FY2022 Annual Report of the Visa Office for EB-5 visas issued by country

March 6, 2023 46 Comments

The Department of State has finished publishing its Report of the Visa Office 2022. The report covers EB-5 visas issued from October 2021 to September 2022, with breakdown by country of origin, path (consular processing or status adjustment), and category (direct, regional center, TEA, reserved, unreserved). I’ve been waiting anxiously for the report, wondering about visa wastage, Integrity Act implementation, and impacts on the visa backlog and EB-5 visa wait times for China, India, and Vietnam.

This post comments on highlights, followed by data tables summarized from the reports.

FY2022 EB-5 Visa Issuance and Wastage

USCIS actually issued 10,885 of the unusually-high 19,987 EB-5 visas available in 2022.   Of the 9,102 EB-5 visas that didn’t get issued in FY2022, 6,396 couldn’t have been issued because segregated in newly-created set-aside categories. (The unused set-asides should carry over in future years, though the FY23 visa limits report doesn’t show the carryover.) The remaining 2,706 unused EB-5 visas in FY2022 were permanently lost to EB-5. (FY2022 is still much better than FY2021, when EB-5 lost 15,673 total visas, and FY2020, when EB-5 lost 7,498 visas.)

Visa wastage particularly affected countries with mostly regional center applicants using consular processing. For example, South Koreans got 695 EB-5 visas in 2019 (the most recent “normal” year) but only 396  visas in 2022 (86% by consular processing), despite the fact that 909 South Korean EB-5 applicants were ready and registered at the National Visa Center at the start of 2022. Hong Kong likewise suffered, with only 142 EB-5 visas issued in FY2022 despite 866 Hong Kong applicants ready at NVC at the start of the year. Meanwhile Indians, many adjusting status in the U.S., managed to get a record 1,381 visas in 2022 – even more than technically available to them under the year’s unreserved visa limit.

Reasons for FY2022 EB-5 Visa Wastage

EB-5 visa issuance in FY2022 was as low as it was largely due to the unfortunately protracted regional center program expiration, and the policy that prevented visas from being issued to regional center applicants from October 2021 to May 2022. (I wish that policy could be litigated on behalf of the over 18,000 EB-5 visas lost during the expiration.) Monthly visas statistics show that all regional center visas issued in FY2022 were packed into just four months: June to September 2022.  

The government had the entire year to issue direct EB-5 visas, but only issued 621, likely constrained by low demand (i.e. few direct I-526 filed and even fewer making it through I-526 processing to the visa stage). By comparison, 414 direct EB-5 visas were issued in the last normal year of FY2019.

Consular processing numbers were also depressed overall compared with FY2019, reflecting on-going struggles with post-COVID backlogs. For color on why the steps in consular processing remain so slow and problematic, see questions and answers in the Department of State/AILA Liaison Committee Meeting February 9, 2023, the NVC Immigrant Visa Backlog report (look at trends in the number of interview appointments, and compare appointment volume with backlog size), and the October 2022 Update on Worldwide Visa Operations. Those in or approaching consular processing should be aware of the NVC Timeframes page, with information on process status and times. The bright side is that consular problems affect not only EB-5 but also family-based visa issuance, and EB-5 benefits in 2023 from a share in FB visas that went un-issued in 2022 (as reflected in 2023’s unusually high EB visa limit).

High Volume of EB-5 Status Adjustments in FY2022

EB-5 visa issuance in FY2022 was as high as it was thanks to an unprecedented high number of status adjustments (37% of the total, as compared with 17% in 2019). For example comparing 2022 with 2019 visa issuance, China got fewer visas last year through consular processing but five times as many visas through status adjustment. 

The unusually high AOS numbers reflect the fact that USCIS got political pressure and made herculean efforts at the end of FY2022 to step up work on employment-based status adjustments, even as consular processing continued to struggle post-COVID.  

Direct EB-5 (and the visa bulletin even briefly becoming Current for China direct EB-5) did not contribute much boost. China ended the year with only 199 direct EB-5 visas issued – not much higher than usual, and not explaining the unexpected thousands of Chinese who adjusted status in 2022.

RIA Implementation, Reserved Visas, and Country Caps

Report of the Visa Office 2022 does segregate EB-5 visas into “5th Unreserved” and “5th Set-Aside” categories, reflecting changes to visa availability made by the EB-5 Reform and Integrity Act enacted March 15, 2022. Of course, no visas were issued in 2022 in the “5th Set-Aside” categories, since no applicants who filed I-526 after March 15, 2022 could have reached the visa stage in time. And according to Department of State interpretation, all EB-5 applicants with pre-March 2022 priority dates can only now qualify for a visa in the new 68% unreserved category, regardless of whether they invested in a TEA that matches new definitions. (I think this interpretation can and ought to be challenged, at at least one lawsuit by DRVC is challenging it, but it’s the fact for now.)

