USCIS has finally updated the Citizenship and Immigration Data page with form receipt and adjudication numbers through September 2024, the end of the fiscal year. The numbers continue to show encouraging EB-5 processing improvements and robust but sadly unsustainable EB-5 demand.
I put the FY2024 data in context of the fifteen years since I launched my business plan writing service and started blogging about EB-5.
The chart shows that USCIS just had its best EB-5 processing year since 2018. EB-5 form completions more than doubled from the previous year, and reduced the I-526 and I-829 backlog to the lowest level since before 2015. USCIS also managed to process 1,119 post-RIA I-526 and I-526E, thus generating a significant number of applicants for set-aside visas in 2025. If the processing capacity applied to pre-RIA I-526 in 2024 is moved to I-526E in 2025 (as it might be, considering that the net backlog for I-526 is only 300 forms), then nearly all currently-pending I-526E could be processed in 2025. This is the good news.
Meanwhile, I-526E receipts in FY2024 reflect EB-5 demand at its highest level since before 2019, and once again shooting above the level possible to accommodate under the EB-5 numerical limit (i.e. about 10,000 visas annually, of which historically an average 38% go to investors while the rest to go spouses and children). Incoming EB-5 demand is largely aimed at the fraction of visas in set-aside categories, and lacks an escape route since Department of State is still working through the legacy Unreserved visa backlog generated by excess EB-5 demand from 2012 to 2019, as illustrated in the above chart. When the Unreserved backlog disappears (which I calculate could happen by 2030), thus clearing the way for post-RIA applicants to access Unreserved as well as Set-Aside visas, the 10,000 annual visa limit would still not be sufficient to accommodate new investors coming in at a rate of nearly 5,000 per year, as happened in FY2024.
The above chart illustrates that EB-5 needs, overall, about 30% more annual visas than it has, in order to close the gap between actual/potential and sustainable demand. (If we drilled down to historical imbalances by country and TEA category, the gap would be greater than 30% in some cases and less in others.) If the visa demand gap isn’t closed by increased visa supply, it will be closed by plummeting EB-5 usage when prospective investors see the gap producing backlog delays.
I am committed to doing whatever I can to support relief from the current unsustainable situation in EB-5, whether that be any possible EB-5 visa relief, or measures to make visa wait times more tolerable. I have been in advocacy conversations about legislative options, and have tried to support data and education to make visa wait times at least more understandable and predictable. I oppose measures such as the IIUSA sustainment lawsuit that would make visa wait times more painful and unattractive by linking repayment timing to visa timing for post-RIA investors. I also made the tough decision this year to stop writing regional center EB-5 business plans, given my backlog analysis, though that work had been my bread and butter for over a decade. Not that my small professional sacrifice will make a difference, but it reflects how seriously I take the current EB-5 backlog problem. I don’t want to help dig the hole deeper, and I hope for the day when EB-5 can become sustainable — which it may, if many people take the current problem seriously. Immigration opportunity in exchange for economic development and job creation is a beautiful thing, when it’s real. EB-5 investment has supported so many good projects and business ideas, and it needs to be able to realize its immigration promise to investors, including investors from China and India.
And now for a full set of charts for the FY2024 Q4 data. I notice that I-956 and I-956F receipts have been falling while adjudication volumes continue to grow – an interesting industry phenomenon and a good sign for processing times. I-829 receipts reached an unprecedented high this year. Are people increasingly removing conditions individually rather than as families with the principal applicant? Denial rates remain very low for post-RIA forms and I-829, and elevated for legacy I-526. I included a summary table for the pending I-485 inventory as of November 2, 2024, showing over 12,000 EB-5 adjustment forms pending. And I note that Department of State has also published the first month visa issuance report for FY2025. Only 6 post-RIA visas were issued through consular processing in October 2024 (3 high unemployment, 2 rural, and 1 unreserved), but the Visa Bulletin suggests that Department of State expects this pace to increase shortly. I’ve also updated my Processing Data page with the Q4 data.
We’ve known that EB-5 set-aside visa retrogression is coming, but not when. Excess demand has been evident in data for I-526 and I-526E receipts for High Unemployment and (soon) Rural categories. (AIIA just published a FOIA response based on a September 2024 query, and before that we had the IIUSA FOIA data queried in July 2024, the WR Immigration FOIA data queried April 2024, and AIIA’s FOIA of 2023 data.) But when will high unemployment and rural investors reach the visa stage with their families in sufficient numbers to max out available visas? I had predicted that sluggish USCIS processing might slow-walk the backlog and keep the Visa Bulletin “current” through 2025 for EB-5 set asides. However, USCIS has apparently accelerated the volume of petition processing since last report in June 2024. The January 2025 Visa Bulletin includes a note with this warning signal for potential retrogression this year.
E. VISA AVAILABILIY IN THE EMPLOYMENT FIFTH PREFERENCE (EB-5) SET ASIDE CATEGORIES
The Department of State and USCIS note increased I-526E petition approvals, and both agencies see increasing numbers of individuals processing their applications to completion in the EB-5 set aside categories. It may become necessary to establish Dates for Filing and Final Action Dates during the fiscal year to ensure that issuances in these categories do not exceed annual limits. This situation will be continually monitored, and any necessary adjustments will be made accordingly.
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Is this announcement significant? What changes, when the Visa Bulletin changes and imposes cut-off dates?
Let’s start with what doesn’t change: visa bulletin retrogression does not make expected visa wait times longer than they were already. A high unemployment investor with an August 1, 2024 priority date has a wait time that’s a function of the 3,995 other high unemployment investors who have earlier priority dates, and who will be joining their spouses and children to compete for available HU visas (2,200 or so visas this year, and 1,000 annually thereafter). A rural investor with an August 1, 2024 priority date has a wait time that’s a function of the 2,809 other rural investors who have earlier priority dates, and who will be joining their spouses and children to compete for available HU visas (4,400 or so visas this year, and 2,000 annually thereafter). The picture is a bit complicated by the fact that expected wait times for Chinese and Indians can be increased over time by subsequent Rest of the World investors, while ROW investors benefit when the Visa Bulletin limits China and India. But basically, an investor’s visa wait time originates in the demand/supply balance on the day he joined the back of the visa queue by filing I-526E. The wait time is not created or changed on the day that the front of the visa queue exceeds annual limits and triggers a cut-off date in the visa bulletin. The Visa Bulletin reflects a backlog situation; it does not create that situation. If anything, an early Visa Bulletin cut-off date would be good news for visa timing overall, because it would mean that USCIS petition processing is proceeding more quickly than expected, and that 2025 set-aside visas may be maximized instead of lost.
Visa Bulletin retrogression will change the EB-5 market, because many people don’t believe in backlogs until reflected in the visa bulletin. I sadly keep getting marketing emails and seeing published articles with variations on this false/misinformed statement: “There is no significant retrogression concern for the time being for post- RIA investors who invest in rural and high unemployment projects (all of which remain current as of the latest State Department Visa Bulletin).” When the Visa Bulletin is silent, people don’t do the math with I-526/I-526 receipt numbers, and don’t calculate for themselves that all rural visas this year and all high unemployment visas this decade could be absorbed by the investors+family already in line as of mid-2024. When the Visa Bulletin speaks, then industry and prospective investors don’t need math or FOIA data to see oversubscription. For the sake of EB-5 program integrity, I’m glad that the Visa Bulletin is starting to give warning of a backlog situation that should already be informing industry and investor decisions. It’s highly material for issuers and investors to know whether the incentive supporting the investment exists or not.
Does it matter that the warning in the January 2025 Visa Bulletin might not be fulfilled, and that set-aside cut-off dates may not actually appear in 2025? For historical reference, the December 2012 Visa Bulletin first warned that “It appears likely that a cut-off date will need to be established for the China Employment Fifth preference category at some point during second half of fiscal year 2013.” But as it happened, China EB-5 did not get its first cut-off date until the May 2015 Visa Bulletin — thanks again to slow/low-volume I-526 and consular processing. Did past Chinese EB-5 investors with priority dates between 2013 and 2015 benefit from the delay in imposing cut-off dates? Not really, because excess demand was a fact regardless of when reflected in the visa bulletin. A delay in processing the China EB-5 crowd just resulted in lost EB-5 visas in 2013 and 2014. Subsequent visa bulletins show that China-born EB-5 applicants with April 2015 priority dates did not start getting visas until 2017 or finish getting visas until 2022, no matter the word “Current” in the April 2015 Visa Bulletin. On the other hand, a delay in imposing cut-off dates was great for the EB-5 market, which stayed hot under the attractively “current” visa bulletin and was able to raise over $14.3 billion dollars from China-born investors from FY2013 to FY2015. The harvest would likely have been much smaller, had Chinese investors realized at the time that everyone with priority dates from May 2013 would end up experiencing retrogression delay.
As discussed above, a Final Action Date in the Visa Bulletin does not suddenly make wait times longer than they were already. So it’s not quite honest to say “hurry to secure your place in line by filing I-526E before the Visa Bulletin imposes Final Action Dates.” Two Indian high unemployment investors, one with April 31, 2025 priority date and one with a May 1, 2025 priority date, would have nearly the same place in line and thus nearly the same visa wait time outlook regardless of whether May 2025 happened to be the month when the Visa Bulletin showed retrogression. No matter the visa bulletin status on the date of filing, these two investors will wait for as long as it takes to grant green cards to other Indian HU applicants with earlier priority dates, and to rest-of-world HU applicants with earlier and later priority dates.
