EB-5 Visa Waiting Line and Visa Allocation

People who use EB-5 face some tough facts:

  • Demand for EB-5 visas (annual I-526 filings) has been three to four times higher than EB-5 visa availability since 2011, resulting in a backlog now about a decade long. (For those not already familiar with the situation, here’s a simplified explanation.)
  • New investors from most countries today can still expect to receive a conditional green card fairly promptly after I-526 approval, but only due to exceptions that will allow their applications to skip ahead of (push back) other people stuck in the backlog. (Or the overall wait could be shortened if the visa quota changes, or many people drop out of line.)

We respond to these facts by (1) advocating for backlog relief (AILA’s White Paper: Solutions to the EB-5 Visa Waiting Line gives suggestions), and (2) figuring out how the exceptions work, because investors and projects want to avoid a decade-long wait if possible.

The past few years offered a simple exception that allowed jumping much of the queue: be born outside China, since China accounts for most of the backlog and was the only oversubscribed country. Now, people from Vietnam face getting stuck in the visa wait line behind the Chinese (the May 2018 Visa Bulletin will have a Vietnam cut-off date), other countries wonder whether the same could happen to them one day, and Congress threatens set-asides and other changes to visa availability. And so we feel the urgency to understand just how visa allocation works, and relevant numbers.

First, here’s the law related to EB-5 visa allocation, with linked citations. (Or you can download my Word doc to get the text with headings to assist navigation.)

  1. The annual worldwide level for all employment-based (EB) immigrants is effectively 140,000. INA 201(d)(1)(A)
  2. At most 7.1 percent of the employment-based worldwide level is made available to immigrants in the EB-5 category. INA 203(b)(5)(A)
  3. Available EB-5 visas are issued to eligible immigrants in the order in which the immigrant petition was filed. INA 203(e)(1)
  4. At least 3,000 EB-5 visas are reserved annually for immigrants based on investment in a Targeted Employment Area. INA 203(b)(5)(B)
  5. 3,000 EB-5 visas are set aside annually for immigrants based on investment in a Regional Center. PL 102-395 Section 610(b) as amended by PL 105-119 Section 116(a)
  6. The EB-5 visas made available to natives of any one country may not exceed 7 percent of the available worldwide total. But if one or more countries gets held back by this rule, resulting in available visas with no one else to take them, then those remaining visas can be made available again without regard to per-country numerical limits for that year. INA 202(a)(2) and INA 202(a)(3) and INA 202(e) and PL 106-313 Section 104
  7. EB-5 visa numbers available to China annually under the per-country limit are reduced by 700 to compensate for cases processed under the Chinese Student Protection Act of 1992. PL 102-404 Section 2(d)(B) [Comment: It’s not obvious when this compensation is/was already complete; if the CSPA off-set does still remain in effect now, then Chinese start the year with (9,940*0.07) – 700 = -4 EB-5 visa numbers available to them.]

I imagine Charlie Oppenheim at the Department of State, sitting at his desk on October 1, 2017 with 30,000 EB-5 visa applications before him and tens of thousands more to come as USCIS approves pending I-526. How does he apply the above rules to decide who gets a visa in FY2018, and in what order? I hope he addresses this question during his keynote speech at the IIUSA EB-5 Advocacy Conference on April 23. In the meantime, here’s my understanding of how the rules get applied in practice.