In theory, country caps further restrict availability within each category. Thus pending applicants from any one country can only expect up to 7% of the 68% unreserved EB-5 visas (with “otherwise unused” unreserved numbers going to the oldest priority dates i.e. Chinese).

In 2022, this theory held true for Vietnam but not for India. While both countries have excess demand for unreserved visas, and large NVC backlogs, the government in fact issued 815 EB-5 visas to Vietnam (about 7% of unreserved EB-5 visas) and 1,381 EB-5 visas to India (about 7% of total EB-5 visas). Hmmm…

Was this different treatment of Indians and Vietnamese an oversight, with the government remembering the unreserved limit in the new law for Vietnam while forgetting it for India? 2022 was naturally confusing for the Visa Office, which had to deal with a mid-year law change and leadership change. Or did many Indians get lucky just because they happened to be in the US, unlike most Chinese and Vietnamese EB-5 applicants with earlier priority dates? I wonder if maybe Indians got assigned “otherwise unused” numbers at the end of the year that should’ve gone by right to earlier Chinese priority dates, but practically couldn’t because the consulate in China lacked capacity to hold more interviews in time while the California Service Center had capacity to complete more I-485 and help avoid wastage. (I also wonder if a difference between consular and USCIS capacity to issue visas at the end of the year could explain the unusually high number of Chinese regional center applicants who were able to adjust status in FY2022 — more applicants than one would expect from priority date order.)

Country Diversity

FY2022 was similar to previous years in terms of countries claiming the most EB-5 visas. As in 2019, the top users in 2022 were (in descending order): China, India, Vietnam, South Korea, Brazil, and Taiwan. Meanwhile, Mexico, Canada, Russia, and Iran moved a few notches up the list in 2022, while Venezuela, South Africa, Great Britain, and Japan moved a few notches down. I was surprised mainly by the number of Canadians on this year’s list (why, Canada?) and Iranians (considering the often arduous source of funds path).

Visa Demand Context

For a reminder of the size of the visa queue before FY2022 visa issuance,  see the presentation by Charles Oppenheim for IIUSA in November 2021. At that time, Oppenheim estimated the EB-5 backlog (including applicants already registered at NVC and potential future applicants associated with I-526 pending at USCIS) at 57,253 visa applicants for China, 7,418 for India, 3,954 for Vietnam, and 18,054 for other countries  (see Slide 10).

Visas issued in 2022 reduced those queues by 6,125 visas to China, 1,381 visas to India, and 815 visas to Vietnam. (I assume that I-526 filings in 2022 didn’t grow the queues very much, unless it turns out that most of the 829 receipts last year came from Indians).  

The future wait times associated with that scary queue depend on (1) how many petitioners/applicants in the queue will ultimately give up/lose eligibility before they can clam a visa (likely a large number given the untenable wait times looming for Chinese and Indians near the end of the queue), and (2) how many EB-5 visas will be issued per year from now on, with the base case being 9,940 EB-5 visas * 68% unreserved * 7% country cap = up to 473 to applicants of each country. The actual number of visas available per-country in a given year can be significantly higher than the 473 base case based on carryover of family-based visas (as happened in FY2022 and happening again in FY2023 due to COVID-19), carryover of reserved visas (as should happen in 2024 and 2025 assuming law compliance and continued slow I-526 processing), and unreserved visas leftover after country caps (which should increasingly benefit China in coming years).  But even with the most optimistic assumptions on future visa availability, Chinese who filed I-526 from October 2016-March 2022 and Indians who filed I-526 from November 2019-March 2022 could face five or more years of waiting just for conditional permanent residence. Or would face that wait, except that it exceeds what many applicants (not to mention their RCs, projects, and investments) can practically bear, predictably leading to many queue-shortening drop-outs/failures. Meanwhile, new investors in reserved categories have to sweat over limited availability (with just 20%, 10% or 2% of visas available in each new lane, further restricted under the 7% country cap) and guessing the time for I-526 filings to invisibly build and max out that limited availability. I’ll write more about unreserved and reserved visa availability and wait time issues in separate articles.

The bottom line is that EB-5 suffers from a supply problem. EB-5 needs more visa numbers in order to accomplish what regional centers, investors, and public policy all require: a stable and predictable immigration opportunity that can accommodate new investors plus prevent a despairing rush for the exits for past investors/investment.