However, there is some sense in a message “hurry to file I-526E before the Visa Bulletin imposes a Date for Filing for your country/category” — at least for investors based in the United States. While Chart B Date for Filing does not change the time to get a visa, it does change the opportunity for concurrent filing. A Date for Filing stops new investors from filing I-485 with I-526E, meaning they can’t immediately file for employment and travel benefits. And these interim benefits are valuable. I’ve had direct EB-5 clients who made recent EB-5 investments for the sake of EAD and advance parole, even understanding the likelihood of severe green card delay. Our hypothetical friends with the April 31 and May 1 priority dates may have the same green card waits but very different experience during the wait, if hypothetical Visa Bulletin retrogression in May 2025 meant that one could get I-485 on file and thus able to apply for and enjoy interim employment and travel benefits, while the other couldn’t.
For additional analysis, see Lee Li’s new article for IIUSA January 2025 Visa Bulletin: EB-5 Dates Remain Unchanged, Noting Possibility of Cut-Off Dates for Reserved Categories. and IIUSA’s newly-refreshed EB-5 Visa Data Dashboard. I have been working on detailed analysis that I haven’t yet published, but note that I continue to make timely updates to my Key EB5 Backlog Data file (always linked to the top of the EB5 Timing and Processing Data pages so the public can access as much data input as I have at any given time). Recently I am particularly benefiting from AIIA’s FOIA requests for Pre-RIA I-526 inventory data and Post-RIA I-526 and I-526E receipt data, because these datasets provide a breakdown by month that can be used in forecasting visa bulletin cut-off dates. Combining the recent wealth of FOIA data with newly-available granular NVC and I-485 numbers, I’m considering reopening my customized EB-5 timing service in the new year.
Path of funds has been a major factor in I-526 denials, especially since 2019, and behind many appeals to the AAO. Is USCIS right to demand the tracing of every penny so many steps beyond the EB-5 investor? The AAO generally upholds USCIS decisions, but now a federal judge has weighed in with more nuance, and nice ammunition for future appeals. To quote Battineni v. Mayorkas: “In sum, the Court concludes that while the regulations require a petitioner to ‘show’ that their funds were obtained from a lawful source, they do not require the petitioner to ‘trace every penny’ beyond their initial acquisition.” For more, see: Alert: Another Victory for the Klasko Immigration Litigation Team.
Other Resources (I-829 denial options, RC audits, RC sanctions, I-526E data analysis)
The latest IIUSA Regional Center Business Journal features many good articles. I’d particularly like to highlight “Review of USCIS I-829 Denials in Removal Proceedings” (John P. Pratt, Edward Ramos, Elizabeth Montano, and Daniel B Lundy) which gives valuable information about the process and investor options following I-829 denial. Regional center operators will want to read Laura Kelly’s article “What Happens During a USCIS Regional Center Audit? Now We Know,” and Robert Divine’s article “EB-5 Sanctions: Real Danger with Possible Relief.” Note also that Li Lee’s full I-526/I-526E analysis, previously available just as an excerpt, is published in full here as “Latest Data on I-526E and I-526 Filings, Adjudications, and Withdrawals: Country-Specific Trends in EB-5 Demand, Investment Preferences, Case Processing, and Reserved Visa Waitlists.”
Election Impacts
What will happen to EB-5 under the new presidency and Congress? If you’d like some comfort, I recommend Carolyn Lee’s discussion with Christine Chen in this webinar: “Navigating EB-5 Amid Political Change: How Recent Elections Could Shape the Future of Investment Immigration.” They sympathetically review many of the questions and concerns that EB-5 immigrants may have today, bringing perspective as people who have faced the challenges of EB-5 through multiple administrations. To quote Carolyn: “It’s going to be as difficult as it ever was, and perhaps not more so.” I’m also looking forward to the analysis in IIUSA’s upcoming webinar “Post-Election Outlook & EB-5 Advocacy,”coming up on Wednesday, December 11 at 12 PM ET. In the article “Recapping the 2024 Elections and the EB-5 State of Play” (November 11), IIUSA discusses the Congress-level changes that may be even more consequential to EB-5 than the presidency.
Last time around, in 2016, we were excited/anxious that a President Trump might pay attention to EB-5, being a real estate developer with EB-5 projects in the family. But I couldn’t tell that he ever did. EB-5 was tangentially affected during his previous presidency has part of a general turn toward “extreme vetting” of immigrant petitions and reallocation of USCIS resources toward “other priorities.” But it took a couple years for those trends to translate into reduced processing volumes and increased processing times for EB-5. The really devastating impact to processing and visa issuance in that period did not come from administrative choices, but from COVID-19. Former President Trump reauthorized the regional center program five times, though likely unknowingly as it was just a sentence buried in 1000-page spending bills for his signature. Painful new EB-5 regulations were finalized under his administration, but drafted before he arrived.
As resident EB-5 chart-maker, I made a few pictures of what happened with EB-5 and immigration generally under the previous Trump administration. The information on IPO staffing comes from stakeholder meetings and litigation, petition processing numbers are from the USCIS data page, and visa issuance numbers from the DOS statistics page. I’ll let you look at the numbers and guess whether correlation means causation. The year 2019 interests me particularly, being the year when policies had had a chance to take effect but the Pandemic hadn’t skewed things yet. If past performance predicts future results, I would expect EB-5 processing to slow within a couple years as fewer staff have to perform more steps, and legal immigration numbers to fall only fractionally (barring the excuse of another pandemic, or unless Steven Miller is able to realize all his evil plans).
A reminder to all regional centers that the Integrity Fund payment for the coming year is due THIS WEEK by October 30, 2024 (i.e. 30 days from Oct 1). See https://www.uscis.gov/IntegrityFund, and discuss with your attorney to make sure of getting all the fiddly details right with the payment process. Any regional centers who miss this week’s deadline may have a chance to pay with a late fee penalty until December 30. Regional centers who do not pay in full by December 30, 2024 face termination. Many people were understandably confused by the process last year, and recently USCIS agreed (following litigation and advocacy) to offer a make-up opportunity for RCs that received termination notices over FY23 or FY24 fees. USCIS added a note to the EB-5 What’s New page this month that “For regional centers that failed to pay fees for FY 2023 and/or FY 2024, we are also accepting delinquent payments for FY 2023 and FY 2024 from Oct. 1, 2024, through Dec. 30, 2024.” However, the page warns that “We will reject any EB-5 Integrity Fund fee payments for FY 2023, FY 2024, and FY 2025 we receive after Dec. 30, 2024” and “we will take steps to terminate any regional center that, on or before Dec. 30, 2024, has not paid the required EB-5 Integrity Fund fees for each of FY 2023, FY 2024, and FY 2025.” If you’d like additional explanation, Carolyn Lee has recorded a webinar on Regional Centers: USCIS Integrity Fee Update – Compliance, Litigation, and I-956G Filing.
Resources
I’m happy to report that The Essential EB-5 Investor’s Guide is now published and available for purchase on Amazon. Many people know author Dilip Parameswaran from Telegram, where he has engaged with the EB-5 community and shared his experience as an EB-5 investor and professional financial analyst. I had opportunity to review and contribute to the book, and I salute Dilip for achieving a tough goal: lucidity. The book is introductory, addressing basic questions simply and concisely. At the same time it’s remarkably comprehensive, providing sophisticated treatment of both the investment and immigration sides of EB-5. Dilip has turned his own hard-won EB-5 education into an efficient, systematic, and unbiased curriculum to help others. The book is by and for EB-5 investors, but I would recommend it to new EB-5 issuers and project companies. Blogs like mine can become a confusing blizzard of shifting detail. This book lays out a solid basic framework for thinking about how EB-5 works.
I also contributed recently to a short, free guide prepared from an industry perspective and published by JTC: EB-5 Investor Due Diligence: Finding the Right Project for Immigration Success. This whitepaper addresses project structures and timelines, and suggests practical considerations and questions for vetting EB-5 offerings.
Meanwhile, I continue my day job of writing business plans for immigration purposes. Thank you to everyone who voted for me as a business plan writer in the EB5 Investors Magazine Top 25 poll — this year and since 2016.
EB-5 Retrogression Update
As I wrote in August for the EB-5 visa availability FAQ, retrogression happens IF a large crowd of potential applicants forms, with enough people to exceed annual visa availability, and WHEN that large crowd reaches the stage of becoming qualified visa applicants. October has provided new info on both the “if” and “when” questions.
“If”: I-526E filing numbers continue to show that retrogression is a foregone conclusion in the High Unemployment category, at least for China and India, and closing in on a possibility for the Rural category. IIUSA shares its most recent FOIA data in Post-RIA EB-5 I-526E Data Trends: Insights and Implications for Investors and Stakeholders (October 21, 2024) and Potential Retrogression and Visa Waitlist in the EB-5 Program (October 28, 2024). IIUSA analyzes pipeline demand for EB-5 reserved visas, and points to potential advocacy remedies for demand/supply imbalance. I salute IIUSA for taking the key first step toward recovery – acknowledging that we have a problem – and for starting to foresee advocacy steps toward EB-5 visa relief. AIIA is also vigilant on this issue, and I look forward to their FOIA results coming soon. I’ve been writing up a detailed analysis that puts post-RIA petition filing numbers and other recent data in a wider context of overall EB-5 visa availability in the coming five years, considers scope for matching visas to applicants across per-country and TEA-category limits, and notes variable assumptions about visa demand per investment. My analysis takes ten tough pages to reach the same basic conclusion as other analysis: EB-5 needs more visa numbers to remain viable.