  • #1 and #2 above give the target quota for EB-5 visa numbers in one year: 140,000*0.071=9,940.
  • #3 specifies the basic rule of order: first-in-first-out by priority date (applicants with oldest I-526 priority dates are first in line for a visa)
  • #4 to #6 are factors that can override the basic FIFO order principle. The applicant with oldest priority date gets the first visa number unless she’s held back by:
    • #4) being the 6,941st+ applicant that year (9,940-3,000) who invested outside of a TEA, in which case she’s held back for any TEA-based applications to go ahead (thus far, non-TEA applications have been too few to trigger this set-aside)
    • #5) being the 6,941st + applicant that year who invested outside of a regional center, in which case she’s held back for any regional center-based applications to go ahead (thus far, direct EB-5 applications have been too few to trigger this set-aside)
    • #6) being the 696th+ applicant that year (9,940*0.07) from a single country, in which case she’s held back for any applicants from not-oversubscribed countries to go ahead (China has been oversubscribed and triggered the per-country cap since 2015, and Vietnam will as of May 2018)
  • #6 does not mean that 7% of visas get set aside annually for each country in the world. It does not mean that any one country gets only 7% of visas annually. #6 just means that any one country’s allocation gets capped at 7% so long as other countries are also competing to use up available visas. When other countries aren’t competing, then any visas still on the table get allocated to the waiting line in FIFO order without regard to per-country limits. So in 2017, China in fact got 75% of visas: 7% plus the 68% of visas that remained after numbers had been allocated to qualified applicants from other countries. (Or maybe only the remainders, if the Chinese Student Protection Act in fact took the first cut.)
  • When more than one country exceeds the 7% cap, then both/all the oversubscribed countries get held back with cut-off dates designed to let applications from not-oversubscribed countries proceed first. Once qualified rest-of-the-world applications have been accommodated, then simple FIFO order reigns again: oldest priority dates get the first visas until all visas for the year are taken. (In practice that puts China at the head of the line for leftover visas, since it’s been held back for years and thus has the oldest applications on file. Vietnam will start being held back in 2018, and its more recent held-back applicants will find themselves behind many longer-pending Chinese applicants. If India or Brazil get held back next, their still-more-recent applicants will find themselves behind both China and Vietnam in the competition for leftover visas. Triggering the 7% cap is scary because it puts a country in the same line as China for leftover visas, and near the back of that line based on priority dates and the FIFO process. The saving grace for small countries like Vietnam is that they at least get 7% a year when they need it and probably won’t exceed that cap by very much. If I’m a Vietnamese applicant held back this year, I’ll be one of the older Vietnamese applications next year and thus well-placed to get one of 700 new visas available to Vietnam then. What I can’t expect is to get a visa left over from the rest of the world, since tens of thousands of Chinese have earlier claim on any leftover visas. But small excess = small backlog = small need to compete for leftover visas, thus relatively short wait time. As an Indian, I’d be a bit more concerned/vigilant. India hasn’t had high EB-5 numbers before, but the companies that helped create the China backlog with giant EB-5 raises have turned to India. If Indians flock to big raises seeking 100s of investors, they could end up well beyond the 7% cap,  thus creating a significant India backlog that needs leftover visas but won’t get them for ages because behind the earlier China/Vietnam backlog plus squeezed by any new rest-of-the-world applications.)
  • Visas can only be issued to people with complete visa applications ready, not to people with I-526 investor petitions still pending at USCIS. But it’s important to keep an eye on I-526 petitions – on number of receipts, petitioner origin, adjudication speed, approval rates – to estimate how many of those petitions will become visa applications, and when. New visa applications from not-oversubscribed countries immediately reduce the number of leftover visas available to pending applicants from oversubscribed countries. New applicants from a country near the 7% cap could tip the balance into cut-off dates and backlogs for fellow-countrymen already in line. A major decrease in I-526 filings or increase in denials or withdrawals would reduce incoming pressure on the visa backlog, and shorten wait time projections. Estimates are tough with all these moving parts and limited data, but we must try. The China backlog ballooned quickly and came to many investors (and their projects) as a nasty surprise. They didn’t realize how many other Chinese investors were already in the system or entering at the same time, and what that would imply for future visa wait times. A cautionary tale.

To facilitate analyzing numbers relevant to country-specific visa availability, I’ve added a tab titled “Country Focus” to my ongoing Backlog Calc Excel file. (The numbers aren’t new, but highlight significant previously-reported I-526 and pending visa data. I even made a cartoon to assist in visualizing the numbers. The thumbnail image here gives a teaser of the new Excel tab.) I don’t offer conclusions, but information to assist your conclusions.

Additional reading:

Benefit from this blog? Please consider supporting the effort behind it. As the EB-5 industry changes, your contribution can help preserve this space for conscientious and freely-available EB-5 reporting. Donations go to Lucid Professional Writing (a for-profit business) to fund work on this blog. Thank you!