Tables based on the Annual Report of the Visa Office

Filed under EB-5 Statistics

EB-5 Integrity Fund FAQ, with notes on regional center status and investment period

March 1, 2023 7 Comments

Today, USCIS sent out an email alert with the title USCIS to Start Collecting Fee for EB-5 Integrity Fund, published a new EB-5 Integrity Fund page on the USCIS website, posted a Federal Register notice with information about the Integrity Fund, and created a new page for EB5 – Annual Fee for Regional Center at Pay.gov.  

We’ve known that annual regional center fees were coming, since Section 103(b)(J) of the EB-5 Reform and Integrity Act (RIA) created this new requirement. But we’ve been waiting for USCIS to clarify questions around the fee, including how and when to pay it, who qualifies as the “each regional center designated under subparagraph (E)” who needs to pay the fee, and who counts as “investors in the preceding fiscal year in its new commercial enterprises” for the purposes of calculating how much to pay.

Here are answers gathered from the documents published today by USCIS.

Who needs to pay the new EB-5 Integrity Fund fee, and when?

USCIS interprets RIA to mean that every regional center, regardless of when designated and regardless of when or if it sponsored investors, needs to make its annual Integrity Fund payment of $10,000 or $20,000 to USCIS between tomorrow and March 31, 2023. The fee due this month will apply to FY2023. (The next annual fee, for FY2024, will then come due in October 2023.) The Federal Register notice indicates that USCIS expects that all 630 previously designated regional centers will pay the fee, including those with no investors at all. The announcements give no indication that USCIS considered exceptions for regional centers that were not designated under the new law and do not have investors under the new law.  

What does the USCIS fee policy imply about USCIS treatment of previously-approved regional centers?

The fee policy apparently takes for granted that when RIA created a fee requirement applicable to “each regional center designated under subparagraph (E),” RIA did not actually specifically mean RIA subparagraph (E), but also the 1993 law Section 610.  

USCIS has yet to designate any regional centers under subparagraph (E) by approving I-956 applications. An unknown number of previously-approved regional centers have filed I-956 and chosen to solicit investors under RIA. This creates a grey area for the many regional centers that were only approved and only raised investment under the old law.  USCIS admitted as recently as October 2022, in meeting with the litigation plaintiffs, that “USCIS has not determined what will happen to regional centers that choose not to file Form I-956” and “whether any of the RIA requirements apply to them.”

But whoever drafted today’s USCIS fee policy did not recognize a grey area. The policy simply assumes, without argument or explanation, that new requirements applicable to regional centers designated under RIA also apply to regional centers previously designated under Section 610 of the Departments of Commerce, Justice, and State, the Judiciary, and Related Agencies Appropriations Act, 1993. The drafters of the fee policy apparently did not consider the arguments in my Comment on the RIA impact on pre-RIA Regional Centers and investors.

What will happen to any regional center that does not pay the EB-5 Integrity Fund fee by March 31, 2023?

On May 31, 2023, USCIS will start to send out Notices of Intent to Terminate to every regional center whose fee was not received on-time. (For some RCs, the NOIT may be the first they hear about the fee requirement. USCIS explained that today’s publications will be the only notice, and that USCIS will not individually notify or send invoices to regional centers.) A regional center’s designation will be terminated following the NOIT, unless the regional center can document that it did indeed submit the full required fee amount by the deadline of March 31, 2023.

The termination threat is a concern primarily because the new law defines devastating investor consequences from regional center sponsor termination (as further discussed in my previous post). INA 203(b)(5)(M) stipulates that I-526 petitions will be denied and even conditional permanent residence status terminated upon regional center termination. And the escape route offered in (M) is only theoretical, since USCIS permission is no guarantee that a good faith investor or NCE can – in fact – have a viable option to associate with another regional center. The termination consequence places great weight on today’s fee announcement.

What is the required amount of the EB-5 Integrity fee? What does the fee policy imply about who’s an investor, and what’s the investment period?

RIA states that the required fee for a regional center depends on the regional center’s number of investors in the previous year  – with the $20,000 annual fee reduced to $10K for “each such regional center with 20 or fewer total investors in the preceding fiscal year in its new commercial enterprises.”