“When”: Even as I-526 and I-526E numbers show a growing pipeline backlog, data from Department of State continues to moderate our expectations for how quickly that backlog could reach the point of claiming all available annual visas and thus triggering Visa Bulletin retrogression. In May 2024 DOS had reported nearly 1,000 post-RIA applicants already registered at the National Visa Center, but also noted that EB-5 applicants were taking 4-9 months from NVC notification to interview scheduling. As it turned out, Department of State did not manage to schedule any interviews for reserved visas until August 2024 – and then only four High Unemployment visas (“RH”) were issued in Vietnam. (See Monthly IV Issuances and p. 14 of minutes from the October 2024 AILA DOS Liaison Committee Meeting. On the status adjustment side, DOS reported that only 17 reserved visas had been issued through AOS by May 2024.)
The timing of Visa Bulletin retrogression has been pushed back by visa-stage delays on top of a sluggish process at USCIS. IIUSA’s FOIA request indicated that as of early July 2024, only 478 Rural I-526E and 240 High Unemployment I-526E had been approved – not near the number needed to generate qualified applicants for all the 4,200+ rural visas and 2,100+ high unemployment visas available in FY2025. I expect I-526E approval volumes to increase dramatically going forward, as USCIS likely moves adjudication capacity from the disappearing pre-RIA backlog onto the thousands of pending post-RIA I-526E. But I-526E processing speed now may come too late to maximize FY2025 reserved visas, considering the slow process remaining following I-526E approval. I currently do not expect the Visa Bulletin to move for EB-5 set-aside categories in FY2025. This could be good and bad for EB-5.
Slow-walking the EB-5 set-aside backlog creates a mix of opportunity and confusion. So long as the Visa Bulletin does not announce cut-off dates for EB-5 set-aside categories, new EB-5 investors in the U.S. can continue to enjoy the window to concurrently file I-485 with I-526E, regardless of where they were born, and thus secure valuable travel and employment benefits that will remain potent even through any future EB-5 retrogression. However, people may be confused into thinking that they’re not entering a serious backlog situation with respect to green cards, just because not yet flagged yet in the visa bulletin.
Meanwhile, October brought good news for the over 30,000 retrogressed applicants in the EB-5 Unreserved category. FY2025 will likely have over 11,000 Unreserved visas available to distribute, thanks to including unused reserved visas carried over from FY2023. While Department of State has not yet announced the annual limits for FY2025, USCIS recently updated the AOS FAQ page to say: “The employment-based (EB) annual limit for fiscal year (FY) 2025 will be higher than was typical before the pandemic, though lower than in FY 2021-2024. We are dedicated to using as many available employment-based visas as possible in FY 2025, which ends on Sept. 30, 2025.”
Just a reminder to sign up for this week’s IIUSA webinar New EB-5 Data and Emerging Trends on I-526/E Filings, Adjudications, and Processing Times on Wednesday October 2 at 12 ET. We’ll discuss findings from the project undertaken by Li Lee with leadership from Christine Chen and eleven regional center operators to collect and analyze data on actual I-526E and I-956F processing times (report now available here). We’ll also present critical new TEA backlog information that IIUSA just received in response to a FOIA request spearheaded by Brandon Meyer (report now available here). How full are the queues for EB-5 visas? At what rates are the queues advancing, and in what order? The new data provides essential intel for regional centers and project companies considering their future offerings and markets, and for prospective and current investors concerned about timing.
And now another important data drop, as USCIS has added all EB-5 Set-Aside categories for the first time to the report of pending employment-based I-485 published monthly at the USCIS Immigration and Citizenship Data page.
Pending Applications for Employment-Based Preference Categories as of August 3, 2024 (XLSX, 109.41 KB) is wonderfully timely, providing comprehensive I-485 inventory data just a few weeks old. The report now lists pending EB-5 I-485 inventory itemized according to visa category (Unreserved, High Unemployment, Rural, Infrastructure), petitioner priority date (month year), and petitioner country of chargeability (China, India, Mexico, Philippines, or Rest of World). I-485 can now be filed concurrently with I-526/I-526E, so this report is effectively another view into I-526/I-526E receipts by country and TEA category. It’s limited to the portion of investors who are in the USA pursuing status adjustment, not including demand from abroad, but has the advantage of being very recent, and updated monthly.
The August I-485 report reflects late-breaking EB-5 TEA demand trends, and shows continued strong demand for rural TEA investments. (9/20 UPDATE: The chart originally posted here showed a more dramatic trend that resulted not from reality, but from the fact that I made an error in copying and pasting from one spreadsheet to another. Thanks to a vigilant reader who checked my work and found the error!)
The August I-485 report surprised me by recording some petitions in the Infrastructure category. The exact numbers are small, redacted with a “D” (meaning <11) in every month they appear. But still interesting, as I had thought that the Infrastructure category wasn’t being used at all. It’s also interesting to compare the reported I-485 inventory (which includes principals plus family) with our latest data for I-526/I-526E filings through early 2024.
The August I-485 report includes data for EB-5 Unreserved, which is interesting to compare with past reports, to get a sense of who exited the inventory by getting visas over time. (While keeping in mind that the pending inventory is not only reduced by visa issuance, but also expanded as new applicants file I-485.)
I’ve been tracking the monthly I-485 reports since February 2024 (when this report format was first introduced), and have seen USCIS struggle with how to report the EB-5 numbers. The February report only recorded EB-5 priority dates through 2022, the April report had 2023 and 2024 priority dates but only for ROW and all categorized as Unreserved, the May-to-July reports added a lump row for Set-Asides, and August finally figured things out and has data individually recorded for each TEA category and country. The monthly I-485 pending inventory is a very valuable report, and I look forward to tracking ongoing updates.
As I prepared Monday’s post on the Visa Bulletin, I looked at the number 9,158. This number represents 9,158 Chinese investors plus family who contributed at least $500,000 per family in 2014/2015 for the chance to qualify for an EB-5 visa. The Visa Bulletin showed “C” – no restriction – for China EB-5 through 2014 into the first half of 2015 (only beginning to establish cut-off dates in May 2015, and even then only implying a two-year wait with a 2013 date). How many of those people realized that they’d still be here a decade later, visa-less, a statistic on the 2024 NVC waiting list? Visa availability problems were predictable in retrospect, considering the 25,000 I-526 filed in 2014/2015, but we didn’t talk much about pipeline visa demand in those days. In honor of everyone taken sadly by surprise, and hoping not to repeat that history, we are more careful now to track and report not only the visa-stage demand reported in the visa bulletin, but also on pipeline demand coming up from I-526/I-526E filings.
I’m happy to report another important addition to the treasury of I-526/I-526E receipt data, with detail on visa category and petitioner county as needed for visa pipeline analysis. This dataset is courtesy of the efficient Joey Barnett of WR Immigration, who managed to extract a record-quick Freedom of Information Act response from USCIS, and immediately and generously made the full record available to the public. The data is published in a blog post here: “Exclusive New EB-5 Filing Data on Rural v. High Unemployment Area Demand as of April 2024!” You’re invited to join Joey Barnett and Charlie Oppenheim in discussing the data during the next edition of The Bulletin – Chatting with Charlie: EB-5 Investor Outlook on September 26, 2024.
Prior to the WR Immigration FOIA request, the most recent publicly-available TEA-and-country-specific data was from AIIA FOIA Series: Updated I-526E Inventory Statistics for 2023. The AIIA FOIA data was monthly through the end of 2023, and highlighted a handful of high-demand countries. The WR Immigration FOIA data is annual, but extends through the first part of 2024 and lists results for every single petitioner country.
The comprehensive county-specific detail in the WR Immigration FOIA provides interesting material for the question “where are regional centers finding EB-5 investors these days?” I see that AIIA already has a post up from this angle.
For backlog analysis, the WR Immigration FOIA is critical because it covers at least part of the great filing surge of Q2 2024, when 1,879 I-526 and I-526E were filed. We’ve needed to know where those 1,879 people came from, and where they invested, to help get a handle on potential TEA and country-specific backlogs. And now we have more information about it.
It’s tricky to date FOIA responses, because USCIS only reports the date that they queried the database, leaving us to guess how up-to-date the database was at that point. The WR Immigration FOIA is dated as of April 18, 2024. Comparing the FOIA totals with the totals that USCIS ended up officially reporting, we can conclude that the WR Immigration FOIA report captures cases filed through about February/mid-March 2024.
I’ll let charts tell the story of what happened during the recorded part of the March 2024 filing surge, including how Rural demand surged ahead for the first time (particularly thanks to China), while High Unemployment demand dipped but remained sufficiently strong to continue to dominate the cumulative inventory. (The charts combine AIIA’s FOIA data for 2022-2023 with WR Immigration’s FOIA for 2024.)
And finally, here’s the table that highlights my concern in the data: what’s going to happen to these data points when they’re people with families approaching the visa window?
For a rough estimate of future visa demand from the I-526 pipeline, I conservatively multiply the I-526 receipts by 2. This underestimates typical family sizes, but considers the possibility of denials and other attrition. And then I look at estimated cumulative visa demand and future visa supply and think about the balance.
FY2025 is carryover year, with extra visas available. What would happen in the best-processing case/worst-visa-case scenario that the entire pipeline of investors filing I-526 up to March 2024 reached the visa stage in FY2025? Looking at the numbers, I see that they would find enough rural but not enough high unemployment visas to accommodate them. In that case, FY2025 would end with Visa Bulletin cut-off dates for high unemployment, and a backlog going into FY2026 without the promise of carryover from unused HU visas. In real life, slow I-526E processing looks likely to continue to slow-walk the backlog (as it has been slow-walked to date) such that FY2025 doesn’t get sufficient applicants to max out FY2025 visas. In that case, the visa bulletin would not move yet in FY2025, and FY2026 would also have extra visas. In that case, the pipeline that had built by early 2024 would be getting visas in 2026 and years beyond.
