructure––––0%
Not TEA2315751137%
Rural and High Unemployment2–350%
Total7012526321,585100%
% Total44%16%40%100%

Table 2. Estimated Pipeline Demand for High Unemployment and Rural Visas Compared with Supply

AB≈A*2CDE
Input Fact: Total HU I-526 filings up to 4/30/2023 (mostly filed 9/2022-4/2023)Estimated pipeline HU visa demand as of 4/30/2023 (if visa demand ≈ I-526*2.0 )Estimated allocation of HU Visa Supply by CountryApproximate HU Visa Supply in Carryover Year 1Approximate HU Visa Supply Without Carryover
Total1,0902,180Total2,0001,000
China429858Minimum 7%140+70+
India180360Minimum 7%140+70+
Rest of world481962Maximum 86%1,720860
Input Fact: Total Rural I-526 filings up to 4/30/2023 (mostly filed 9/2022-4/2023)Estimated pipeline rural visa demand as of 4/30/2023 (if visa demand ≈ I-526*2.0 )Estimated allocation of Rural Visa Supply by CountryApproximate Rural Visa Supply in Carryover Year 1Approximate Rural Visa Supply Without Carryover
Total377754Total4,000             2,000
China247494Minimum 7%280+                140+
India57114Minimum 7%280+                140+
Rest of world73146Maximum 86%3,440             1,720

Summary of conclusions from Table 2 estimates:

  • Table 2 is designed to facilitate big-picture/ballpark estimates of how close we were as of April 30, 2023 to maxing out visa availability in EB-5 set-aside categories. Column B gives a pipeline visa demand estimate calculated from I-526 filings, while Columns D and E show approximate annual visa supply.
  • When I look at Table 2, I first look at the totals in B and D. When Total D > Total B in a category, then we’re not looking at backlog risk for the first tranche of Chinese or Indian applicants in that category. If Total D < Total B, then I start looking down at country-specific supply/demand numbers and thinking about backlogs/wait times. Column D represents a year fattened with carryover visa supply; once the first tranche of applicants absorbs those visas, subsequent years (Column E) will have half the supply and even greater backlog risk.
  • The Rural category was looking good as of April 2023, with over 4 visas available in a carryover year and over 2 visas available in a normal year for every one applicant estimated to be in the pipeline at that time.
  • The High Unemployment category appears already approaching the danger zone as of April 2023, with total pipeline visa demand sufficient to exceed total annual supply even in a year with extra carryover visas. That level of demand would be twice available supply in a normal year, and place China and India far beyond their assured visa supply under country caps. Relatively high “rest of the world” demand represents a limit on the number of visas that could be left unused (i.e. available for China/India), and also a signal that even Rest of World could exceed visa availability and face wait times. I could see the existing high unemployment set-aside backlog risk being averted if I-526E denial rates prove very high (which could well happen if a few big projects get rejected), if a significant number of people who filed for the high unemployment set-aside are actually issued an unreserved visa (which could possibly happen as a result of multiple classifications on approvals), or if it turns out that demand for high unemployment set-aside investments tanked after April 2023. Absent widespread denials or diversions, however, the market for high unemployment set-asides (especially from Chinese and Indians) can’t afford to continue at the rate exhibited up to April 2023.
  • Table 2 gives a pipeline demand estimate as of April 30, 2023 based on about eight months of I-526 filings. To estimate where we are today, about eight months later, you could more or less double the figures in Column A and B — depending on whether you guess that demand for each category has been more or less brisk through the end of this year. The following are notes on the numbers and assumptions in Table 2, column by column, and examples of how to use Table 2 for calculation.

Column A: I-526 input

  • The input fact in Table 2 is total number of I-526 and I-526E filings for set-aside categories from when the set-aside categories become available in 2022 up through April 2023. USCIS reported the categories checked by petitioners on Form I-526 and I-526E. The classification assigned by USCIS on approval, which is what really matters for the visa, may vary.  (USCIS might not approve the requested TEA, or might choose to approve the I-526E in more than one visa category.)
  • The data AIIA received is monthly, and indicates an fairly even volume of receipts September 2022 to April 2023. If you guess similar volumes after April, then double the numbers in Column A to ballpark estimate totals as of today. Or if you sense that the investment/filing pace picked up or slowed down after April 2023, for rural and/or high unemployment categories, then adjust the multiplier accordingly to estimate total filings as of today. (AIIA has already filed an updated FOIA for more recent data, but pending response we have to guess.)

Column B: visa pipeline demand estimate

  • The pipeline visa demand estimate comes from estimating how many successful visa applications will result from I-526/I-526E filings by investors. This estimate considers the fact that not every petition/application will be approved, and that the investors counted on I-526 will later be joined by family members at the visa stage. I tend to multiply I-526 receipts by 2 for a rough estimate — for simplicity and assuming a 25% denial/attrition rate and average family size of 2.8. Those numbers are basically consistent with EB-5 history, but use a smaller or larger multiplier if you guess that future denial/attrition rates or actual average family size will be higher or lower.
  • I call the Column B estimate “pipeline” visa demand because these people are nearly all awaiting petition processing at USCIS, and thus not visa applicants yet. But they are in the pipeline queue. The high unemployment applicant with May 1, 2023 priority date could look at the total in Column B as the estimated size of the queue ahead. If people associated with priority dates up to April 30 will claim 2,180 visas, then the May 1 applicant would wait for the 2,181th high unemployment visa.  If another 2,000 high unemployment applicants have come in since April 30, then today’s high unemployment investor would expect to wait for over 4,000 other applicants to claim high unemployment visas in advance of him. (The reality is more complicated because country cap limits eventually trump priority date order, but this is the general idea.)