RC Authorization to 9/30/2018, Processing Times, New RCs

Regional Center Program Authorization

The last time Congress voted a significant regional center program extension was 2012. Since then, the program has been extended a few months at a time, in connection with government funding. This is now happening again with H.R.1625, the vehicle for the Consolidated Appropriations Act 2018, which was signed by the President today.  The text includes regional center program authorization to 9/30/2018 on PDF page 1759, as follows:

SEC. 204. Section 610(b) of the Departments of Commerce, Justice, and State, the Judiciary, and Related Agencies Appropriations Act, 1993 (8 U.S.C. 1153 note) shall be applied by substituting “September 30, 2018” for “September 30, 2015”

This language refers back to Departments of Commerce, Justice, and State, the Judiciary, and Related Agencies Appropriations Act, 1993 (Public Law 102-395) Section 610 (PDF page 47), which established the regional center program. The 2018 Appropriations Act does not include the EB-5 Reform Act, or other EB-5 changes. It just extends the borrowed time until we get a good piece of EB-5 legislation.

Processing Times

USCIS has attempted to clarify reporting for processing times, and succeeded in confusing me, at least, even more than before. Unfortunately I missed a webinar on this topic yesterday because even the emails were confusing, but here’s what I think I understand, having read the new pages at egov.uscis.gov/processing-times/ and egov.uscis.gov/processing-times/more-info, and used my spreadsheet to fiddle with the EB-5 form numbers in comparison with numbers in the old-style report.

USCIS has changed its method for calculating processing times for four forms: N-400, I-90, I-485, and I-751. The underlying method for calculating (and underlying reality behind) times for I-526, I-829, and I-924 has not changed. What’s different for the EB-5 forms is that USCIS now reports three pieces of information: a high and low month in an “estimated time range” and a “case inquiry date.” The low month in the time range corresponds to the date USCIS previously reported for “processing cases as of…” in the old-style report, while the high month multiplies that duration by 1.3, and the case inquiry date more-or-less corresponds to the high month. Apparently IPO doesn’t want people complaining that they’re outside of normal processing times until their cases are taking 130% longer than average. If you took part in the webinar and have additional insights or corrections, please share.

See also the OIG Report: USCIS Has Unclear Website Information and Unrealistic Time Goals for Adjudicating Green Card Applications

Visa Availability

The Visa Bulletin for April 2018 confirms that Vietnam is definitely up next month for a cut-off date based on oversubscription. With visa availability being the major political and practical factor for EB-5 today, I’ll be writing more about this soon.

Regional Center List Updates

Additions to the USCIS Regional Center List, 03/09/2018 to 03/19/2018:

  • 888 American Dream Projects Regional Center (California, Nevada)
  • American National Regional Center d.b.a. EB5 Financial Regional Center (California): www.anrcs.com
  • Dayton Regional Center, LLC (Ohio)
  • Delvelyn Regional Center, LLC (California)
  • Hudson Funds New York Regional Center, LLC (New Jersey, New York, Pennsylvania): hudson-funds.com
  • MGV NYC Regional Center LLC (New Jersey, New York, Pennsylvania)
  • Monterey Massachusetts Regional Center, LLC (Massachusetts)
  • Monterey Northern California Regional Center, LLC (California)
  • Monterey Southern California Regional Center, LLC (California)
  • New York/New Jersey Real Estate and Infrastructure Regional Center LLC (Connecticut, New Jersey, New York)
  • PacNW Regional Center, LLC (Oregon, Washington)
  • Propet American Dream, LLC (Washington): www.propetamericandream.com
  • RSR EB-5 Regional Center, LLC (North Carolina, South Carolina)
  • Smith Mountain Regional Center, LLC (Colorado, Oklahoma, Texas)
  • U.S. Green Capital Regional Center, LLC D/B/A Playa Vista Regional Center (California): pvcapitalmanagement.com
  • Washington American Investments, LLC (District of Columbia, Maryland, Pennsylvania, Virginia)

New Terminations:

  • Chen Roberts Regional Center (Oklahoma)
  • Regency Regional Center LLC (California)

FY2017 EB-5 Visas by Country

The US Department of State has published Table V Part 3 of the Report of the Visa Office 2017, which gives a tally of visas issued by country for the Employment Fifth preference (EB-5) in FY2017. If we believe USCIS processing times reports, these should be visas based on investments/petitions from 2015 or earlier. A few points to note:

  • Having issued slightly fewer than the annual EB-5 visa quota last year, DOS compensated by going slightly over the quota this year.
  • Vietnam and Brazil are the countries with greatest increase in EB-5 visas issued between 2016 and 2017. South Korea showed the largest drop.
  • South America is the region with the greatest increase in number of EB-5 visas issued in 2017, and Europe the region with the greatest increase in number of nationalities receiving EB-5 visas.
  • Compared with 2016, the 2017 report has more countries taking at least one visa, but fewer countries taking over 20 visas. Kudos to the brave lone souls from Angola, Cameroon, Bolivia, Bulgaria, Tajikistan, and Suriname who immigrated last year though EB-5.
  • Countries besides China claimed 25% of the 2017 EB-5 visas (compared with 24% in 2016).
  • There were 160 fewer visas based on direct EB-5 investments in 2017 than 2016.
  • In addition to the Visa Office Report data on EB-5 visas issued during FY2017, we also have data on applications pending at the National Visa Center at the end of FY2017. (I’ve copied a couple charts below, and you can consult the Visas tab in my master visa/backlog spreadsheet for additional detail and source links.) It’s puzzling to look at the different reports together. For example, one wonders why the drop in visas issued to South Koreans in 2017, when there were 278 visa applications for South Koreans left pending at the end of the year. Or why people from Hong Kong got only 81 EB-5 visas in 2017, when there were 447 Hong Kong applications pending in November 2016 and 423 still pending in November 2017. Vietnamese received a hefty 335 EB-5 visas in 2017, just behind China, but 649 Vietnamese applications were still left pending. In total, DOS issued 2,523 visas in 2017 to applicants from countries other than China, but that still left 3,524 applications from countries other than China pending at NVC as of November 2017. Anyone know the story behind the non-China backlogs at NVC?

For reference, here are my posts on the Visa Office Reports from 2016, 2015, and 2014.

I-526 processing time (Part I)

Update: See also my followup post How long does I-526 take? (Part II)

Every month USCIS publishes Processing Time Information for the Immigrant Investor Program Office. The update just published indicates that as of October 31, 2017, IPO was processing I-526 filed on  November 21, 2015, I-829 filed on September 2, 2015, and I-924 filed on October 18, 2015. This is bad news, considering that previous reports indicated that IPO had progressed passed those dates months ago.  USCIS only publishes one month at a time, but I log the reports to track trends. Here’s a clip from my IPO Times Log showing the current report compared with recent reports.

I think the bouncing dates reflect two facts: (1) that the IPO processing report dates are never very exact, because IPO has a complex multi-step multi-track process that prevents keeping petitions in strict FIFO order; (2) that the Q4 2015 filing surge has been difficult to process (due to quantity and quality problems). I’ll guess that IPO issued a lot of RFEs earlier in the year on October/November 2015 petitions, moved on to December 2015 petitions while waiting for responses, and has now updated the processing report to reflect the fact that they’re again occupied with earlier petitions that received RFE responses. Or maybe the report update just means “oops, we recalculated our mysterious processing times report formula and concluded that we aren’t actually as far along as we said before.” This has happened several times before, according my report log.

In her published remarks for the 11/7/2017 EB-5 stakeholder meeting, IPO Deputy Chief Julia Harrison discussed the wait time for I-526 petitions filed in 2015.

Q: What is USCIS’s best estimate of the wait times for form I-526 petitions filed in 2015?

Response: The posted processing time is the best indication of a petitioner’s position in the queue. The actual adjudication time for any individual petition can vary based on: its position in the queue, the quality (and hence the adjudication time required) for prior petitions in the queue, and the quality and clarity (i.e. credibility of the evidence presented) in the individual’s petition. If RFEs or NOIDs are required they can significantly add to the time required to adjudicate a petition.

Also, if the investment project is first presented to USCIS on an I-526, the adjudication may have additional due diligence needs pertaining to the investment project which may require an RFE and any additional processing time will vary depending on the facts and complexity of each case.

