Conference Rumors (partial investment, visa wait times)

I heard IPO Chief Sarah Kendall and Department of State Visa Control Office Chief Charles Oppenheim speak last week at the IIUSA conference in Seattle.  I’ll blog in detail about these talks and other news and insights from the conference as time permits, but first to quickly address a couple misconceptions that may affect current decision-making.

Rumor credits Kendall’s talk with announcing that it’s now acceptable to file I-526 with less than $500,000 before November 21, and Oppenheim’s talk with announcing that EB-5 backlogs have fallen. These impressions are not quite accurate, in context.

Sarah Kendall confirmed a point related to TEA requirements as they intersect with the “investing or actively in the process of investing” requirement. Her comments did not create or change the “actively in the process of investing” alternative to investing the full amount prior to I-526 filing.  Partial investment remains an option that’s just as available, narrow, and risky as it has always been. For discussion, see Joey Barnett and Vivian Zhu’s article “EB-5 Minimum Investment Amount Increases to $900,000 November 21, 2019 – Can an EB-5 Applicant Invest Less Than the Full $500,000 Now and Still Qualify?” and Robert Divine’s article “Member Perspective: EB-5 Implications from IIUSA Conference Leading up to November 21 Effective Date of Regulations” (and his previous cautionary words about skeletal filings.) Personally, I would not file I-526 with less than $500,000 invested because USCIS makes it so tough on the business side to prove that funds not actually in the enterprise account still qualify as “at risk” in the enterprise, as required. For examples of petitioners who invested less than the minimum amount before I-526 filing, and specific problems that they faced, see: FEB012017_01B7203, Oct262009_01B7203, Apr162009_01B7203, Nov032008_01B7203, OCT072005_01B7203. The official policy is here in the policy manual.

In his presentation on October 29, 2019, Charles Oppenheim estimated EB-5 visa wait times for current investors from China, India, and Vietnam that are shorter than the wait times he had estimated back in April 2019. This reflects a reduced estimate of the total backlog of EB-5 applicants (visa applications+ estimated applicants associated with pending I-526). However, the number of investors in line for an EB-5 visa has likely not fallen since April 2019, considering the number of of I-526 filings and adjudications and visa issuances since then. Oppenheim’s total backlog estimate fell due to revised assumptions about the number of visas to eventually be claimed by those investors. Specifically, he’s now estimating fewer visa applicants associated with pending I-526, because he increased the I-526 denial rate assumption for all countries, and decreased the family size assumption for some countries. I’ll blog and spreadsheet the detail when IIUSA publishes the slides, which Oppenheim promised would include some data not in the conference presentation. But to the bottom line: Oppenheim’s revised estimates are mixed news.  Considering the surge of people starting the race, it’s worrisome to see Oppenheim looking at the finish line and estimating that a reduced number of people will make it to the end to claim a visa.  For EB-5 investors considering risks, they must assume (a) solid success rate with associated long wait times, or (b) shorter wait times predicated on high failure rate. It’s one or the other, considering demand. (B) is unfortunately plausible, considering IPO’s recent behavior, so I don’t necessarily question Oppenheim’s revised predictions with shorter wait times.