If I were an investor from China or India, I would look not only at the China or India pipeline, but also at ROW (meaning applicants from the “rest of world”). ROW is important, because the number of annual visas available to me, as an applicant subject to country cap, is equal to 7% PLUS a share of any visas not absorbed by ROW. Every one ROW visa issued is one fewer visa that might be available to my country over the country cap. The ROW pipeline is also a target for people wondering if it’s possible to diffuse demand pressure from TEA set-aside categories. (But notice that High Unemployment shows enough demand from China and India alone to absorb 2+ years of visas even if they were the only applicants, even if 100% of the documented ROW HU pipeline left the HU category and chose to receive Unreserved visas instead.)
Still have questions about what the numbers mean? Note that the FAQ I just finished addresses topics such as which countries are affected by country cap limits and retrogression, how applicants may choose a TEA or Unreserved category, and how annual EB-5 visa availability gets calculated.
A project I’ve been working on for the past few months is now live: “Essential EB-5 Visa Allocation Questions and Answers.” My dream has been to put together an FAQ that tackles the basic questions that confuse discussions about EB-5 visas – addressing which EB-5 categories are available and to whom, how visas get allocated and when, how country caps work, what retrogression is and whom it affects, what choices applicants can make about visa allocation, and how EB-5 visa supply works.
My goal was not to compile off-the-cuff responses, but to create a solid work of reference where short answers would each be followed by a robust reference section with links to places where the topic has been addressed in the law, USCIS policy and guidance, USCIS or DOS Q&A or stakeholder meetings, litigation, etc. If you read an answer and think “but that’s not what I heard from X,” you’ll be able to scroll to the base of the post and follow the reference links, see where I found the information presented, and draw your own informed conclusions. If you read an answer and think “ok I understand A but this raises a question about B,” you can follow the cross references to read other related Q&A.
The current content of the Q&A is dated as of August 2024. I look forward to making this a dynamic resource, with updates as new guidance and data emerge over time.
This project required a lot of work, first in expanding and reviewing the research I’ve been collecting over my years in EB-5, then in striving to distill this background into a basic Q&A format. I was able to complete the work thanks to finding a patron who shared the vision. CanAm commissioned the FAQ, reviewed it, and has now published it as a PDF whitepaper, plus divided into individual website postings for convenient reference, and with a Chinese translation. In a world full of sales-y clickbait, I’m thankful to find someone willing to invest in what I want to write – content that’s not necessarily fun or profitable, but carefully informative and aiming for the common good.
Here follows a quick quiz, which you can take to help judge whether you already know and agree with everything in the Q&A, or will benefit from following the links and checking out my references:
True or false: TEA investors with 2021 priority dates can receive TEA set-aside visas.
True or false: TEA investors with 2023 priority dates can only receive TEA set-aside visas.
True or false: Direct EB-5 investors have access to different visas with different timing from regional center investors.
True or false: No one country can get more than 7% of EB-5 High Unemployment or >7% of EB-5 Rural visas.
True or false: High EB-5 demand means that Taiwan and South Korea may have visa bulletin cut-off dates in the future.
True or false: Visa applicants from low-demand countries with no country cap can never experience visa bulletin retrogression and visa wait times.
True or false: Filing I-485 locks in access to an EB-5 visa as of the time of filing I-485.
True or false: EB-5 is likely to have many more than 10,000 visas in most future years, thanks to rollover and carryover.
True or false: The time of choosing an EB-5 investment and filing I-526E is the only point at which the EB-5 investor can participate in visa allocation decisions.
The correct answer to each of these questions is “false.” Surprised? Check out the FAQ to read more! And if you still have questions after reviewing the FAQ, or think of Q that should be added, reach out to CanAm or me to discuss further. We want to make this as useful as possible to the community, to help put everyone on the same page with solid background for talking about EB-5 visas.
October begins a new fiscal year, with a new stock of visas available to EB-5 applicants. The October 2024 Visa Bulletin includes significant movement for EB-5 dates for China and India. To understand this movement, it’s necessary to look at the dates in context of what they represent – visa applicants with priority dates.
Does a final action date of July 15, 2016 for China mean that most Chinese EB-5 applicants with priority dates earlier than July 2016 can expect visas shortly? Does a final action date of January 1, 2022 for India mean that most India-born EB-5 investors with priority dates in 2021 and earlier can expect visas shortly? Looking at the number of applicants in progress compared with FY2025 visa availability, the answer is “maybe” for China, and “no, certainly not” for India.
First, consider the supply of Unreserved visas available to allocate this year. The precise numerical limit has yet to be announced (it will eventually appear here), but FY2025 will have at least the base allocation of 140,000*0.071*0.68=6,759 new-issue Unreserved EB-5 visas, plus an additional 4,000+ visas thanks to carryover from a portion of Reserved visas not used in FY2024. (That is, unless the IIUSA lawsuit succeeds in challenging the carryover law. See slide 18 here for additional analysis.) So, we’re potentially looking at around 11,000 Unreserved visas available in FY2025, of which India can expect about 7% (770), and China with its old priority dates can expect 7% plus what’s leftover after India and as many ROW visas as consulates can manage to issue. I guess that at least 4,000 to 5,000 Unreserved visas will end up being available to China in the coming year.
And now let’s consider the Unreserved applicants lined up for FY2025 visas. Potential applicants can be in multiple places – still with I-526 pending, with I-526 approval but waiting for NVC transfer, with pending I-485, and/or registered at the National Visa Center for consular processing. But let’s just look in one place – at applicants registered at NVC as of May 2024, according to a chart provided by Department of State and included on p. 3 of “Insights from the State Department: Ten Key Takeaways on the Latest EB-5 Data and Visa Processing from the 2024 IIUSA EB-5 Industry Forum” (Published: June 6, 2024).
The following sections consider what this table means for India Unreserved, China Unreserved, and 5th Set Aside in the Visa Bulletin.
India — EB-5 Visa Applicants vs Visa Bulletin Dates
Table 1 above has a stark message for India: 1,834 applicants with 2019 and earlier priority dates were still waiting at NVC for Unreserved EB-5 visas as of May 2024 – and that’s only at NVC, not counting 1,000+ Indians waiting for I-485 status adjustment as of April 2024, or potential applicants waiting for I-526 approval and NVC transfer. (Note: there is potentially significant overlap between the I-485 list and both the NVC list and the pending I-526 list.)
The crowd of Indian applicants reported by DOS in May certainly did not just disappear between May 2024 and today. Some registered applicants may have given up or switched categories by this time, but it’s improbable that they suddenly all got tired of waiting and gave up en masse. 2018 and 2019 priority dates are not that old, and a number only became qualified recently given I-526 approval timing. 1,800+ Indian applicants could not have received visas in the last months of FY2024. (As of May, DOS reported having already issued 864 of the approximately 995 visas available to India in FY2024 under the country cap.) Therefore, it’s likely that at least 1,700 India-born applicants with 2019 and earlier priority dates are still waiting today. With likely fewer than 800 Unreserved visas available to India in FY2024, Department of State can’t realistically get even close to allocating visas even all qualified Indian applicants NVC with 2019 and earlier priority dates this year, much less be able to move on to 2020 and 2021.
I can’t guess what the October 2024 visa bulletin DOES mean for India. What could it mean, except that DOS made a typo, or for some reason anticipates issuing a few lucky visas out of priority date order? The typical reason for moving Visa Bulletin dates — to “stimulate demand” i.e. push USCIS to adjudicate more petitions or potential applicants to submit documents — wouldn’t make sense here since NVC reports already having plenty of applicants. What we can see, from pending applicant data, is that the October 2024 Visa Bulletin cannot possibly mean a message that the pre-December 2020 India backlog is clear, or that the majority of 2020 and 2021 India priority dates can expect EB-5 visas soon.
EB-5 visa issuance to India has been confused by the fact of non-FIFO I-526 processing. Some Indians with 2019 priority dates have visas already, while others are still stuck waiting for I-526 approvals or transfer to NVC. The India backlog is also complicated by surges – for example of all I-526 filed by Indians in 2019, 50% were filed in the single month of November 2019. No wonder Department of State struggles to maintain queue discipline for India EB-5. For Indian applicants trying to think through the “where am I in the queue” question, I recommend a dataset recently shared with me by a blog reader, and copied starting in Row 467 of the Pre-RIA Demand tab in the Excel sheet I keep linked to the top of the EB-5 Timing page. My reader used FOIA to request an accounting of pending and approved status for I-526 filed by Indians between January 1, 2017 and April 1, 2022. Looking at this report, you can see the pattern of demand over those months, and see also how I-526 processing – approving a few in each month while leaving others behind – can have resulted in date confusion at the visa stage.
China — EB-5 Visa Applicants vs Visa Bulletin Dates
Table 1 above shows that the National Visa Center still has a significant number of China-born applicants with 2015 priority dates, and sufficient applicants with 2016 dates to absorb years-worth of visas. Demand in 2015 and 2016 came in surges, so I took an extra step to divide the China inventory by quarter. The following table shows a quarterly estimate created by taking the proportions for worldwide I-526 receipts reported by quarter in 2015 and 2016, and applying those proportions to data by fiscal or calendar year for China I-526 receipts and China NVC inventory. I included I-526 receipt numbers, as background for the number of Chinese who started the process. (Based on I-526 inventory status and recent denial rates, I will guess that most Chinese applicants with 2015 and 2016 priority dates who are ever going to reach the visa stage are registered at NVC and/or on pending I-485 by now.) The table includes information on pending I-485, which USCIS reports by month of priority date.