Ms. Harrison’s answer focuses on case-specific factors that contribute to individual processing times. For general predictions about I-526, I think it’s helpful to step away from individual detail and think about processing as a capacity question. Petition data indicates that there were an average of 19,700 I-526 petitions pending at IPO in Q4 2015, and IPO has processed an average of 2,700 petitions per quarter since then.  Dividing inventory by flow rate gives an estimate for the time to push all inventory through the system. 19,700 petitions / 2,700 petitions per quarter = 7.3 quarters. If it takes 7.3 quarters or 22 months to adjudicate all petitions that were at IPO in Q4 2015, then we’d expect petitions filed that quarter to have a processing time around 22 months on average. That’s consistent with the IPO times reports (19 to 23 months for Q4 2015 petitions so far).  You can download my I-526 Times spreadsheet (Happy Christmas dear blog readers from Suzanne) for a model that compiles relevant data and allows entering a priority date to get a rough processing time prediction. According to the model, I-526 petitions filed in 2016 and 2017 can expect to wait about 20 months for processing, on average, assuming basically first-come-first-served processing. (But note that anecdotal evidence suggests huge variation in actual times from a few weeks to many years, so IPO’s process apparently isn’t as orderly as it tries to be. I didn’t make a prediction model for I-829 because the recent volume trends have been too erratic for a simple waiting line formula, and didn’t make a model for I-924 because USCIS doesn’t publish data for I-924 pending or processed petitions. And if someone assembles a better version of the I-526 model, please share.)

In addition to the spreadsheet model, I also keep updating my IPO Times Quotes document with communications from USCIS regarding processing times. Consult this if you want to see what IPO has said recently about how they organize petition processing, and factors that affect petition processing times. If you have personal experience to share, please enter it in this Google form. You can view form responses so far in this spreadsheet: https://docs.google.com/spreadsheets/d/1xjbYYrb6taz1j6G8JSbshNTLVJ5u0zhirBdSg6K4zTY/edit#gid=1725165840

Benefit from this blog? Please consider supporting the effort behind it. As the EB-5 industry changes, your contribution can help preserve this space for conscientious and freely-available EB-5 reporting. Donations go to Lucid Professional Writing (a for-profit business) to fund work on this blog. Thank you!

RC Reauthorization to 1/19/2018, visa numbers, legal actions, RC list changes

Countdown to Regional Center Program Reauthorization

  • 12/22: President Trump has signed the continuing resolution H.R. 1370, which means that the regional center program is now extended together with other authorities to January 19, 2018. (See Congress.gov for the text of the enrolled bill H.R.1370, now Public Law No 115-96.) I also notice that the White House website has been reorganized to highlight immigration as a key issue. The new White House immigration page emphasizes these priorities for the administration: constructing a border wall, ensuring the swift removal of unlawful entrants, ending chain migration, eliminating the Visa Lottery, and moving the country to a merit-based entry system.
  • 12/21: The House and Senate have passed a Continuing Resolution that replaces the expiration date in previous legislation with “January 19, 2018,” and doesn’t include any language that would exclude regional center program authorization. See the House Appropriations Committee news release for the text of House Amendment to the Senate Amendment to H.R. 1370.
  • 12/20: The content of a Continuing Resolution through 1/19 is still under negotiation.
  • 12/18: Nothing settled yet on the next stopgap funding measure, which will have to fight with tax reform for attention this week. The Senate Appropriations Committee may come up with its own proposal to compete with the House proposal. Senator Cornyn indicates that the Senate bill would also be through January 19, but may include some different provisions.
  • 12/13: Yesterday the House Appropriations Committee introduced H.J.Res 124 – a Continuing Resolution that would temporarily extend federal funding and maintain current federal operations (currently authorized to December 22) until January 19, 2018. Basically, it’s a clean extension that just switches out expiration dates: “SEC. 101. The Continuing Appropriations Act, 2018 6 (division D of Public Law 115–56) is further amended—7 (1) by striking the date specified in section 8 106(3) and inserting ‘‘January 19, 2018.’’ The 250 pages of miscellaneous additional provisions (defense appropriations, CHIP extension, etc.) do not mention EB-5 or move to separate RC program authorization from continued government funding. This bill is just barely out of committee, not enacted yet, but I’ll add updates as I hear news ahead of the 12/22 deadline.
  • 12/8: IIUSA members will be happy to note that the association has decided to tell us its 2017 Policy Platform and comments on the draft legislative framework. Now to see if we’ll be asked for our opinion on the policy positions someone has formulated. Probably not, since the hard-won industry unity depends on a narrow base. UPDATE: IIUSA has sent an email to members with the invitation “Please contact advocacy@iiusa.org with any comments or questions” on the IIUSA policy framework.
  • 12/8: IIUSA did the right thing with a stern statement on Marketing Hypothetical EB-5 Reform Outcomes as Certainties. Prospective investors take note: do not rest your current EB-5 decision on the possibility of visa set-asides in hypothetical future legislation. We have no assurance that a set-aside proposal will ever be enacted, or to whom/what a set-aside proposal would apply, if enacted. Even if set-asides became available, the size of the visa backlog and volume of I-526 filings mean that they may disappear too quickly to have an appreciable incentive effect. Their main function appears to be now, in hypothetical form, as a phantom concession to help get what industry negotiators really want (low investment difference between TEA and non-TEA areas) and a phantom carrot to encourage new investors.