Column C: Visa supply allocation

  • So long as total supply for high unemployment visas exceeds total qualified demand, there’s no need for traffic control, and the visa bulletin and country caps don’t get involved. In a low-demand scenario, available visas simply get issued in priority date order to those ready to take them, regardless of country. In a year with fewer than 800 total applicants for over 4,000 total visas available, all applicants could expect a visa regardless of country of origin. On the other hand, if a year has 2,200 applicants vying for 2,000 visas, then the visa bulletin will activate to hold back 200 applicants. And the first applicants to be held back will be from countries exceeding the country cap.
  • Of the country-cap limited countries (named in every Visa Bulletin Section A.3, usually and currently “CHINA-mainland born, INDIA, MEXICO, and PHILIPPINES”), only China and India also have high EB-5 demand, which is why I itemize only those countries in Tables 1 and 2. Vietnam, South Korea, and Taiwan are other countries with relatively high EB-5 demand, but the visa bulletin does not apply country caps to them because their total demand across EB+FB categories is not excessive. (As a reminder for how country caps work within categories and to whom they apply, review Section A in any Visa Bulletin, the EB-4 Federal Register explanation, this handy slide visual from the AIIA webinar, and Charles Oppenheim’s explanation from the AIIA webinar. Vietnam is a marginal case because it has appeared on the visa bulletin A.3 list in the past, starting in 2018, but it hasn’t been listed since 2021. China and India, on the other hand, have consistently been excess demand countries on the visa bulletin list every year since 2005.)
  • When qualified visa demand exceeds supply, then people from country-cap-limited countries get limited to 7% of available visas plus whatever is left after rest-of-world demand. 7% is not a ceiling for China or India – it’s a baseline that can be increased to the extent that visa demand outside those two countries takes less than 86% of category supply that year. For example, what if the estimated high unemployment applicants in Table 2 Column B (2,180 total, 858 Chinese, 360 Indians, 962 Rest of World), were all qualified together in a year with 2,000 visa available. How many visas would be issued to Chinese that year? My best guess would be about 730, calculated as 140 (7% of supply) plus a share the difference between 1,700 ROW visas available and 962 ROW visas demanded.  Chinese and Indian applicants should pay attention to the Rest of World demand number even more than the 7% supply number, because ROW demand is what ultimately constrains the visa availability for China/India.  
  • Can countries unlimited by the 7% country cap still potentially run short on visas? Yes, as evidenced by the visa bulletin, which currently has cut-off dates for everyone in EB-2, 3, and 4. EB-5 historically avoided this risk, because EB-5 demand used to be so concentrated in China and visa availability wasn’t so fragmented. But today, with about 40% of EB-5 demand coming from “rest of the world,” and supply numbers within each set-aside category relatively small, “rest of the world” also finds itself on the backlog radar. For example, what if pipeline high unemployment visa demand has reached 2,000 by now, and what if all those applicants reach the visa stage in FY2025? In a year with 2,000 ROW applicants for at most about 1,700 visas available to ROW (2,000 minus 7% each to China and India), the visa bulletin would have to use dates to hold back the 300 excess ROW applicants until the next year’s new supply can accommodate them.

Column D and E:

  • TabIe 2 uses supply numbers rounded to the thousand to facilitate eyeball estimates. For detail of how annual supply gets calculated, with nuances from falling post-COVID EB limits and carryover as a function of usage, see Table 3 below. Considering processing times, I expect that we won’t see pipeline demand for EB-5 set-asides reaching the visa stage in a big way until FY2025. So I’m assuming few set-aside visas issued in FY2024 and thus maximum carryover numbers in FY2025. But I would love to see many set-aside visas issued this year, taking advantage of an unusually high limit and reducing pressure on future supply.

Table 3: EB-5 Visa Supply Detail

EB Annual VisasEB-5 Annual (7.1% EB)Rural Annual (20% EB-5)Rural Carryover UnusedRural Total Annual Visas AvailableRural Visas Used
2022281,50719,9873,9973,9970
2023197,09113,9932,7993,9976,7960
2024161,00011,4312,2862,7995,085<2,799
2025140,0009,9401,9882,2864,274?
2026140,0009,9401,988?1,988?
EB Annual VisasEB-5 Annual (7.1% EB)High Unemployment Annual (10% EB-5)HU Carryover UnusedHigh Unemployment Total Annual VisasHU Visas Used
2022281,50719,9871,9991,9990
2023197,09113,9931,3991,9993,3980
2024161,00011,4311,1431,3992,542<1,399?
2025140,0009,9409941,1432,137?
2026140,0009,940994?994?

Filed under EB-5 Statistics

Demand for EB-5 Set-aside Categories

November 13, 2023 2 Comments

Thanks to persistence by AIIA and litigation by Galati Law, we finally have a first installment of data to discuss relative to demand for the new EB-5 set-aside categories. USCIS responded to AIIA’s Freedom of Information Act request, and reported I-526 and I-526E receipts by month from April 2022 to April 2023, itemized by category (including rural and high unemployment) and by petitioner country (including China and India). See AIIA FOIA Series: I-526E Inventory Data for Backlog Assessment for a summary of this extremely consequential information. The article includes an invitation to a webinar on November 15, 2023 at 6:00 PM ET, where I’ll join AIIA, Galati Law, Joseph Barnett, and Charles Oppenheim to discuss the data and implications for reserve visa availability.

Filed under EB-5 Statistics

I-956F EB-5 Business Plan Objectives and Best Practices

November 8, 2023 Leave a comment

Every year since 2016, industry colleagues have honored me with their vote as one of the Top 5 Business Plan writers in the EB5 Investors Magazine poll. I appreciate the votes of confidence through the years and especially now, as the work of a business plan writer feels particularly challenging.

I spoke recently with an entrepreneur who is a business planning veteran in his own right, with decades of experience as a founder and executive. He already has a beautiful pitch deck for venture capital investment, and asked “what more do I need for EB-5?” and “where can I go to read about the requirements and what works for a business plan in the EB-5 space?” We had a long conversation, because much of what an entrepreneur practically needs to know about EB-5 isn’t written down anywhere. I usually blog about industry developments rather than my day job, but conversations like this remind me of the need to also write about business plans.

The major context for an EB-5 business plan today is the Form I-956F Application for Approval of Investment in a Commercial Enterprise, which requires “a comprehensive business plan for a specific capital investment project.” The USCIS Policy Manual Chapter 5(B) specifies that “A project application must include a credible and comprehensive business plan that contains, at a minimum, a description of the business, its products or services (or both), and its objectives.” Policy Manual Chapter 2(B) further defines a comprehensive business plan based on the precedent decision Matter of Ho.

The official USCIS guidance provides, at least, a partial content checklist for an EB-5 business plan. But a good EB-5 plan needs more than an appropriate table of contents. Strategy requires thinking about what the document needs to accomplish, and organizing content and presentation around those objectives.

I-956F EB-5 Business Plan Objectives and Best Practices

Objective 1: To describe a business proposal that works for EB-5.