Priority Date
Total I-526 Receipts from China-born investors
China-born applicants registered at NVC as of May 2024
Pending I-485 for China-born applicants as of April 2024
Before 2015
588
85
2015 Q2 Jan – Mar 2015
1,570
1,167
23
2015 Q3 April – June 2015
1,682
1,250
36
2015 Q4 Jul – Sep 2015
4,471
3,323
162
2016 Q1 Oct – Dec 2015
3,808
2,830
319
2016 Q2 Jan – Mar 2016
391
546
103
2016 Q3 April – June 2016
1,415
1,976
332
2016 Q4 Jul – Sep 2016
5,334
7,447
1,165
2017 Q1 Oct – Dec 2016
3,310
4,621
778
Total with priority dates prior to January 2016
9,158
625
Total with priority dates prior to June 2016
11,680
1,060
Total with priority dates prior to January 2017
23,748
3,003
Looking at the distribution by quarter, I notice the surge of demand from July to December 2015, followed by smaller crowd from January to June 2016, followed by another big surge in July to September 2016 (the last big peak, as we now know). No wonder the Visa Bulletin spent years in late 2015, but now foresees a leap through the first half of 2016, and then slow again through the second half of 2016.
Looking at the large number of total applicants as of mid-2024 with priority dates prior to January 2017, I can see why Department of State had no need to advance Chart B Dates for Filing to encourage even more applicant filings in those dates. It makes sense that the October 2024 Visa Bulletin retrogressed Chart B to prevent even more additions to that already-large crowd.
I see that as of May 2024, there were around 12,000 China-born applicants ready to go with priority dates before July 2016. Could Department of State think it’s possible to get anywhere near applicant #12,000 by the end of the coming fiscal year? It’s just conceivable they might get close, considering that China-born applicants may have gotten another 3,000+ visas June-September 2024, that China-born applicants could have access to 5,000 or so visas in FY2025, and that high-volume drop-out rates and denials among old 2015 priority dates are plausible. On the other hand, if all those applicants recorded at the National Visa Center and on pending I-485 in mid-2024 do indeed represent active applications from people still able and willing to claim visas, then it will take several years to issue visas to everyone with pre-July 2016 priority dates. In that case, neither Chart A nor Chart B would need to move again for China any time soon.
The major “what if” factor for China Unreserved at this point is the volume and pace of demand for Unreserved visas from the Rest of the World, since this directly constrains the supply of visas every year to China. For more data, see the Pre-RIA Demand tab in the Key EB-5 Backlog Data file, which I keep linked to the top of my EB-5 Timing page and update regularly. And keep an eye on the discussion about whether post-RIA Rest of the World applicants should be encouraged to select Unreserved visas rather than the set aside visas for which they also qualify.
Post-RIA EB-5 Visa Applicants vs Visa Bulletin Dates
The October 2024 Visa Bulletin still has “C” across the board in the 5th Set Aside categories, meaning no priority date restriction yet on who can get final action or file I-485. Again, this is a function of the number of applicants ready to go at the visa stage. Scroll back up to Table 1 at the top of this post, and see that <1,000 applicants were registered at NVC with 2022 or later priority dates as of May 2024. That’s not sufficient applicants to get anywhere near absorbing the 4,000+ rural visas and 2,000+ high unemployment visas that were available in FY2024 and will be available in FY2025, even if all were rural or high unemployment applicants. And the inventory of qualified post-RIA visa applicants likely isn’t much greater now, considering the low volume of I-526E approvals since May. When will the Visa Bulletin change for 5th Set Aside categories? The answer depends on USCIS, and when USCIS can manage to advance more applicants to the visa stage by approving more I-526E.
FY2024 Q3 data shows minimal movement for post-RIA I-526/I-526E petitions, and continuing high processing volume and backlog reduction for pre-RIA I-526 and I-829. Receipts fell in Q3, especially for I-526E, but not as much as I expected after the April 1 USCIS form fee increase.
USCIS has worked aggressively in 2024 to clear the inventory of pending pre-RIA forms. By June, USCIS was down to a net backlog of only 100 I-526 petitions, and had reduced the I-829 net backlog to 5,000. (“Net Backlog is Gross Backlog minus any customer induced delays (i.e. RFE, intent to deny, etc.) and visa unavailable cases.”) It is likely that as of today, USCIS has already at least assigned nearly every pre-RIA I-526, except for I-526 from Chinese investors who don’t have visas available. If recent volumes continue, every I-526 and I-829 pending today will have been processed before June 2025. Kudos to IPO staff and Chief Alissa Emmel for making this happen! Meanwhile FY2025 visa bulletins will be interesting, as Department of State works to match FY25 visas to the influx of new Unreserved applicants from I-526 approvals.
Processing activity for post-RIA investor petitions picked up slightly in Q3, but is still extremely low in context of the I-526E backlog and the number of reserved visas waiting for applicants. Two factors give me hope for a major boost to I-526E processing numbers coming soon: the uptick in I-956F processing in Q3 (with I-956F approval being precursor to I-526E approval), and the fact that the disappearance of the I-526 backlog is about to free up major adjudicator capacity that might be moved to I-526E processing. USCIS processed nearly 6,000 I-526 in the past 12 months, and such productivity would quickly decimate the I-526E backlog. I’m optimistic that USCIS/Department of State will at least be able to issue all Reserved visas available in FY2026, considering the processing potential. However, low processing volumes to date may mean that some FY2025 Reserved visas will go unissued for lack of qualified applicants advanced in time.
And a few other points of interest. Both I-526 and I-829 denial rates were down in Q3, to 25% and 5% respectively. A handful of I-526E denials were reported for the first time in Q3 — and I expect to see more soon, considering that USCIS denied 25 I-956F project applications so far this year. The number of I-956 regional center application filings hardly dropped in Q3, despite the massive filing fee increase. And apparently USCIS approved one I-924 in Q3. Mysterious!
I’ve copied below charts to highlight salient features and trends, as well as updating my Processing Data page and Key EB5 Backlog Data excel file. And heads-up for additional data and analysis coming in the next few weeks.
USCIS still does not report I-526E processing times, but IIUSA has stepped into the gap and worked with regional centers to collect and analyze a large database of anecdotal evidence for actual I-526E and I-956F processing times. I’ve been assisting Lee Li with this important project, and look forward to the results to be released shortly. You’re invited to join us for a webinar on October 2, 2024 on “New Data and Emerging Trends: I-526/I-526E Filings, Adjudications, and Processing Times”
AIIA continues the critical effort to extract information from USCIS on the breakdown of post-RIA I-526 and I-526E filings by TEA category and applicant country of birth, to help keep a pulse on potential visa backlogs. They hope for a response next month to the FOIA request covering the filing surge in January to March 2024. (Currently, we only have data through December 2023.)
I’ve been working on a major project to research and write FAQ covering questions about EB-5 visa availability and allocation. The 26 short articles that comprise this project will be published next week – look for an announcement and links here next week Tuesday.
On the visa front, Department of State announced that it succeeded in issuing all EB-5 Unreserved visas available for FY2024 – good news for pre-RIA investors, and particularly for long-suffering Chinese investors who were able to pick up a large number of FY24 visas thanks to the productive consulate in Guangzhou. I will write separately about the visa outlook for FY2025 (which is unfortunately currently subject to litigation, as discussed by IIUSA and AIIA).
USCIS is in process of terminating many regional center designations for “purely administrative non-compliance” – meaning that the regional center didn’t do anything actively wrong, but left administrative steps undone. The most common scenario is a regional center that has not and does not intend to raise new EB-5 investment under the new law, and therefore has not paid the annual Integrity Fee required under the new law. (Also possible: a piece of paperwork was missed accidentally either by the regional center or USCIS in the confusion of a new RIA procedures. At this point USCIS is just sending Notices of Intent to Terminate, not final terminations yet, giving opportunity for clarification.)
USCIS understands that regional centers may not want or need to stay in business forever, and has attempted to set up a system that allows good faith investors to stay eligible for EB-5 benefits even if their regional center sponsor exits the program.
The options, process, and conditions for protecting EB-5 investors following regional center termination are described in the law at INA 203(b)(5)(M), elaborated in the USCIS Policy Manual Volume 6 Part G Chapter 3(E) and Chapter 8, and further discussed in multiple sections of the EB-5 Questions and Answers (updated July 2024) on the USCIS website and in “Questions and Answers Updated March 19 2024” posted by the CIS Ombudsman. I painstakingly parsed and sorted this volume of content, and organized it into tidy table format. For others who’d like to be spared this trouble, and have a handy summary for reference and analysis, here is my table “Interpreting Subsection (M) Investor Protections.” The table format helps me to process this complicated and critically important topic, and is designed to facilitate considering: what has been said, and what still needs to be clarified?
Investors face several possible scenarios following regional center termination:
No Action Required: The investor remains eligible for EB-5 benefits, and neither the investor nor the NCE need take any action or make any amendment in response to the regional center termination
Action Required and Allowed: The investor can stay eligible for EB-5 benefits, but only if an amendment is filed and approved
Amendment Option A: the investor’s NCE associates with another approved regional center, OR
Amendment Option B: the investor makes a qualifying investment in another commercial enterprise
No Action Allowed: The investor has no option to stay eligible for EB-5 benefits (this applies if the investor is considered a knowing participant in the conduct leading to regional center termination)
See my table for detail on each scenario. Generally the first no-action scenario is the ideal – if the investor can simply continue his or her immigration process with no effect from the regional center termination, and no need for any amendments by the investor or the NCE. I’m copying below what USCIS has said so far about the specific conditions under which that no-action path is open to the investor. Note that the conditions are different for pre-RIA and post-RIA investors, and depending on the progress of the project/investment. (Pre-RIA investors rightly get extra protection from terminations resulting from noncompliance with post-RIA requirements. All investors have more protection once having satisfied applicable job creation and sustainment requirements. Investors with project trouble on top of the regional center termination may not only need but welcome amendment options that are not normally allowed under the material change policy.)