Visa Backlog Update

The backlog of EB-5 visa applications at the National Visa Center continues to grow, as one would expect with I-526 filing surges reaching the visa application stage. The Annual Report of Immigrant Visa Applicants in the Family-sponsored and Employment-based preferences Registered at the National Visa Center as of November 1, 2017 reveals that the EB-5 visa application backlog is 23% longer this year than last year, with 17% increase in pending applications from mainland China and a 106% increase in pending applications from other countries. I’ve added these numbers to my master backlog calculation spreadsheet, which has a projection tab to estimate how statistics translate into wait times.

Legal Actions

Additional reading for those interested in following litigation in the EB-5 space, and learning from the actions and statements that got other people in trouble.

Other Helpful Articles

McKee, Curylo, Parrington: Considerations for Independent Third Parties to Assist With EB-5 Investments (December 12, 2017)

Regional Center List Changes

Additions to the USCIS Regional Center List, 11/08/2017 to 12/05/2017:

  • American Dream Fund Seattle Regional Center, LLC (Washington): www.adreamfund.com
  • American EB5 Regional Center (Florida)
  • Cactus21 LLC (California)
  • Chicago Real Estate Development Regional Center, LLC (Illinois, Indiana, Wisconsin)
  • Great North Regional Center, LLC (Massachusetts, New Hampshire, New York, Vermont): www.peakresorts.com
  • Hawaii Regional Fortune Center LLC (Hawaii)
  • M5 Venture Southern California RC, LLC (California): www.m5venture.com
  • Manhattan Empire State Regional Center, LLC (Connecticut, New Jersey, New York, Pennsylvania)
  • NCP Regional Center (California)
  • North Carolina EB5 Regional Center, LLC (North Carolina, South Carolina): eb5affiliatenetwork.com/regional-centers-access/eb5-regional-center-north-carolina
  • SRC NY, LLC (Connecticut, New Jersey, New York, Pennsylvania)

One regional center was removed from the approved list, but not added to the terminated list:

  • Bart Investment Group, LLC (Florida)

 

Q4 2017 EB-5 Petition Stats

The USCIS Immigration Forms Data Page has posted EB-5 petition processing data for the 4th quarter of FY2017 (July to September 2017).

The good news is that in FY2017, IPO finally – for the first time since FY2009 – adjudicated more EB-5 petitions than it received during the year. That’s what needs to happen for the backlog to shrink and processing times to fall.

In FY2017, I-526 receipts were down 14% and I-526 adjudications up 31% from the previous year. I-829 receipts were down 24% and adjudications up 42% from the previous year.

Although I-526 receipts fell slightly in FY2017, they were still unsustainably high – enough to claim nearly four years of visa numbers if the annual EB-5 visa cap stays at 10,000. As before, the quarterly receipt trend shows filing surges around regional center program sunset dates.

I-829 receipts fell every quarter in FY2017, which is troubling. The State Department has issued the maximum number of EB-5 visas annually since FY2014, so I would expect a steady stream of petitions to remove conditions. Instead, it seems that an increasing number of people who received conditional permanent residence are failing to complete the EB-5 process. I-829 denial rates remain very low, however.