But who counts as “investors in the preceding fiscal year” for the purpose of fee calculation? The statutory language could justify a reading as limited as “people who invested and filed I-526/I-526E in the previous fiscal year under RC sponsorship” to as broad as “people at any immigration stage whose investment was still in some sense under RC custody in the previous fiscal year.” The USCIS fee policy published today in the Federal Register presents this reasoning:

  • A possible interpretation of “investor” is “someone still in the investment period”
  • “Investment period” means the period from I-526 filing through the point of I-829 filing, on the authority of a 2021 blog post by Canadian financial professional Rupy Cheema of EB5 Diligence. (I don’t know whether to laugh or cry at this evidence that the USCIS Office of Policy and Strategy was apparently not sweating over statute, regulations, or precedent decisions or its own Policy Manual but just casting about the Internet to find a policy for the EB-5 investment period, but props to EB5 Diligence for catching OPS’s eye and earning the footnote citation in the Federal Register notice!)
  • Since Rupy said in 2021 that the investment period goes approximately from I-526 filing to I-829 filing, and since USCIS has ready data for number of I-526 and I-829 filings while other calculations would be hard, therefore USCIS intends to estimate “total investors in the preceding fiscal year in its new commercial enterprises” as equal to the total number of pending and approved I-526 at year-end less the total number of I-829 filed at any time by principals. With the qualification that “USCIS adjudicators retain discretion to evaluate the Integrity Fund fee due and the number of investors on a case-by-case basis, accounting for any other facts or evidence in the record in the totality of the circumstances, including any evidence provided by a regional center that believes it has greater or fewer total investors.”

This is a sober recital of the content of the Federal Register notice.  What can we expect next from the Office of Policy and Strategy?

Everyone involved in the huge fight over defining the “investment period” (on the regional center side and investor side) will be interested in this paragraph from the Federal Register analysis:

“USCIS considered generally counting only the Forms I-526 that were filed within two years of the applicable period used for determining the EB-5 Integrity Fund fee given the expected two-year minimum timeframe for the investment, or sustainment period, under the 2022 Act. INA section 203(b)(5)(A)(i); 8 U.S.C. 1153(b)(5)(A)(i). However, that would likely be underinclusive given that many investors are actively in the process of investing (i.e. not yet fully invested) when they file their Form I-526 petition as permitted under applicable requirements and, additionally, would not align with the sustainment period for those who filed prior to the 2022 Act, which runs approximately to the point of the Form I-829 filing, regardless of when they filed their Form I-526 or made their investment.”

Do we have a chance to provide feedback on the fee policy?

The Federal Register notice states that “USCIS is imposing this fee without soliciting public comment prior because this is a general statement of policy and an interpretive rule exempt from notice and comment procedures.” The notice claims that “The statutory provision that requires the $20,000 and $10,000 fees contains little ambiguity for USCIS to resolve or explain.” (And this, after the notice grappled with ambiguities around the investor count and overlooked the major ambiguity of regional center applicability.)  I will update this post if I learn of a chance to respond with questions and concerns.

Filed under EB-5 Law & Policy

RIA impact on pre-RIA Regional Centers and investors (comment)

February 10, 2023 1 Comment

The following is the comment related to Regional Center Operations that I submitted to USCIS in advance of the EB-5 engagement on March 20, 2023. (The comment deadline is 4 ET today.) I approached the question theoretically, and would love to hear more input from regional centers and investors who are personally affected. How can we best navigate the threat of termination and the burden of how to operate and maintain investor eligibility since passage of the EB-5 Reform and Integrity Act? (Note that the table below only reflects my interpretation/suggestion to USCIS. I do not know what policy USCIS will create or how USCIS will interpret and apply RIA.)

From: Suzanne Lazicki <suzanne@lucidtext.com>
Sent: February 10, 2023 8:44 AM
To: ‘public.engagement@uscis.dhs.gov’
Subject: Question: EB-5 Engagement March 20, 2023

Regional Center Operations: We will discuss issues related to regional center operations, in particular those who wish to withdraw from the program and terminate their status and those who do not wish to solicit investments for new projects under the RIA.

Comment

Regional centers that do not wish to solicit investments for new projects under RIA may and should still wish to retain their designation, for the sake of protecting their pre-RIA investors. Not that RCs have much practically to do for in-process past investors; the issue is that INA 203(b)(5)(M) now defines devastating investor consequences from regional center sponsor termination. (M) stipulates that I-526 petitions will be denied and even conditional permanent residence status terminated upon regional center termination. The escape route offered in (M) is only theoretical, since USCIS permission is no guarantee that a good faith investor or NCE can – in fact – have an option to associate with another regional center. Such an option depends on real-world factors outside the investor’s or USCIS’s control, including the existence of another regional center willing to take the burden under livable terms, a willingness by the terminated entity to transfer sustained investment to the sponsorship of a new RC, and documents that practically allow for such a switch. Investors originally sponsored by bad actor regional centers may be thankful for a prospect – however slim – to change sponsors upon USCIS termination. But the risky, uncertain prospect is hardly solace or protection for investors who already have a good sponsor responsibly managing their investment.