Business plan best practice: Before putting pen to paper, discuss the business proposal with respect to the key EB-5 requirements for investment of capital, new commercial enterprise, job creation, targeted employment areas, and regional center sponsorship. The most beautiful presentation cannot salvage a plan to do something that EB-5 can’t do. The AAO record of EB-5 denials is littered with plans describing a debt arrangement with the NCE, direct job creation by an affiliate or third-party management company, and job creation by acquisition, for example – all valid plans from a business perspective but not a fit with technical EB-5 requirements. An informed and honest business plan writer knows the EB-5 requirements and their practical application, can identify potential challenges and dealbreaker issues upfront for a specific proposal, and will not write up a plan with no chance of EB-5 success.

Objective 2: To provide a document that is appropriate for filing with the Form I-956F, to support project approval by USCIS.

Business plan best practices: Know the USCIS I-956F adjudication checklist, and organize the EB-5 plan document with summaries and content headings to flag content responsive to that checklist. (The checklist is partially based on Matter of Ho, as expanded with items disclosed in Requests for Evidence.) Know the evidence expectations baked into the Matter of Ho standard, and help to organize third-party evidence in support of the business plan. Write and format the business plan for how it will be read: printed out on letter-size paper in the hands of a civil servant who is pressed for time and easily confused, not required to have any business or financial background, not able to easily request clarification, and predisposed to disbelieve the plan except as validated by independent evidence that he can verify in exhibits and on the Internet. And consider the timing context. I used to write I-526 plans with an eye on the likelihood that they would be read by USCIS at least two years in the future. Today, I write I-956F plans with an eye on the probability of review within a year.

Objective 3: To avoid content that could cause the I-956F project application to be denied by USCIS.

Business plan best practice: Work carefully to avoid discrepancies, the most common document problem behind EB-5 denials.  The EB-5 plan should ideally avoid internal discrepancies, discrepancies with other parts of the application including economic impact report and offering documents, mismatch with EB-5 requirements, and mismatch with how things will eventually turn out.  Business plans in the wild are dynamic, and it takes care and discipline to freeze a moment-in-time picture that’s consistent throughout application documents. An important part of my process is to seek out apparent discrepancies and preemptively iron them out before USCIS has a chance to seize on them as faults casting doubt on the credibility of the entire package. This is also a reason for the “lucid” in Lucid Professional Writing, because one method for avoiding discrepancies is to minimize repetition.

Objective 4: To lay a roadmap that will be feasible to follow.

Business plan best practices: Present the most conservative feasible scenario when it comes to schedule, budget, and financial projections. Strategize about areas in which the business plan is most liable to change, and bake flexibility where possible into those aspects of the business plan presentation (avoiding unnecessary detail and mentioning caveats and alternatives). Think about the evidence that will need to be provided in support of projections, and shape the plan as needed to support the evidence that will be practically possible.  The EB-5 plan should ideally set the client up to over-deliver on promises, avoid the need to file expensive amendments, avoid fatal material change, and avoid impossible evidence requests.

Objective 5: To tell a coherent story that fits the EB-5 plot and will be compelling to EB-5 investors and USCIS.

Business plan best practices: Know the story that an EB-5 plan needs to tell – a story about EB-5 capital deployed to create jobs and support an immigration opportunity. Understanding the EB-5 plot, tell that story with bright lights around the answers that EB-5 investors and USCIS need to find about use of investment, basis of job creation, and how the proposal lines up with immigration considerations. EB-5 investors and USCIS adjudicators approach documents with very different questions than are in the mind of a venture capital investor or institutional lender. A good EB-5 plan differs from a pitch deck or SBA plan for the same proposal because it is responsive and relevant to EB-5-specific questions and considerations.

Are good EB-5 plans worth the effort and investment?

The EB-5 space is full of sloppy business plans – 80-page cut-and-paste collages of undigested content that don’t bother to tell a clear or relevant story, but still succeed when the reader just accepts the plan because that’s easier than reading it. The snow job strategy is particularly advisable for a proposal with questionable EB-5 fit, because it’s difficult to question a mountain of disorganized information. And an EB-5 plan can coast on a nice cover so long as investors aren’t necessarily given the chance and USCIS adjudicators don’t always take the time to open and read the plan. But I still believe in the value of a tight, well-drafted EB-5 plan. Good projects deserve professional documents – for the sake of first impressions on the front end and protection on the back end. No one wants to wait for a nasty RFE or litigation to find out that the business plan, now suddenly Exhibit A, is unintentionally full of sloppy errors, omissions, and misrepresentations. And attractive, relevant documents can play an important role in supporting investment decisions and immigration approvals.

Future articles will discuss the EB-5 business plan content section by section, and FAQ on what works from a practical business perspective. I should also replicate these articles for E-2 and L-1, visa categories with their own particular considerations for the business plan.

Filed under EB-5 Resources

FY2024 Set-Aside Visa Availability Update

November 2, 2023 3 Comments

As an update to previous posts, I note additional pieces of information that have become available about forthcoming EB-5 visa availability in the set-aside/reserve categories.

FY2024 Quota: Department of State has published the Annual Numerical Limits for Fiscal Year 2024, indicating that the Employment-Based visa limit for the year is 161,000 – a bit lower than USCIS had estimated last month, but still well above the base allocation of 140,000. This means another unusually high number of new visas allocated to EB-5 this year, in addition to carryover of unused reserved visas.

Reserve Visa Carryover: At the Department of State/AILA Liaison Committee Meeting October 5, 2023 AILA asked “in FY2024, will DOS first use up reserved visas carried over from FY2023, and only once such numbers are exhausted, use the numbers made available under the FY2024 annual reserved limit?” DOS answered “Yes… the set-aside visas from FY2023 will be added to the same set-aside categories for FY2024 and will be used before the regularly allocated set-aside numbers.” This decision is significant because it maximizes the potential number of reserved visas year-to-year. A new FY24 rural visa can be carried over as FY25 rural visa if unused; the carryover FY24 rural visa must be used this year or else be lost to the category, becoming a FY25 unreserved visa. And so DOS is choosing to allocate carryovers first. (There’s unfortunately no mechanism for unused unreserved visas to carry over to another year, regardless of if they originated from reserve visas carryover, as DOS also confirmed in the AILA Q&A. But I have some hope that consulates and USCIS will work overtime to issue the 14,000+ unreserved EB-5 visas available this year, considering that all available unreserved EB-5 visas were issued in FY2023.)

Reserve Visa Issuance: Department of State also engaged with the IIUSA Leadership Circle in October, and provided additional insights in a report available to IIUSA members. I was particularly interested to hear the confirmation that DOS did not use any reserved EB-5 numbers in FY2023, but does anticipate issuing reserved visas by late FY2024 (considering that USCIS has started to approve I-526E petitions in recent months).