Excerpts from USCIS guidance on conditions for maintaining investor eligibility following regional center termination (When are the amendment options under INA 203(b)(5)(M) (“subsection (M)”) required, and when can EB-5 investors stay eligible after regional center termination even without an amendment to the regional center affiliation or investment?)
Conditions under which the investor WILL need to make an amendment under subsection (M) following regional center termination — either a new regional center affiliation or new NCE investment:
“for both pre- and post-RIA investors, if their regional center is terminated or their new commercial enterprise or job-creating entity is debarred and their capital investment project has failed or will only create less than the requisite number of jobs, they generally will not remain eligible and may use the protections under INA 203(b)(5)(M) to amend their petition to retain eligibility.” (Q#4 in “Retaining Eligibility” at USCIS Q&A)
Conditions under which pre-RIA investors in a terminated regional center may remain eligible as-is and NOT need to take action under subsection (M) in order to stay eligible:
“where an investor’s capital remains invested and at-risk with their new commercial enterprise and the requisite jobs have been or will be created in accordance with their existing business plan, termination of their associated regional center for failure to pay the EB-5 Integrity Fund fee or for reasons related to a different new commercial enterprise would generally not, by itself, negatively impact the investor’s eligibility.” Policy Manual 3E
“In general, pre-RIA investors may remain eligible if their project is complete or will be completed in accordance with the comprehensive business plan, with sufficient job creation for all investors, and the investor’s capital has been and will be sustained through the requisite 2-year sustainment period of their conditional residency.” (Q#4 in “Retaining Eligibility” at USCIS Q&A)
“where regional center termination is based on purely administrative noncompliance that does 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 the terminated regional center continues to be eligible for classification as an immigrant investor, notwithstanding the regional center termination.” (Q#7 in “Regional Centers” at USCIS Q&A) For example “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” (Q#3 in “General Implementation” at USCIS Q&A) “The phrase “purely administrative noncompliance” is not intended to be a new termination category, or a term defined by USCIS, but rather a plain language description of the potential circumstances of noncompliance on the part of regional centers that are not typically related to petitioner eligibility (illustrated in the context of failure to pay the EB-5 Integrity Fund fee required by the RIA). USCIS will evaluate the potential impact of noncompliance by regional centers on associated investors on a case-by-case basis.” (Q1 at “Ombuds Q&A”)
Conditions under which post-RIA investors in a terminated regional center may remain eligible as-is and NOT need to take action under (M) in order to stay eligible:
“In general, post-RIA investors may continue to be eligible if their capital remained invested for at least 2 years after being placed at risk under applicable requirements and satisfied the job creation requirement before termination or debarment.” (Q#4 in “Retaining Eligibility” at USCIS Q&A)
“You may continue to be eligible notwithstanding the termination of your regional center where sufficient jobs were already created and your capital was invested for at least 2 years under applicable requirements before the termination of your regional center and subsequent denial or revocation of the associated Form I-956F.” (Q#5 in “Retaining Eligibility” at USCIS Q&A)
Conditions under which amendments are NOT allowed, even if desired:
“The amendment options in (M) are only available to investors following RC termination or NCE or JCE debarment. Project failure, on its own, is not a basis to retain eligibility under (M). … If you wish to have your NCE reassociate with another regional center or make a qualifying investment in NCE because of a project failure separate from termination or debarment, you must file a new petition for classification based on post-RIA eligibility requirements.”(Q#16 in “Retaining Eligibility at USCIS Q&A)
An investor cannot request their regional center to be terminated in order to gain access to the amendment options under (M). However, a regional center may withdraw and request USCIS to terminate its designation. (Q#14 in “Retaining Eligibility at USCIS Q&A)
“Once you have responded within 180 days to the notice and identified that you either remain eligible notwithstanding the termination or debarment or that you are amending your petition based on the reassociation of your new commercial enterprise (NCE) with an approved regional center or you having made a qualifying investment in another NCE, you generally may not further amend your petition in order to retain eligibility on another basis.” (Q#12 in “Retaining Eligibility at USCIS Q&A)
“any investor who was a knowing participant in the conduct that led to the termination or debarment may not benefit from section 203(b)(5)(M) of the INA (for example, such would be the case if the petitioner knew of fraud and failed to terminate or report an agent that is engaging in fraud for the EB-5 entity).” (Q#1 in “Retaining Eligibility” at USCIS Q&A)
See my table “Interpreting Subsection (M) Investor Protections” for additional detail on amendment options following regional center termination. I will continue to update the linked document as USCIS releases additional guidance.
Today’s policy update to the USCIS Policy Manual Volume 6 Part G adds a minor resource link to Chapter 2(C), edits terminology in Chapter 4(H)(2) and Chapter 5(E), and inserts major sections of new policy:
“Special Considerations for Investors Who Filed Their Form I-526 Petitions Before March 15, 2022” in Chapter 3(E) Good Faith Investors Following Program Noncompliance by a Regional Center, New Commercial Enterprise, or Job-Creating Entity
Chapter 8 – Sanctions and Discretionary Determinations
I sense the good work of the CIS Ombudsman behind the scenes of this policy update, which is relevant and responsive to live stakeholder questions — not simply regurgitating statue without interpretation or practical application. Regional centers may not be entirely happy with the sanctions policy, but it does go into admirable detail about how USCIS interprets the specific conditions and process for sanctioning Regional Centers, NCEs, and JCEs. IIUSA has invited members to a webinar on July 18 at 12 ET to discuss the new policy guidance and how to deal with a recent spate of Notices of Intent to Terminate. Thankfully for investors, the pre-RIA investor protection policy newly-added to Chapter 3(E) is even more specific and generous than the interpretations described in the 2023 USCIS website Q&A, rewarding effort by AIIA as well as IIUSA and industry groups to convey investor questions and concerns through the Ombudsman. I will write in more detail about both policies. In the meantime, I am sharing my folder of all EB-5 Policy Manual iterations, and a redline version that I made using Word document comparison to show changes between today’s July 16, 2024 EB-5 policy and the previous version published October 26, 2023.
Today USCIS published form receipt and processing data for FY2024 Q2 (January to March 2024) on the USCIS Immigration and Citizenship Data page. I’ve updated my Processing Data page with all the FY24 Q2 EB-5 numbers, and provide charts in this post to highlight the big news.
New EB-5 filings skyrocketed in January to March 2024. Meanwhile, IPO took a large bite out of the EB-5 backlog with impressive productivity that recalls the good old days of 2018. We’re setting up for a busy and crowded time at the EB-5 visa windows in 2025 and beyond. (In other news, I’ve also updated my data repository with key visa-stage EB-5 numbers shared by Department of State at the IIUSA conference last month, to be discussed further in forthcoming articles. See IIUSA’s conference slides and a nice follow-up analysis by Lee Li that gives further detail and clarification.)
Post-RIA I-526 and I-526E Receipt Trend
USCIS reports that a whopping 1,810 I-526E and 69 I-526 were filed last quarter.
Counting up the quarterly reports from April 2022 (following the passage of RIA) to March 2024, we can see that USCIS has reported a cumulative total 5,344 post-RIA I-526 and I-526E filed, and 429 processed. (As a side note, the cumulative count conflicts with the FY24 Q2 period-end pending count. In the past, I’ve noted that the pending number ends up skewed after filing surges – I guess because last-minute end-of period receipts get counted as receipts in the period but only added to pending in the next period.)
In context, since RIA passed two years ago, EB-5 investors have brought at least 5,344*$800,000=$4.275 billion dollars into the U.S. economy. This investment was incentivized by the hope that approximately 5,344/.35=15,000ish visas will be available to these investors plus their spouses and children. (35% is an historical average of principals in EB-5 visas issued.) The number of post-RIA applicants who actually make it to an EB-5 visa will likely be significantly smaller due to country-specific variation and attrition, but the size of the upfront hope is impressive and sobering. Congress has not set aside sufficient annual visa numbers for this level of willingness to invest in economic growth and job creation. We don’t yet know how all I-526E filings break down by country or TEA category (AIIA has another FOIA request in progress for numbers since since November 2023), but this is a lot of prospective EB-5 visa applicants to fit in any lane, including Unreserved given the pre-RIA backlog. EB-5 visa advocacy should already be an urgent priority.
IPO Processing Productivity
As I’ve been reporting based on unofficially obtained data, IPO has made a quantum leap in processing productivity. The first chart illustrates recent processing volume in historical context. The second chart compares FY24 Q4 processing productivity against the size of the backlog for select EB-5 forms. If IPO keeps processing at this rate, the pre-RIA I-526 and I-829 backlogs at USCIS will be gone within 12 months. And then adjudicators currently proving ability to turn out thousands of decisions per quarter will be able to shift focus and make quick work of the post-RIA inventory and incoming receipts. IPO still hasn’t published the RIA-required timely processing fee study, but even better it has gotten on track to actually realize the RIA timely processing goals in the foreseeable future.
How long do EB-5 funds stay invested? I’ve approached this hot question from several angles, including a previous blog post on the intersection between immigration timing and investment timing, and a webinar with CanAm and Robert Divine about the sustainment period (CanAm’s write-up available here). Now I will try to clarify a factor behind some confusion in sustainment discussions: the fact that an EB-5 investment involves multiple layers and multiple timeframes, each subject to different terms and different USCIS requirements. This post defines the investment timeframes and applicable requirements for post-RIA EB-5 investors (people starting the EB-5 process after March 2022), and suggests questions for potential investors to ask about investment exit timing.
EB-5 Investment Flow Chart
A regional center investment involves at least two deals: one between the EB-5 investor and the new commercial enterprise (NCE) and one between the NCE and a job-creating entity (JCE) that deploys EB-5 capital in a project.