If USCIS starts to terminate regional centers for no fault except declining to raise new funds under RIA, the result will be loss of eligibility among EB-5 investors due to RIA – an outcome that RIA sought to avoid in principle with Section 108 Protection from Expired Legislation. 

Regional centers wishing to retain designation for the sake of shepherding pre-RIA investment and projects, not for the purpose of soliciting new investment, could reasonably be held to RIA requirements that apply to shepherding investment, and not held to RIA requirements specific to soliciting investment.

Practically, this means that shepherd regional centers should continue to report on their management of EB-5 investment and be subject to penalties for reasons related to fund management, but should not have to file I-956 and I-956F, or to complete the portions of I-956G that are indexed to I-956 and I-956F and to requirements specific to capital raising activities.

The following table considers which requirements created by RIA are specific to raising and deploying EB-5 investment, and thus naturally not applicable to RCs/NCEs that raised and deployed EB-5 funds prior to RIA and will not continue such activity after RIA.

Table 1. Applicability of RIA requirements to Regional Centers not sponsoring new investors or projects under RIA

Section of INA 203(b)(5)Comment on how this requirement should apply to regional centers not sponsoring new investors or projects under RIA
(E)(iii) Establishment of a Regional Center, regional center proposalNot applicable. As clarified by the Settlement Agreement in the Behring litigation, the requirement to apply for regional center designation with I-956 is specifically “for the purposes of sponsoring new projects and new investors under the Integrity Act.” 
(E)(iii) Record Keeping and AuditsApparently applicable to regional centers with an on-going status as sponsor of investor petitions. As a practical matter, when auditing records on an on-going basis, regional centers should be held to record requirements that existed at the time when their annual reports were filed, and that apply to the petitions they sponsor (with adjudication standards largely following the law at the time of filing).
(F)(i-iii) Business plans for regional center investmentNot applicable. Form I-956F is only required for NCEs soliciting investors under RIA.
(F)(iv) Site VisitsApparently applicable to all NCEs and JCEs still in the job-creating stage.
(F)(v) Parameters for Capital RedeploymentApparently applicable on an on-going basis to EB-5 investor funds that must be maintained at risk.
(G) Regional Center Annual StatementsAn on-going reporting requirement would naturally apply to every regional center with EB-5 funds under on-going management. However, the specific content of the annual report is specific to the basis of regional center designation.  INA 203(b)(5)(G) lists out annual report content that is specifically for “Each regional center designated under subparagraph (E)” – with no mention of regional centersdesignated under Section 610 of the Departments of Commerce, Justice, and State, the Judiciary, and Related Agencies Appropriations Act, 1993. The content list for regional centers “designated under subparagraph (E)” naturally echoes the new Form I-956 and I-956F (which regional centers not seeking designation or new projects under RIA are not required to file), and covers content specific to RCs soliciting and deploying new investment. While INA 203(b)(5)(G) is silent on annual reporting for regional centers retaining designation under 610(b) and  not amending designation to sponsor new projects or investors under the Integrity Act, USCIS might reasonably request such RCs to continue to file I-924, which was designed based on 610(b) (or to create a version of I-956G that omits the content only applicable to regional centers who have filed I-956 and I-956F, and to soliciting funds under RIA).
(H) Bona Fides of Persons InvolvedNot applicable, since RCs not soliciting investment after RIA are not procuring any funding under the program as described by RIA. The statute specifically defines “persons involved” as “in a position of substantive authority to make operational or managerial decisions over pooling, securitization, investment, release, acceptance, or control or use of any funding that was procured under the program described in subparagraph (E).”  Funding procured prior to RIA was not proposed under subparagraph (E), but under the program described in Section 610 of the Departments of Commerce, Justice, and State, the Judiciary, and Related Agencies Appropriations Act, 1993. (And as a practical matter, regional centers cannot retroactively change the persons who were involved in pooling investment that was pooled prior to RIA.)
(I) Compliance with securities lawsNot applicable, since RCs not soliciting investment are not engaged in offers, purchases, or sales of securities, or in providing investment advice – the activities subject to securities law compliance. There is obviously no on-going need to certify compliance for activities in which an RC does not engage.
(J) EB-5 Integrity FundNot applicable, since this section calls for a fee to be collected from “each regional center designated under subparagraph (E).” It does not reference regional centers designated in Section 610 of the Departments of Commerce, Justice, and State, the Judiciary, and Related Agencies Appropriations Act, 1993.  As noted above and with reference to the Behring Settlement Agreement, a previously-approved regional center is only required to amend its designation under subparagraph (E)  “for the purposes of sponsoring new projects and new investors under the Integrity Act.” 
(K) Direct and Third Party PromotersNot applicable to RCs with no open offerings to be promoted to alien investors.
(N) Threats to the national interestApparently applicable to all designated RCs, with no reference to whether it was designated under subparagraph (E) or Section 610 of the Departments of Commerce, Justice, and State, the Judiciary, and Related Agencies Appropriations Act, 1993.
(O) Fraud, misrepresentationApparently applicable to all designated RCs, with no reference to whether it was designated under subparagraph (E) or Section 610 of the Departments of Commerce, Justice, and State, the Judiciary, and Related Agencies Appropriations Act, 1993.
(Q) Fund AdministrationNot applicable to regional centers that already deposited and deployed investor funds to capital investment projects prior to RIA, and are not raising any new funds to be deposited or deployed.