Reserve Visa Availability: Combining the above sources, the following table shows how I now expect EB-5 rural and high unemployment visa availability to look going forward. FY2024 carryover is known, and I expect another full carryover in FY2025. This is based on the assumption that, regardless of how many people have filed I-526E by now, processing constraints mean that USCIS/DOS can’t manage to get over 2,800 rural applicants and/or over 1,400 high unemployment applicants qualified plus interviewed by September 2024 (as would be necessary to exhaust this year’s carryover visas and start touching new visas). The reserve carryover train will continue until the number of category visas possible to issue in a year (thanks to sufficient qualified applicants ready at the visa stage that year) meet or exceed visas available that year. But note that reserved visa availability is not exactly cumulative; if the reserved visas available in a year aren’t issued, only a portion (the new, not the carryover) can remain available for use in the same category in the next year.

EB Annual VisasEB-5 Annual (7.1% EB)Rural Annual (20% EB-5)Rural Carryover from previous yearTotal Annual Visas Available to RuralNumber of Rural Visas Issued
AB=A*.07C=B*.20 (Rural) or B*.10 (HU)DE=C+DF<E if low demand/slow process
2022281,50719,9873,9973,9970
2023197,09113,9932,7993,9976,7960
2024161,00011,4312,2862,7995,085Estimate <2,799 (assuming low demand/slow process)
2025140,000+9,940+1,988+2,286 (assuming not used in FY24)4,274+? (depends on demand and approval timing)
2026140,000+9,940+1,988+? (up to 1,988+)1,988 + any carryover 
EB Annual VisasEB-5 Annual (7.1% EB)High Unemployment Annual (10% EB-5)HU CarryoverTotal Annual Visas Available to HU Number of HU Visas Issued
2022281,50719,9871,9991,9990
2023197,09113,9931,3991,9993,3980
2024161,00011,4311,1431,3992,542Estimate <1,399 (assuming slow process)
2025140,000+9,9409941,143 (assuming not used in FY24)2,137? (depends on demand and approval timing)
2026140,000+9,9409940 if all 2025 visas used, or up to 994994 + any carryover 

When will visa-stage rural and high unemployment applicants first exceed the visa availability outlined above, thus triggering the visa bulletin and country cap limits? This is where we try to estimate:

  • how many investors need to file I-526E to end up with about 4,000 rural visa applicants or 2,000 high unemployment visa applicants (I’d divide visa applicants by about 2, based on guesses about family sizes and approval rates)
  • how long will USCIS take to stock the visa stage by approving over 1,500 rural or over 750 high unemployment I-526E (considering a historical average around 36% of principal applicants in EB-5 visas issued), and
  • how many rural and high unemployment investors can manage to get visas with their families in FY2024, thus reducing demand pressure against the visa supply available in FY2025 and beyond.

Reserve Visa Demand:  So how much demand has accumulated for the new EB-5 reserved visas — and why is this such a hard question to get answered? In Monday’s CIS Ombudsman EB-5 engagement, IPO Chief Alissa Emmel explained why USCIS considers it difficult to share usable data.

Quoted from Minute 50-52 of The CIS Ombudsman’s Webinar Series: Engagement with USCIS on the EB-5 Immigrant Investor Program
Gary Merson, CIS Ombudsman Chief of Staff
Changing topics slightly. We’re hearing from stakeholders who would like to see the agency publish more data on the pending inventory of petitions so that would be investors have a better sense of the visa queues for infrastructure, rural and high employment projects. Can you give us a sense of the challenges in doing so and what options USCIS may be considering to address this issue?

Alissa Emmel, IPO Chief
Sure. I appreciate stakeholder requests for more data, and as an economist and somebody who values data driven decisions, I understand the value that a report on the pending inventory form I-526 and I-526E petitions broken down by visa category could provide to investors. IPO is actively involved in discussions with offices across USCIS to determine how best to present EB-5 data. USCIS strives to make as much data about various aspects of our operations available to the public as possible. We do so to increase transparency and improve public understanding of the immigration system and our role in it. Currently, USCS is working through how best to report Form I-526 and I-526E information, as there are several variables that may impact overall accuracy and therefore the usefulness of such a report. Similar to the rest of the agency, information provided on our paper forms are reported by the applicant, petitioner or requester, or the representative or preparer, so there may be errors on the forms when USCIS receives them. For example, a petitioner may erroneously select the wrong class, preference, or benefit type they are requesting. However unique to the EB-5 program, petitioners may file a form I-526E petition before their associated form I-956F is approved.  As such, at the time of filing the I-526E, the petitioner may not know which visa categories their project may be approved for. Further, some petitioners may be eligible for multiple visa categories, including unreserved visas. These factors are some of the nuances with developing a report prior to the final adjudication of the form I-526 and I-526Es. In addition, it’s important to note that while USCIS always strives to ensure that the data in our electronic systems is accurate, data errors do occur because we transfer data from paper forms to electronic systems manually. I hope it’s helpful to understand some of the considerations that the agency is taking into account while we look at how to best provide information that would be useful for our stakeholders.

As we try to get a handle on EB-5 demand by interpreting I-526E reports from USCIS quarterly reports (available through June 2023 so far) and FOIA requests (coming soon), or by attempting an educated guess from what we see in the market, let’s keep these nuances in mind. We cannot predict exactly how many applicants will eventually reach the end of the visa process and when, even if USCIS would be transparent about the distribution of petitioners starting the process. But I still encourage USCIS to promptly share the TEA investment categories self-reported on I-526E filings. Let the public interpret and discuss that limited data point while adding their own assumptions about human error, denial rates, processing times.

Filed under EB-5 Statistics

CIS Ombudsman EB-5 Engagement (Oct. 30)

October 29, 2023 1 Comment

In more good news for future EB-5 process improvements, the CIS Ombudsman has focused attention on the EB-5 program. The CIS Ombudsman’s mission is to “assist individuals and employers in resolving problems experienced when seeking immigration benefits from USCIS; identify trends and areas in which individuals and employers have problems dealing with USCIS; and recommend changes in USCIS’ administrative practices to mitigate problems and enhance processes.” Having recently met with IIUSA, AILA, and AIIA about EB-5, the CIS Ombudsman now invites all EB-5 stakeholders to The CIS Ombudsman’s Webinar Series: Engagement with USCIS on the EB-5 Immigrant Investor Program on Monday, October 30, 2023, from 2 to 3 p.m. Eastern Time.