Typical EB-5 process steps (illustrated in the EB-5 Investment Flow Chart below)
EB-5 investor capital deposited in the NCE account
NCE uses EB-5 capital to fund a loan or make an equity investment in the JCE
The JCE spends capital in a project to cover project costs
The JCE repays loan or equity to the NCE (Optional: 4.1-4.2 The NCE reinvests EB-5 capital, if necessary for sustainment, and gets repaid)
EB-5 investor exit from the NCE
When discussing the EB-5 investment timeframe, often the investor assumes that we’re talking about the time from step 1 to step 5 – from the date he invests his money to the date he realizes a return. But when a regional center says “it’s a five-year deal,” this usually refers to the time from step 2 to step 4 – from the date the regional center issuer invests EB-5 capital to the date the issuer expects to be repaid. Meanwhile, when USCIS speaks of the 2+ year minimum “required investment timeframe” for sustainment, it is focused on the interval between step 3 and step 4 – starting from the date that an investor’s EB-5 capital is actually deployed in a project through the period that the capital remains deployed at risk.
Note: the “start date” for a USCIS-defined at-risk investment is later than the date of an investor’s deposit in the NCE account, while the investor’s repayment by the NCE is later than the NCE’s exit from a project. It might be only very little later, as when the NCE immediately transfers investor capital to the JCE, which immediately spends the money in a project, and the NCE goes on to repay the investor immediately after the JCE repays the NCE. However, Timeframe 1-to-5 could also end up years longer than Timeframe 2-to-4 or 3-to-4. If the project development process is lengthy or delayed, an individual investor’s funds might not be used until months or years after the date of the investment deposit. The deal between the EB-5 investor and NCE might have an exit significantly later than the NCE’s exit from its investment in the JCE, particularly in the past when immigration delay forced redeployment. With the large potential differences between investor, project, and USCIS timeframes for investment, it’s important to be clear about the different timeframes and to know which requirements and considerations apply to each.
Timeframe 1-to-5: Timeframe of the EB-5 investor’s investment in the NCE
The timeframe of the EB-5 investor’s investment in the NCE starts when an EB-5 investor deposits $800,000 or $1.05 million in the NCE and ends when the NCE repays/provides an exit the EB-5 investor according to the terms of the NCE offering.
The timeframe of the EB-5 investor-NCE deal CANNOT be guaranteed, per EB-5 rules. To quote precedent decision Matter of Izummi: “For the alien’s money truly to be at risk, the alien cannot enter into a partnership knowing that he already has a willing buyer in a certain number of years.” The USCIS Policy Manual at USCIS PM 6(G)2 explains that post-RIA capital does NOT count as invested capital if it is “subject to any agreement between the investor and the new commercial enterprise that provides the investor with a contractual right to repayment, such as a mandatory redemption at a certain time or upon the occurrence of a certain event, or a put or sell-back option held by the investor, even if such contractual right is contingent on the success of the new commercial enterprise, such as having sufficient available cash flow.” (See the Policy Manual for discussion of the limited redemption language allowable in the EB-5 investor-NCE agreement.)
USCIS rules give no ceiling to how long the NCE can hold EB-5 money, but they do define some minimums. USCIS rules for post-RIA investors specify that the EB-5 investor’s exit from the NCE can only be after job creation, after I-526 filing, and after the investment has been sustained “at risk” (i.e. deployed, not just in a bank account) for at least two years. For pre-RIA investors, the EB-5 investor exit must be at least after the investor has completed the two-year conditional permanent residence period.
One regional center offering has multiple investors, each with his or her own investment deposit date (which could be months or years apart). Therefore, a variety of individual investor timeframes will overlap the project timeframe and NCE-JCE deal timeframe in different ways. The NCE offering may or may not anticipate treating EB-5 investors as a group when deploying or repaying capital, despite the investors’ different start dates.
Timeframe 2-to-4: Timeframe of the NCE’s investment in the JCE
The timeframe of the NCE’s investment in the JCE starts when the NCE uses EB-5 capital to fund a loan or equity investment in the JCE and ends when the JCE repays/provides an exit to the NCE.
The duration of the NCE-JCE deal timeframe CAN be specified. USCIS rules allow the NCE-JCE deal to be a debt arrangement with a set term. Unlike the EB-5 investor-NCE agreement, the NCE-JCE agreement can have relatively firm redemption language. The EB-5 investor must look to the NCE’s investment horizon as reference for her own potential timeframe for exit.
The NCE’s investment in the JCE may be funded over time and can have a start date that pre-dates or post-dates the subscription of Investor X in the NCE. The prospective EB-5 investor should keep in mind that sales statements like “it’s a five-year deal” do not refer to directly to her prospective timeframe, but to the in-progress or future term of the deal between the NCE and JCE.
It can happen that a JCE repays the NCE early, before all EB-5 investors have finished their immigration-required minimum investment periods. In case of such timeframe mismatch, the solution is redeployment. EB-5 investors can still meet requirements so long as the NCE reinvests their funds in another project until the immigration-required sustainment period has been fulfilled (see USCIS PM 6(G)2).
It can happen that EB-5 investment reaches the JCE late, after the JCE has already finished spending money and creating jobs. Bridge financing provides a limited solution for project-investor timeframe mismatch. An EB-5 investor can potentially claim credit for contributing to a completed project and job creation, provided her investment is replacing qualifying bridge financing (see USCIS PM 6(G)2), and USCIS training materials on bridge financing). However, the most straightforward case for EB-5 credit is based on sequential timeline: EB-5 capital enters the JCE followed by job-creating activity.
For post-RIA investors, the USCIS-required sustainment timeframe starts when the investor’s full $800,000 or $1.05 million is “placed at risk” and ends a minimum of two years later.
To quote the USCIS Q&A on “Required Investment Timeframe” for post-RIA investors: “INA 203(b)(5)(A)(i) states that, to be eligible for classification, the investment must be ‘expected to remain invested for not less than 2 years’” and “For purposes of determining the date when the two-year period required by INA 203(b)(5)(A)(i) begins, we will generally use the date that the requisite amount of qualifying investment is made to the new commercial enterprise and placed at risk under applicable requirements, including being made available to the job creating entity, as appropriate.”
“Placed at risk” is a defined term in EB-5. An investment counts as “at risk” once these conditions have been satisfied: the full amount of investment is made available to the job-creating entity (not just sitting in a bank account, but in use), the JCE has business activity, and the investor has a risk of loss and chance for gain with no guaranteed return (see USCIS PM 6(G)2). For examples of cases where EB-5 investor funds were deposited in the NCE, but did not count as “at risk” because not fully deployed to the JCE, see the precedent decisions Matter of Izummiand Matter of Hoand non-precedent decisions such as APR052018_05B7203, APR022018_01K1610, JAN222021_04B7203, MAR032021_01B7203, and FEB242022_01B7203.
The start date for “at risk investment” could be interpreted as the date that the investor’s full $800,000 or $1.05 million is transferred from the NCE account to the JCE account. More conservatively, it could be interpreted as the date on which the JCE finishes spending EB-5 investor money, since that’s the date by which the investment has unambiguously been fully “made available to the job creating entity.”
As discussed above, the USCIS-required sustainment timeframe has a start date equal to or later than the date of the NCE’s investment in the JCE, which in turn is more or less later than the date of the EB-5 investor’s investment in the NCE. The investor ideally wants to seek an offering with an NCE-JCE deal slated to end comfortably more than two years later than the latest date the her invested capital could be deployed in the JCE. If the JCE repays the NCE earlier, then the investor will have to see her funds redeployed by the NCE in order to meet the 2+ year requirement. If the JCE repays later than the USCIS-required minimum investment period, there are no immigration consequences for the investor.
Conclusion: Questions for Prospective EB-5 Investors to Ask
When will the job-creating project start and finish spending EB-5 money?
Why to ask: The USCIS-required investment timeframe is indexed to when EB-5 money is deployed at risk, not just when it’s sitting in a bank account. The start date for the minimum two-year sustainment period is not the date of EB-5 investment, but the date that EB-5 money is made fully available to the job-creating entity.
Where to look for the answer: business plan schedule and budget.
When will my investment be released from the NCE to the JCE? What triggers the release?
Why to ask: The start date for the minimum two-year sustainment period is not the date of EB-5 investment, but the date that EB-5 money is made fully available to the job-creating entity.
Where to look for the answer: PPM and any fund administration documents.
Will the NCE release my funds to the JCE before the JCE finishes project expenditures and before the JCE creates jobs? If not, is there a good story for why my investment should get credit for funding job-creating activity?
Why to ask: To qualify, EB-5 investment must form a nexus with job creation. If investor money comes in after a project is already complete, then the investor faces additional hurdles to argue that the funds are still “at risk” and made available for job creation.
Where to look for the answer: Consult the business plan schedule and PPM to determine if your investment can come in before the project is completed and jobs are created. If not, have your lawyer scrutinize bridge financing documentation to ensure that the investment can still comply with EB-5 rules.
When will the project be economically able to support a capital event (e.g. loan refinance or profitable sale).
Why to ask: EB-5 investment is a real investment, and the planned exit strategy is only as good as the economics behind it. A three-year loan term between NCE and JCE is plausible only if the project is likely to be positioned in three years to allow refinancing or paying off the loan. If investor repayment depends on selling the project, then timing practically depends on when project value could plausibly support a profitable sale. Different types of projects require different holding periods; for example the average years-to-exit for a large-scale real estate development is naturally longer than for the average energy project. Industry averages and common sense can help apply a reality check to issuer promises, and help investors to consider the investment horizon that’s reasonable and to-be-expected for the type of project they want to invest in. If a deal promises an exit at a certain date regardless of project economics, be suspicious of whether this is a real investment or a reliable promise.