Filed under EB-5 Law & Policy

March 20–April 25 EB-5 Engagement Invite

January 30, 2023 19 Comments

3/14 UPDATE: The EB-5 engagement has now been postponed to April 25, 1-3 ET. Visit the invite page to register again. The postponement email said “We appreciate all the feedback and questions you submitted in advance and are very closely reviewing this helpful information.”

From: U.S. Citizenship and Immigration Services <uscis@public.govdelivery.com>
Sent: January 30, 2023 1:00 PM
Subject: USCIS Immigrant Investor Program (EB-5) Stakeholder Engagement

USCIS Immigrant Investor Program
(EB-5) Stakeholder Engagement

Monday, March 20, 2023
1:30 – 3 p.m. Eastern

U.S. Citizenship and Immigration Services (USCIS) invites you to participate in a stakeholder engagement on Monday, March 20, 2023, from 1:30 to 3 p.m. Eastern.

During the first part of the engagement, USCIS will discuss three specific areas within the Immigrant Investor Program. 

The three topics are:

  1. Direct and Third-Party Promoters: A promoter should submit Form I-956K, Registration for Direct and Third-Party Promoters, before operating on behalf of any of the specified entities or promoting any offering under the EB-5 Regional Center Program. The promoter must submit Form I-956K separate from the Form I-956F, Application for Approval of an Investment in a Commercial Enterprise, to seek an approval of an investment in a commercial enterprise.
  2. Investment Period: USCIS will discuss the requirements for an immigrant investor to sustain their investment if they filed Form I-526, Immigrant Petition by Standalone Investor, before March 15, 2022, and the new requirement under the EB-5 Reform and Integrity Act of 2022 (RIA) that capital must be expected to remain invested for at least two years for those who filed an I-526 or Form I-526E on or after March 15, 2022.
  3. Regional Center Operations: We will discuss issues related to regional center operations, in particular those who wish to withdraw from the program and terminate their status and those who do not wish to solicit investments for new projects under the RIA.

We will then hold a Q&A to hear questions, comments, and individual feedback from stakeholders on these three topics. Although we are interested in receiving overall feedback about the EB-5 program, we would appreciate focusing the Q&A portion of the engagement on the topics above.

We will not address case-specific questions, questions outside the scope of the engagement, or issues under active litigation or likely to be litigated. We are committed to public engagement, and sessions like this provide valuable feedback as we work to improve our programs. Participation in this engagement will be virtual.

Questions for consideration:
If you would like to submit a question in advance on one of the three topics we will be covering during this engagement (direct and third party promoters, sustainment, or regional center operations), please send your question to the Public Engagement mailbox at public.engagement@uscis.dhs.gov with the subject line “Question: EB-5 Engagement March 20, 2023” by 4 p.m. Friday, Feb. 10.

To Register:

1. Visit our registration page.

2.  You will be asked to provide your email address and select “Submit.”

3. On the next screen, you will see a notification that you successfully subscribed to this event.

Once we process your registration, you will receive a confirmation email with additional details.

To request a disability accommodation to participate in this engagement, email us at public.engagement@uscis.dhs.gov by 4 p.m. Eastern, Monday, March 13. 

Note to media:

This webinar is not for press purposes. Please contact the USCIS Press Office at media@uscis.dhs.gov for any media inquiries.