UPDATE: Here is my recording of the CIS Ombusdman webinar, featuring Ombudsman Chief of Staff Gary Merson asking questions of IPO Chief Alissa Emmel. The discussion covered treatment of pre-RIA investors following regional center termination, policy for the investment sustainment period, and a variety of questions and filing tips. The discussion seemed to show that Mr. Merson had listened intelligently to stakeholder concerns, and that Ms. Emmel was making good faith attempt to engage with and not just deflect the questions. The Ombudsman will be publishing remarks and Q&A from the call, and I’ll link those documents here as soon as I see them.

Filed under EB-5 Law & Policy

Complete USCIS Policy Manual EB-5 Update

October 26, 2023 5 Comments

On October 26, 2023, the USCIS Policy Manual EB-5 section (Volume 6 Part G) received its first complete update since the EB-5 Reform and Integrity Act of 2022 (RIA) was enacted 18 months ago. I have been waiting eagerly for RIA changes to be translated into policy, or at least discussed in one place for ease of reference, and welcome the policy manual update.

Until yesterday, the Policy Manual featured a mix of current content (Chapters 1-2, updated in October 2022), and outdated content (Chapters 3-6, not revised since July 2021, before the law change). As of today, the entire USCIS Policy Manual EB-5 section has been brought up to date, with three chapters significantly revised, two all-new chapters added, and one chapter deleted.

Here’s my summary of the changes, together with links to document comparisons that redline differences between the October 26, 2023 version and the previous October 2022/July 2021 versions. (I typically do a document comparison of the whole volume, but compared individual sections in this case because USCIS reorganized the chapters. For reference, here is the folder I keep of all Policy Manual iterations.)

Summary of the October 26, 2023 update to the USCIS Policy Manual Vol. 6 Part G

Chapter 1 Purpose and Background and Chapter 2 Eligibility Requirements

  • These chapters were previously updated on October 7, 2022 in response to RIA, and the October 26, 2023 version is nearly unchanged. (Here for reference is my Chapter 1-2 redline, showing the minor tweaks between the 10/2022 and 10/2023 versions.)

Chapter 3: Immigrant Petition Adjudication

Chapter 4: Regional Center Applications

  • This new chapter has extensive revisions to the previous Chapter 3 on Regional Center Designation. See my redline of changes.

Chapter 5: Project Applications

  • The Project Applications chapter is all-new to the Policy Manual, and covers eligibility, documents and evidence, adjudication, and amendments to I-956F Applications for Approval of an Investment in a Commercial Enterprise. The content has some overlap with Chapter 2 on Eligibility Requirements.

Chapter 6: Direct and Third Party Promoters

  • The Promoters chapter is all-new to the Policy Manual, and rehearses I-956K requirements. (The previous Chapter 6, on the topic of deference, has been deleted from the Policy Manual, but much of its content folded into the I-526 chapter.)

Chapter 7: Removal of Conditions

  • This new chapter has minor revisions to the previous Chapter 5 on I-829 adjudication. See my redline of changes.

I haven’t had time yet to read everything in detail, but I expect to be surprised less by what is there (more quoting the law and forms than interpreting the law, at first glance) than by what isn’t there (which will take some time and thought to identify).

Filed under EB-5 Law & Policy

Top things I learned from the October 11, 2023 EB-5 Questions and Answers from USCIS

October 12, 2023 Leave a comment

Since the EB-5 Reform and Integrity Act of 2022 (RIA) was enacted, stakeholders have had urgent open questions about the status and treatment of pre-RIA investors and regional centers, and about how to interpret RIA provisions related to the investment period and redeployment.

In the April 25, 2023 EB-5 stakeholder engagement, IPO Chief Alyssa Emmel said: “While we’re unable to discuss the regional center operations and investment period topics today, please rest assured that USCIS is engaged in ongoing efforts at the immigrant investor program office and across the agency to ensure that when we do have updates, we’re equipped to provide the EB-5 stakeholder community with clear guidance.” Now we have a substantial first installment of that promised guidance, with the EB-5 Questions and Answers (updated Oct. 2023), published on the USCIS website on October 11, 2023.

I appreciate that this Q&A engages with stakeholder questions, and dares to provide some interpretation. I can tell that whoever wrote the Q&A read the feedback on regional center operations and investment period sent to USCIS in advance of that April meeting, including from IIUSA and AIIA. And the Q&A sticks its head out to provide specific some guidance, not only giving safe cop-out responses that rephrase what we already know – a brave move, considering that any new interpretation is going to displease someone and probably inspire litigation.

I also appreciate the spirit of the Q&A, which expresses an intent to protect both regional centers and investors from adverse retroactive impacts from the new law. To my welcome surprise, the Q&A seems to be trying to say “we care, and here’s our best effort to be clear, generous, and fair and to avoid harming anyone.” Or to give an actual quote from the Q&A: “After a consideration of reliance interests and potential retroactive impacts, we believe the interpretations and guidance explained above provide flexibility and lessen the burdens on EB-5 entities.” It’s important to account for that spirit and expressed intent as we respond to any interpretations that we find to be unclear, ungenerous, unfair, retroactive, or burdensome in fact.

Here are my top takeaways the Q&A.