Where to look for the answer: business plan schedule, financial projections, market analysis, appraisal report, and Google.
What position does EB-5 have in the project capital stack?
Why to ask: EB-5 is generally just one of several sources in a project capital stack. Each source has a different position and priority when it comes to repayment. The likelihood of exit sooner rather than later for the NCE’s investment depends in part on the NCE’s level of seniority in the JCE capital stack.
Where to look for the answer: business plan and PPM.
Is my exit from the NCE contingent on any milestones in my immigration process (e.g. only after receiving a visa, only after I-829 filing, etc.)?
Why to ask: In the past, EB-5 offerings conditioned investor exit on completing the conditional permanent residence period, based on sustainment rules for pre-RIA investors. But USCIS does NOT require sustainment through the CPR period for post-RIA investors. Investors today need not accept an offering that still explicitly links investment exit timing to the risk of immigration process delay. According to USCIS, the sustainment requirement for post-RIA investors is linked to project milestones (using the capital, creating jobs), not to immigration milestones.
Where to look for the answer: PPM or other document describing the terms of the deal between investor and NCE.
Is my exit from the NCE contingent on the exit timing of other NCE investors?
Why to ask: You are looking for assurance that your exit timing won’t be delayed by another EB-5 investor with a much later timeframe than yours. That assurance could come if the offering allows for individual exits and/or if the span of individual investor timeframes is not large.
Where to look for the answer: PPM or other document describing the terms of the deal between investor and NCE.
Is the timing of my exit from the NCE guaranteed?
Why to ask: If the timing of EB-5 investor exit from the NCE is guaranteed in advance, then the investment likely does not qualify as “at risk” according to USCIS requirements, and USCIS will deny the case.
Where to look for the answer: If there is an I-956F approval, then USCIS should already have judged the offering redemption language to be acceptable. Otherwise, ask your EB-5-experienced immigration lawyer to review the documents to ensure that the terms of the deal between investor and NCE comply with requirements.
I most recommend the I-829 questions 6-9 in the EB-5 General Questions and Answers document. This is fresh content, covering questions about how to add eligible derivatives to I-829, reasons for duplicate I-829 receipt notices, how project fraud affects I-829 eligibility, and steps following an I-829 denial. (I gained less from the other May 2024 Q&A, a number of which belatedly respond to outdated questions that IIUSA submitted back in 2020, including Q&A on the now-non-existent I-924A process.) The I-956 form overview Youtube videos are nicely presented, and will be especially useful for those who struggle to follow the form and instructions. I noted a bit of new content on I-956 supporting evidence and high employment area reporting on I-956F.
Intel on I-829 Adjudication and Source of Funds Denials
USCIS Q&A do not discuss the increasing rate of denials around EB-5 source of funds, but industry has managed to gain inside intel through Freedom of Information Act requests. Ed Ramos’ recent article quotes adjudicator training materials that support my suspicion of an anti-China bias in EB-5 adjudications. Links to related articles:
USCIS continues to regularly update the Employment-Based Adjustment of Status FAQs page, most recently with a response to this important question: “Q. What information is available regarding how many pending Forms I-485, Application to Register Permanent Residence or Adjust Status, USCIS currently has in its inventory in the employment-based categories by country of chargeability?” USCIS responded with a detailed report of the pending inventory for all EB categories, itemized by country and month/year of priority date. Here is the USCIS report: Form I-485, Application to Register Permanent Residence or Adjust Status – Pending Applications for Employment-Based Preference Categories. And here is a link to my Excel, with EB-5-specific data from the USCIS report extracted and formatted for analysis.
The report is extremely valuable, the first EB-5 I-485 inventory breakdown that USCIS has published since 2019. It is also a bit frustrating to interpret. I wonder why USCIS does not report pending I-485 for the EB-5 reserved categories, though we know that at least hundreds of such I-485 have been concurrently filed since 2022. The data is for Unreserved EB-5 only. USCIS redacts any number <11 with the letter “D,” which means that the EB-5 I-485 inventory total (where “D” appears in 150 fields) could be up to 1,500 higher than the number of forms individually reported. The USCIS report distinguishes between I-485 with and without visas available, but not between I-485 with and without approval of the underlying petition. I don’t know why the total reported EB-5 inventory in this report is so much higher than the number of EB forms reported pending at the California Service Center, which reportedly handles all EB-5 adjustments. All that said, the data is so interesting! We used to ignore pending I-485 when calculating pipeline demand for EB-5 visas, because the number of EB-5 investors using status adjustment vs consular processing used to be so small. But the current crowd of 5,723 to 7,223 people with pending I-485 for unreserved EB-5 is certainly worth counting.
Total pipeline of unreserved EB-5 visa applicants as of X date for a given country is = A + B + (the portion of C not represented in B, less denials, plus family), adjusted for estimated changes between “data as of” date and X date
EB-5 Unreserved Visa Pipeline Demand
In the above table, you can visualize each row as a queue leading up to a visa window, and each column as capturing a count of people at one stage in the queue. So for example, a Brazilian EB-5 applicant with a 2023 priority date can consult all data points in the “Rest of World” row in the above table to get a sense of the total number of applicants who will be in front of him (based on earlier priority date priority) if he decides to join the Rest of World Unreserved visa queue instead of going for a set-aside visa.
Department of State Q&A on set-aside visa allocation
Data for pipeline demand in the different EB-5 categories is very consequential today, because many post-RIA investors will face a category choice. Many I-526E approval notices give investors the option to join the EB-5 Unreserved queue instead of the Rural or High Unemployment queue for which they also qualify. DOS confirmed this in a Q&A published in minutes from Department of State/AILA Liaison Committee Meeting March 20, 2024.
Can DOS describe the process by which applicants with EB-5 immigrant visa petitions approved with dual Reserved and Unreserved status will be asked to notify the National Visa Center under which processing status they wish to proceed?
Response: Beginning March 21, 2024, IV applicants who USCIS has approved for more than one EB-5 visa classification, reserved or unreserved, will be contacted by NVC and required to select only one of the approved visa classes indicated on their I-797C approval notice and submit their choice using NVC’s online public inquiry form. EB-5 visa applicants will not be scheduled for an interview until they have made a selection. NVC will not select an EB-5 visa class for an applicant. Applicants will be contacted to identify their choice at the Welcome Letter stage. Applicants who have an approved petition and do not receive a notice from NVC should contact us via the online public inquiry form.
How can EB-5 applicants make the best choice? One wants to choose the category with the least severe demand/supply imbalance. I’ll be writing about this in another post, but in the meantime encourage contemplating the data in the EB-5 Unreserved Pipeline Demand table above, and AIIA’s FOIA data for reserved categories.
This week I’m excited to participate in a webinar designed to shine light from multiple directions on the hot button issue of the required EB-5 investment timeframe. The webinar features top EB-5 lawyer Robert Divine, who first noticed and wrote about how the EB-5 Reform and Integrity Act changed the EB-5 sustainment period (interpretations reinforced by the USCIS Q&A but then challenged by the IIUSA lawsuit). The webinar is hosted by venerable regional center operator CanAm, which has a long-standing leadership role in the industry and IIUSA, and has shepherded thousands of investors through the EB-5 process. I’ll be there, as someone who gets heated-up about sustainment as a business plan writer, advocate for EB-5 timing issues, and member of both IIUSA and the investor organization AIIA. Will we have a big fight? Tune in on Thursday May 2 at 1 E.T. to find out! [Update: webinar recording here.]
I think the audience will benefit from a panel coming together with different perspectives, but on the common ground of mutual respect, long experience navigating industry complications, and a common objective of clarity (not an advertising agenda disguised as analysis). The webinar is titled “Putting the 2 Year Sustainment Requirement into Context: What questions should investors be asking?” The idea isn’t to get theoretical about the IIUSA lawsuit or to argue about what policy should be, but to look closely and practically at the policy in place today. We’ll discuss the USCIS Q&A on required investment timeframe, what it says, and how to understand it in context of immigration requirements and investment/project practice. “For how long can/must/will the issuer hold EB-5 money?” What a basic and critical question, and yet with so much confusion, controversy, and self-interested messaging around it. We hope that Thursday’s webinar can help add some clarity and nuance, and empower investors to ask good questions about EB-5 offerings.
I hear people talking about “two years” or “five years” or “seven years” in isolation, as if EB-5 were a direct payment program where immigrants get a green card in exchange for letting someone hold money for a fixed period of time. But EB-5 is not that kind of program; instead, it awards green cards based on at-risk investment that creates jobs. The EB-5 investment holding period requirement exists in context of those defining features of at-risk investment and job creation, not in isolation. This insight has major practical results. For example, working within the ”at risk” requirement means that “Day 1” of the required 2-year minimum investment period is not the date of EB-5 investment in the NCE, and the EB-5 investor’s exit date cannot be guaranteed upfront at given number of years. We’ll talk about the factors that do define the sustainment start and end dates, according to current USCIS policy and practical reality, and how to assess those dates in a particular offering.
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, 2022
Petitions Filed On or After March 15, 2022
5th Unreserved
Regional Center
I5, R5
RU
Direct
C5, T5
NU
5th Set Aside Rural
Regional Center
RR
Direct
NR
5th Set Aside High Unemployment
Regional Center
RH
Direct
NH
5th Set Aside Infrastructure
Regional 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.
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 Stage
1. Time from I-526 or I-526E petition filing to petition approval
2. Wait time for visa number
3. Time from I-526 or I-526E approval or visa availability to visa issuance
4. Conditional Permanent Residence
5. Time from I-829 filing to removal of conditions for permanent green card
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.
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?
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.
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.
EB-5 Updates 