We look forward to your participation!

Filed under EB-5 Events

December/January Updates (Regional Center status, visa availability, I-526 and I-829 Processing in Q4, Fee Rule, Form I-526 and I-956 revisions and comments)

January 6, 2023 4 Comments

A quick roundup of significant EB-5 developments since last report – rather delayed, while I held out for good news. I did not expect to start my 14th year in EB-5 grappling with basic questions like “How and why do regional centers exist?” and “Is EB-5 an immigration opportunity?” I hope that 2023 will bring policy clarifications and processing improvements to help resolve such questions, which should not be open.

Regional Center Status

On December 23, USCIS slipped a new sentence onto the USCIS website: “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.”

I saw this update on Christmas Eve and thought about leaving the nieces and nephews to report on it, but why? EB-5 stakeholders needed this notice months ago. By three business days before the deadline, everyone had already had to make their guesses and gambles and done what they were going to do with I-956 and I-956G (if they even realized that a December 29 deadline existed, since USCIS did not offer I-956 guidance to the general public, but only in litigation settlement and a private meeting with a few litigation plaintiffs). USCIS and industry are not sure how to handle the regional center application, amendment, and reporting forms because we lack clarity or agreement on basic questions about regional center identity and responsibilities. The effect of the Integrity Act on previously-approved regional centers and their investors remains unclear. Nine months after the Integrity Act passed, the USCIS Policy Manual section on regional center designation and termination remains vacant.  Meanwhile, billions of dollars are flowing in real time under sponsorship of entities and from investors who aren’t sure what eligibility requirements do or will apply to them. On the bright side, I’m glad that USCIS acknowledged a need to “clarify the requirements,” and did not stick to an unreasonable deadline. And stakeholders now have more time to provide input.

Form I-956, I-956F, I-956G, and I-956K

The Federal Register has re-opened opportunity to comment on the new regional center forms I-956, I-956F, I-956G, and I-956K. Feedback will be accepted until January 26, 2023. (Click on the “View More Documents” button to see what you’re commenting on.) This is a great chance to submit your view on the application/implementation of regional center requirements, because a responsible person at DHS is compelled to actually read and respond to each comment made through the regulatory process. It’s not like stakeholder meeting comments, which can disappear into the void. I was interested to read USCIS’s digest and responses to the previous round of comments. Many stakeholder questions about ambiguities were met with the response “USCIS may consider rulemaking to address these issues.”

I-526 and I-829 Receipt and Processing Data

USCIS published form receipt and processing data for FY2022 Q4 (July to September 2022), and I also received data unofficially for EB-5 adjudications in October to December 2022. See my Processing Data page with updated charts and detail for I-526, I-829, and I-485 processing through the end of the year.

Short report: fantastic performance for I-485 at the California Service Center in Q4 (thanks to USCIS leadership for prioritizing EB visa issuance and to Congress for applying political pressure that proved effective!), and on-going terrible performance by the Investor Program Office. IPO is still on track to deliver over-six-year processing times for I-526 and I-829, still chaotic in the date range of petitions being processed, and still denying a large percentage of I-526. In July to September 2022, over half of I-526 adjudications were denials. Fiscal Year 2022 ended with a total of 590 I-526 approvals and 825 denials/withdrawals; in other words, $295+ million in EB-5 investment yielded a chance to pursue a visa while $423.5+ million was invested without resulting in any chance to immigrate. These dreadful numbers can trace back to factors including economic pressures on EB-5 projects, heightened risk from long processing delays, the legacy of “extreme vetting” philosophy, and rogue IPO staff alone in their home offices and apparently free to make up and apply idiosyncratic standards of proof for source of funds. I expect the I-526 success rate to improve if and when IPO standardizes and publicly articulates its policy and adjudication guidelines, shortens processing times, and increases staff supervision and quality control.

I-956 and I-956F filings commenced in Q4, but the USCIS data report for Q4 does not report them. The USCIS Office of Performance and Quality may not even realize that the I-956 forms exist, and still has line items for I-924. OPQ did add I-526E to its Q4 data reporting, lumped in one line item together with I-526. Just 188 I-526/I-526E were filed in July to September 2022.

USCIS Fee Rule

The Federal Register has published a Notice of Proposed Rulemaking for the future USCIS fee schedule, with a public comment period open until March 6, 2023. USCIS invites the public to a listening session for the Proposed Rule on January 11 at 2 pm ET.