  1. Grandfathering: The Q&A suggests that USCIS broadly interprets the investor grandfathering provision in RIA Section 105(c), such that it not only protects future investors from expiring legislation (the literal language of the law), but also protects pre-RIA investors from retroactive impacts of RIA. (The Q&A interprets this to be the spirit of the law with reference to Senator Grassley’s quote: “the bill allows petitions filed by immigrant investors under the old pilot program to continue to be adjudicated under the law as it existed when they were filed.”) I am not sure how far this will apply in practice, but delighted to see the intent by USCIS to be generous and fair with grandfathering for pre-RIA investors.
  2. Good faith investors: USCIS interprets the RIA provision for “treatment of good faith investors following program noncompliance” (INA 203(b)(5)(M)) to apply to pre-RIA investors. This surprises me, and I’m trying to think whether it’s good news.  For investors with regional center or project problems, pre-RIA policy had the disadvantage of no change options for pre-green card investors, but the advantage of protections and flexibility during Conditional Permanent Residence. Subsection M offers change options, but they’re fraught, and subsection M presupposes no protection from CPR status. More analysis to come once I’ve had more chance to consider and discuss this. (See also Robert Divine’s analysis.) One major concession that USCIS already makes in the Q&A, in attempt to make the subsection M recourse more usable, is to change the deadline for investor action following a regional center termination or NCE debarment.
  3. Regional Center Termination Impact: The Q&A expresses USCIS intent to mark out a path to eligibility for pre-RIA investors in terminated regional centers, which is good news for regional centers. In my previous post on the Integrity Fee and I-956G, I concluded that regional centers would be forced into expensive compliance just for the sake of protecting past investors, regardless of their own EB-5 activity or plans. If USCIS does offer investors a viable option to support eligibility apart from regional center sponsorship, then otherwise inactive regional centers face much less pressure. (I say “if,” because so far I’m more sure of the USCIS intent than the practical outcome. But I’m cautiously optimistic.)
  4. Regional Center Termination Likelihood: USCIS expects that “there is a large volume of investors that could be affected by terminations of previously designated regional centers based solely on noncompliance with certain new administrative requirements added by the RIA” considering that “Before March 15, 2022, there were 632 regional centers and as of June 30, 2023, we have received only 357 Form I-956, Application for Regional Center Designation, applications or amendments for previously designated regional centers, and only 250 of previously designated regional centers have paid the Integrity Fund Fee.” So, again, it’s good to hear that “We interpret the RIA in a manner we hope permits good faith investors of terminated regional centers to retain their eligibility.” (Also, I note that USCIS has yet to officially say whether filing I-956 is an administrative requirement for a regional center that wishes to avoid termination.)
  5. Status of Previously-Approved Regional Centers: USCIS states a position that the new RIA provisions and requirements apply equally to all regional centers, regardless of whether the regional center was designated before or after RIA, and regardless of whether the regional center intends to promote new projects for new investors under RIA. This has been the subject much litigation over the past year.
  6. Investment Period: USCIS confirms its interpretation that RIA does change the minimum investment period for post-RIA investors. Instead of being required to sustain their investment throughout the period of conditional permanent residence (the pre-RIA law), investors who filed I-526 or I-526E post-RIA are expected to maintain investment at least two years from the time that investment was made available to the job-creating entity (plus at least until I-526 filing, and at least until the job creation requirement is satisfied). I would’ve expected USCIS to also say that the investment at least needs to be sustained until the I-526 is adjudicated, but no – USCIS agrees that post-RIA investors could theoretically have return of capital even before I-526 approval so long as they met the two-year investment and job creation requirements. As before, the USCIS-required investment period is only a minimum – the Q&A reminds us that USCIS does not control the maximum time that EB-5 investment can be held. Post-RIA investors are also still subject to the redeployment requirement — but decoupling the investment period from unpredictably-long immigration times almost eliminates redeployment risk. The investment period change will have a seismic effect on the industry, and will no doubt be targeted by litigation. (Again, see Robert Divine’s analysis.)
  7. Redeployment: The Q&A focuses on RIA interpretation and does not address other longstanding questions around redeployment for pre-RIA investors, such as whether the “at risk” requirement actually justifies/forces serial investments decoupled from any job creation requirement. The Q&A does convey some sympathy when it recognizes “the burden on the investor to keep their investment in place for an extended period, due to circumstances beyond the investor’s or the NCE’s control, such as visa backlogs or other such circumstances.” The redeployment conversation will continue, drawn by the established reliance by regional centers on redeployment policy and the rebellion by investors against that policy.
  8. Practical questions: The Q&A answers some technical questions and provides filing tips for a number of EB-5 forms. (Robert Divine’s analysis also covers this nicely.)

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USCIS posts Q&A addressing many EB-5 questions

October 11, 2023 10 Comments

Today USCIS published a page of EB-5 Questions and Answers (updated Oct. 2023), with the most extensive guidance to date on USCIS interpretation of the EB-5 Reform and Integrity Act. For historical reference, here are images as the Q&A posted on October 11, 2023, in case the content is subsequently challenged and revised.

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USCIS Provides Additional Guidance (sustainment, termination)

October 11, 2023 1 Comment

UPDATE: This post now copies the version of the USCIS email sent out at 11:30, which seems to be a correction to the email sent at 10:45. This content is also now posted in the USCIS Newsroom.

From: U.S. Citizenship and Immigration Services <uscis@public.govdelivery.com>
Sent: Wednesday, October 11, 2023 11:39 AM
Subject: USCIS Guidance: EB-5 Reform and Integrity Act of 2022

USCIS Guidance: EB-5 Reform and Integrity Act of 2022

On Oct. 11, we issued additional guidance on our interpretation of changes to the EB-5 Immigrant Investor Program in the Immigration and Nationality Act (INA) made by the EB-5 Reform and Integrity Act of 2022 (RIA).

This guidance clarifies the required investment timeframe for EB-5 investors who file Form I-526, Immigrant Petition by Standalone Investor, or Form I-526E, Immigrant Petition by Regional Center Investor, on or after enactment of the RIA (March 15, 2022), as outlined in the RIA. This guidance also clarifies our interpretation of INA 203(b)(5)(M), regarding investors who are associated with a terminated regional center.

Background
On March 15, 2022, President Biden signed the RIA as part of the Consolidated Appropriations Act. Among other things, the RIA modified the required investment timeframes for investors who file petitions for classification Form I-526, Immigrant Petition by Standalone Investor, or Form I-526E, Immigrant Petition by Regional Center Investor, after enactment and to subsequently remove the conditions on their lawful permanent resident status. The RIA also added other provisions to the INA permitting good faith investors to maintain eligibility in the event their regional center is terminated.

For investors seeking to remove conditions on their permanent resident status under INA 216A based on an EB-5 immigrant visa petition filed on or after enactment of the RIA (post-RIA investors), the RIA removed the requirement that the investor must sustain their investment throughout their conditional residence.

The RIA also modified INA 203(b)(5)(A)(i) (the general requirement for classification to invest or be actively in the process of investing the requisite amount of capital in a new commercial enterprise) by adding new language that the investment required by INA 203(b)(5)(A)(i) must be expected to remain invested for at least two years.

Key Points
Because these changes made by the RIA, investors filing petitions for classification after enactment of the RIA no longer need to sustain their investment throughout their conditional residence, which may be many years in the future and dependent on factors outside the investor’s control, such as visa availability.

Instead, the INA now requires only that the investment must be expected to remain invested for at least two years, provided job creation requirements have been met. Although the statute does not explicitly specify when the two-year period under INA 203(b)(5)(A)(i) begins, we interpret the start date as the date the requisite amount of qualifying investment is made and believe this interpretation is consistent with the statutory language. In other words, we will use the date the investment was contributed to the new commercial enterprise and placed at risk in accordance with applicable requirements, including being made available to the job-creating entity. If invested more than two years before filing the I-526 or I-526E petition, the investment should still remain at the time the I-526 or I-526E is properly filed so we can appropriately evaluate eligibility.

Before enactment of the RIA, the termination of a regional center would have been considered a material change to eligibility for investors who had not yet obtained conditional permanent resident status and, consequently, would likely have resulted in denial or revocation of associated investor petitions. The RIA added a new provision at INA 203(b)(5)(M) that permits good faith investors associated with terminated regional centers to retain eligibility in certain circumstances. Because the statute does not explicitly specify whether it applies only to post-RIA investors or also to pre-RIA investors, we are providing guidance on how we interpret this new provision for pre-RIA investors upon regional center termination:

  • We interpret INA 203(b)(5)(M) to apply to pre-RIA investors associated with a terminated regional center (or debarred new commercial enterprise or job-creating entity). However, rather than strictly applying the notification timeframes at INA 203(b)(5)(M)(ii) and (iii)(I), we will extend the deadline for pre-RIA investors to respond to a regional center termination notification until the agency adjudicates their Form I-526 petition. If needed, we may issue a Request for Evidence or Notice of Intent to Deny for the investor to establish continued eligibility.
  • We may use the procedural flexibilities provided under INA 203(b)(5)(M) to extend the response deadline of 180 days for notices of continued eligibility. The extension will decrease the likelihood of operational burdens and expand the intent of the statute to permit good faith investors of terminated regional centers to retain their eligibility.
  • When a regional center is terminated for purely administrative noncompliance, we may determine that the termination would generally not adversely affect a pre-RIA investor’s basic eligibility under INA 203(b)(5) (including the ability to continue to claim indirect jobs), because their investment and resulting job creation would likely remain undisturbed.
  • We may choose not to extend applicable response deadlines when a regional center is terminated for substantive reasons that may affect continued eligibility of their associated investors.

More Information
For more information on the EB-5 Immigrant Investor Program or USCIS, please visit uscis.gov or follow us on Twitter, Instagram, YouTube, Facebook, and LinkedIn.

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Integrity Fees and I-956G Annual Report in 2023 (Who really has to file, and why)

October 6, 2023 4 Comments

10/11/2023 UPDATE: USCIS has now published a Q&A that discusses the impact on investors of regional center termination, beginning with the statement that “Given the large volume of investors that could be affected by terminations of previously designated regional centers based solely on noncompliance with certain new administrative requirements added by the RIA, such as paying the annual Integrity Fund fee, we interpret the RIA in a manner we hope permits good faith investors of terminated regional centers to retain their eligibility.” Please refer to the USCIS Q&A before reading my post, which I will need to revise as time permits.

[ORIGINAL POST]

Since the EB-5 Reform and Integrity Act (RIA) passed in March 2022, there’s been some confusion and dispute about how RIA applies to regional centers and EB-5 investments that pre-date RIA. After all, RIA creates new rules and procedures primarily for capital raising activities. How do these reasonably apply to regional centers with no post-RIA capital raising activities? Do regional centers that were designated and investments made pre-RIA get any different treatment post-RIA?

After a year and half of conflicting notices on the USCIS website, industry comments, litigation, and other bits and pieces of guidance (more on that below), one point has become clear: USCIS expects every regional center without distinction to pay the annual Integrity Fee of $10,000 or $20,000 and to file the I-956G Annual Report. In 2023, every regional center must pay two years of Integrity Fees (for both FY2023 and FY2024) and also file I-956G, or else be terminated in 2024.

If a regional center has no post-RIA project plans anyway, why jump these expensive hoops and why care about termination? But the regional center’s past investors must care. An EB-5 investor’s continued eligibility depends on having a regional center sponsor in good standing throughout the investor’s EB-5 process, however long that process may take. According to INA 203(b)(5)(M), a regional center termination will be followed by denials, revocations, and conditional permanent residence status terminations for all of the regional center’s past investors, unless the investors can manage to affiliate with another regional center. (Separate article coming shortly on this topic.) [UPDATE: the 10/11 USCIS Q&A contradicts this point.]

Here are the instructions, followed by the background of ambiguities and arguments around these requirements.

  • Regional Center Integrity Fee: The latest USCIS “Alert” on Integrity Fee payments, published on September 29, 2023, can be found here: https://www.uscis.gov/IntegrityFund. The Alert acknowledges that “information about the due dates and penalties might not have been clear” but gives another chance for payment with the bold-face warning that “we will take steps to terminate any regional center that, on or before Dec. 30, 2023, has not paid the required EB-5 Integrity Fund fees for FY 2023 and FY 2024. NOTE: We will reject Integrity Fund fee payments for FY 2023 and FY 2024 we receive after Dec. 30, 2023, including those made in response to a Notice of Intent to Terminate.” (To avoid the FY2024 late fee, pay before October 31, 2023.) 
  • Regional Center Annual Report: The latest I-956G annual report form, dated as of July 2023, can be found here https://www.uscis.gov/i-956g. Unlike the initial I-956G edition of July 2022, which asked for reporting specific to post-RIA NCEs (I-956F), the current form explicitly covers pre-RIA activity and NCEs. It asks the regional center to report on “each capital investment project undertaken by such NCE with active EB-5 investors (i.e. those who are seeking classification under INA 203(b)(5) or who have obtained conditional permanent resident status and not yet filed for removal of conditions),” and to provide data not only for recent activity but “over the lifespan of the project.”

In theory, RIA’s new rules should apply prospectively, not retroactively, but it’s complicated. Regional centers with only pre-RIA capital raises are still asked to grapple with Form I-956G and its questions about compliance with new rules for post-RIA capital raises. Regional centers with no new capital raises are still asked to pay $10,000 or $20,000 every year to fund oversight for new capital raises. EB-5 investors who started the process pre-RIA are still dependent on their sponsor’s ongoing eligibility post-RIA.

How did we get here, and what arguments have been made along the way?