The fee rule process is critical, because it determines over 90 percent of USCIS funding and whether or not USCIS has “the resources it needs to provide adequate service.” The fee rule process is a major reason why USCIS never has ended up with needed resources or adequate service. If you want a good cry and to lose some hair, read the 132,341 words that explain the budgeting methodology and assumptions. I am working on an in-depth article discussing the rule’s EB-5-related content. The obvious headline is the huge proposed increase to EB-5 form filing fees. But I’m more concerned by the assumptions and plans disclosed in discussion of how USCIS arrived at the proposed fees, and the question of how to respond strategically so that the Investor Program Office ends up with resources.

UPDATE: The IIUSA blog has published my detailed analysis of the formula and inputs behind the fee rule, with thoughts on how to respond.

Visa Availability

Congress did not, after all, pass the EAGLE Act or repeal country caps as part of FY2023 appropriations, which means that (for now) EB-5 visa availability remains constrained/protected by caps that limit any one country to 7% of visas in oversubscribed categories. In the near term, that on-going status quo is good news for anyone in EB-5 who isn’t an in-process EB-5 applicant born in China, India, or Vietnam.

The new EB-5 set-aside categories remain enticingly “Current” in the Visa Bulletin, which means nothing for planning because the Visa Bulletin cannot see and does not flag crowds, if any, when they start at the I-526 stage. The Visa Bulletin only monitors and controls the later visa stage, not the queue on its way to the visa stage. USCIS knows how many people are getting in line by filing I-526/I-526E, but USCIS has persistently refused to publicly report on I-526 filings/inventory by category or country. This leaves stakeholders blind to visa backlogs until the backlogs have already built up and too late to avoid.

If only USCIS would report timely and category/country-specific I-526 filing data, then we could project and compare in-process visa demand with available visa supply to calculate availability/timing for each EB-5 category.  USCIS should want to empower prospective EB-5 users to judge upfront whether and when EB-5 could offer an opportunity to immigrate. The U.S. government engages in fraud when offers an investor visa incentive while making it impossible to assess, at the time of investment, the availability of that incentive. (So far, I’ve only succeeded in getting USCIS to answer in November 2022 a Freedom of Information Act request that I submitted in February 2020 for I-526 inventory by country, having previously fruitlessly tried to get country-specific I-526 data via IPO customer service requests. The two-year-old data was useless by the time it was finally delivered to me. Others have encountered similar delays and obstruction from USCIS. As of today, the best I-526 data we have is mostly thanks to IIUSA communicating with the now-retired Charles Oppenheim at Department of State, and goes through 2021. I hope for more transparency from USCIS in 2023!)

Form I-526 and I-526E

We get another chance to provide feedback to USCIS on the revised Form I-526 and I-526E, with comments due by January 23, 2023. The last round of comments successfully convinced USCIS that it’s unreasonable to demand that petitioners detail 40 years of employment history (the current proposed version asks for 20 years of employment history). Perhaps this time we can get through to USCIS what “substantive authority” means, such that USCIS doesn’t misidentify “persons involved.” Also, let’s all remind USCIS that the public list of questions and required evidence on the Form I-526 should match the private list of questions and required evidence given to USCIS adjudicators. (For example, if USCIS truly holds the untenable standard that that each investor’s eligibility is contingent on the lawful source of funds for each other investor in the NCE, then the Form I-526 should reflect that standard, and request lawful source of funds documentation for NCE investors other than the petitioner. Currently, the Form I-526 does not request any non-petitioner source of funds evidence. But USCIS has directed adjudicators to request it at the RFE stage, and to deny direct I-526 for lack of source-of-funds documentation for non-EB-5 investors.)

Form I-956K Promoter Registration

USCIS has published Form I-956K, Registration for Direct and Third-Party Promoters. The purpose of the form is “to register with USCIS as a direct or third-party promoter” and to “allow DHS to perform standard background checks with law enforcement agencies.” The form is exciting due to its ambiguities (with vague terms pointed out in the draft I-956K still undefined), and the dramatic consequences of getting it wrong. The I-956K instructions warn that if USCIS finds problems with I-956K, penalties can include criminal prosecution for the aspiring promoter plus denial of applications and petitions associated with the regional center, NCE, or JCE associated with that promoter. The I-956K instructions request that “a promoter should submit Form I-956K before operating on behalf of any of the specified entities or promoting any offering under the EB-5 Regional Center Program.” (See also the article “Who are ‘Promoters’ and What Requirements Apply to Them Under the EB-5 Reform and Integrity Act?” in the October 2022 Regional Center Business Journal, and the above-linked Federal Register invitation to submit I-956 comments to USCIS.)

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

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