Initially, USCIS interpreted RIA as creating a new regional center program and terminating the previous program — meaning a clear break between past and future. Under that interpretation, pre-RIA regional centers were no longer designated and had no grounds to file annual certifications or amendments (according to the April 2022 Q&A on the USCIS website), while pre-RIA investors were protected as a function of the protections around expiring legislation. But Behring Regional Center filed suit to challenge that interpretation, instead fighting for continuity between pre-RIA and post-RIA regional center designation. The litigation ended in August 2022 with a Settlement Agreement in Behring’s favor. The Settlement specified that “previously approved regional centers sponsoring new projects or new investors under the Integrity Act will comply with all the requirements of the Integrity Act” and “if a previously approved regional center fails to file a Form I-956 application or amendment by December 29, 2022, it may no longer engage in any activities under the Integrity Act, including sponsoring I-526E visa petitions or the development of new projects.” Sadly, the Settlement Agreement was silent on the question of what happened to previously approved regional centers NOT sponsoring new projects or new investors under the Integrity Act, but merely needing to stay designated for the sake of past investor eligibility.

USCIS told Behring plaintiffs on October 14, 2022 that “USCIS has not determined what will happen to regional centers that choose not to file Form I-956. Specifically, it has not decided whether such regional centers will be terminated, whether they will have to file I-956H, whether they will have to file annual statements, or whether any of the RIA requirements apply to them.”

On December 23, 2022, USCIS published an “Alert” on the website (which remains on the site to this day), that “Dec. 29, 2022, is no longer the deadline to file Form I-956, Application for Regional Center Designation, amendments, as required by the Behring Settlement, and Form I-956G, Regional Center Annual Statement. USCIS is extending this deadline until we publish guidance that clarifies the requirements of these forms.”

Also in December 2022, USCIS slipped a file called I-956-001 NEW 60-Day Public Comment Response Matrix 20221207 among the Federal Register supplementary documents for Form I-956. This deeply buried file is the most extensive available Q&A on the various I-956 forms, with 126 responses by USCIS to public comments. For example, Q&A #90 addresses a comment by Ron Klasko who suggested “that a regional center that wishes to continue to exist solely to meet its contractual and fiduciary obligations relating to pre-RIA projects, but does not intend to file form I-956 to sponsor new post-RIA projects, should not be required to file Form I-956G, which requests information and references forms that do not apply to these regional centers.” USCIS did not take this fine point, but simply responded to Klasko that “Each approved regional center must file Form I-526G.” Q&A #51 addresses a I-956G comment from AILA arguing that “regional centers designated prior to the RIA that still choose to operate under the RIA are not required to provide data for fiscal years prior to the RIA passage.” USCIS disagreed in its response: “The statute does not distinguish between capital invested before or enactment of the RIA (EB-5 Reform and Integrity Act of 2022) for purposes of reporting under INA 203(b)(5)(G).” (AILA then shot back with a follow-up letter arguing in detail that some I-956G questions retroactively apply RIA requirements, and why that’s wrong, but AILA’s suggested changes to I-956G still did not make it into the revised form.)

In January 2023, USCIS announced a stakeholder meeting where “We will discuss issues related to regional center operations,” including “those who do not wish to solicit investments for new projects under the RIA.” USCIS received so much written feedback that they first delayed the meeting, to give more time to review all the feedback, and then cut the meeting agenda.  As IPO Chief Alyssa Emmel said in the April 25th meeting: “While we’re unable to discuss the regional center operations and investment period topics today, please rest assured that USCIS is engaged in ongoing efforts at the immigrant investor program office and across the agency to ensure that when we do have updates, we’re equipped to provide the EB-5 stakeholder community with clear guidance.”

In meeting with the Behring plaintiffs on May 1, 2023, USCIS reiterated that “Form I-956 and I-956G filing date deadlines still not set. These deadlines continue to be pushed back until the agency publishes guidance clarifying the requirements of these forms.”

The promised “guidance that clarifies the requirements of these forms” has not yet been published, so far as I know.  But I believe that I-956G, at least, nevertheless has a real deadline for all regional centers in December 2023, and that the Integrity Fee requirement is being applied to all regional centers this year without exception. I believe this from the latest fee and form instructions, and because USCIS has yet to grant the rationales for making any exceptions. [10/11 UPDATE: the new USCIS Q&A is part of the promised guidance.]

Everyone agrees that regional centers designated and active under the new law must tick all the compliance boxes under the new law, including filing I-956G annual reports and paying the Integrity Fee. The open question has been over which compliance boxes reasonably apply to regional centers that were designated under the old law and not taking any more investors under the new law. But so far, USCIS has not entertained that question because it has not granted any distinction between types of regional centers. This comes out in USCIS response to litigation. In Sunshine State Reg’l Ctr., Inc. v. Jaddou (23-cv-60795), “Plaintiff alleges that the Act distinguished between those Regional Centers created before the Act was passed, ‘Legacy-Regional Centers,’ and those after the Act was passed, ‘RIA-Regional Centers.’” But both USCIS and ultimately the judge disagreed. To quote the Opinion of May 30, 2023, “Plaintiff has not shown that it is likely to succeed on the argument that the statute unambiguously distinguishes between Regional Centers created before and after the Act for purposes of the Integrity Fund Fee.” In Gulf States Regional Center, LLC v. USCIS (2:2023cv01354), “Gulf States attempts to distinguish between the phrases ‘each regional center designated under subparagraph (E)’ and ‘any regional center’ used throughout the RIA,” (the logic that I also used in my February 2023 suggestion to USCIS about fairly applying RIA requirements).  But USCIS disagreed (as of Doc 49-1 filed 9/13/2023) that “subparagraph (E) is not limited to regional centers approved after the RIA’s enactment, but governs all regional centers in existence, regardless of their time of designation.” At least in litigation, USCIS has not entertained any ground of distinction that would allow treating regional centers differently depending on the time of designation and whether or not they choose to raise new EB-5 investment under RIA. Did the Behring Settlement force this position? Anyway, it seems to be the reality.

Back in October 2022, USCIS said it had then “not determined what will happen to regional centers that choose not to file Form I-956” to sponsor new projects and investors under RIA, including “whether such regional centers will be terminated, whether they will have to file I-956H, whether they will have to file annual statements, or whether any of the RIA requirements apply to them.” USCIS has not yet published a revision to this statement as of October 6, 2023. But based on the above sources, I gather that USCIS has, at least, firmly decided that the requirement to file I-956G and pay the Integrity Fee apply universally this year — and prepared to terminate regional centers that do not comply. Regional centers should prepare accordingly for Integrity Fee(s) due by the end of this month and annual reports due by the end of December. (And let me know if there are other court cases or buried sources of USCIS guidance that I should cite in this post.) [UPDATE: See EB-5 Questions and Answers as of October 11, 2023.]

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