The most dramatic processing improvement in FY2017 came for I-829 petitions, particularly in the fourth quarter. I-526 processing has improved year-over-year, but not consistently by quarter.

IPO has steadily increased their processing capacity since 2013, and I hope that the trend will continue into 2018. IPO has committed to reducing processing times in 2018, and continues to hire new staff. (Last month USAjobs.gov posted a job announcement recruiting for “many vacancies” as Adjudications Officer at IPO. Fortunately for the poor pending petitions, I decided not to apply.)

USCIS apparently continues to refine its record-keeping system. The Q4 data report not only provides Q4 numbers but some revised figures for previous quarters and years (with variation by several hundred from previously-reported figures). The pending petition count remains a mystery. (One would expect quarter-end pending petitions to equal previous quarter-end pending plus current quarter receipts minus current-quarter adjudications, but that’s not the case.)

Visa Numbers Update (Vietnam, India), TEA Reform Proposal, RC Audit Change

Visa Numbers Update (Vietnam, India)

We heard some updated EB-5 numbers this week from Charles Oppenheim, the Chief of the Immigrant Visa Control and Reporting within the U.S. Department of State. Bernard Wolfsdorf gives highlights from the presentation in 5 Things I Learned from Charlie Oppenheim at the IIUSA 7th Annual EB-5 Industry Forum. The major news is Mr. Oppenheim’s prediction that Vietnam will have enough demand to be subject to a cut-off date in 2018, and India may need a cut-off date by 2020. Cut-off dates happen when a visa category is oversubscribed and a country demands more than its rightful 7% of available visas in that category. A cut-off date holds back applicants from oversubscribed countries long enough to let any other applicants from undersubscribed countries get first chance at available visa numbers.  China is so far over the limit that it’s in an indefinite cut-off date situation with slow forward movement. Vietnam and India are just barely approaching the limit, and don’t have that much competition from other countries, so their cut-off dates would likely be temporary and hardly perceptible unless demand explodes.

I most appreciated the slide from the Mr. Oppenheim’s IIUSA presentation that gives a breakdown of pending applicants at the National Visa Center by country of origin (for the top five countries) and priority date. I added data from the slide to my Excel file of EB-5 backlog-related info, and correlate it with per-country I-526 receipt data from USCIS. I’m copying below a couple tables that illustrate (1) how we might forecast future cut-off-date-countries from information on I-526 receipts and approvals, and (2) that life is not fair. (Note: see below for updated tables.)

Since the IPO Processing Times report indicates that USCIS has only gotten to processing I-526 filed in November 2015, one wouldn’t expect to see applicants with 2016 and 2017 priority dates already in the visa queue. But Department of State reports nearly 2,000 applicants from the top five countries with priority dates after 2015, which means that USCIS must have processed over 600 petitions out of date order. Of course the number of pending visa applicants with priority dates 2015-2017 is still very small compared with the number of I-526 receipts in those years, so a majority of petitioners are getting held up in slow I-526 processing. I am surprised at the number of applicants with early priority dates still pending at NVC, considering that the China cut-off date progressed to mid-2014 this year (per the Visa Bulletin) and the other countries don’t have a cut-off date.

12/11/2017 UPDATE: The Department of State has provided updated numbers for pending visas in its Annual Report of Immigrant Visa Applicants in the Family-sponsored and Employment-based preferences Registered at the National Visa Center as of November 1, 2017. Here are updated charts based on the new data.

TEA Reform Proposal

Industry discussion about potential legislation has focused on the House-Judiciary Chair EB-5 Reform Proposal, a one-page term sheet with notes for potential future legislation. The term sheet proposes replacing the current Targeted Employment Area (TEA) system with a R/UD system. R/UD stands for Rural or Urban Distressed – two areas that would be incentivized for EB-5 investment with a slightly lower investment amount and fees, reduced job creation requirement, and – most potent of all – set-aside visas.

A couple major questions to consider: which projects would qualify for incentives under the R/UD proposal, and who’d be the winners and losers, were the term sheet to become legislation and then law?

  • The term sheet briefly defines Urban Distressed criteria: “must meet 2 out of 3 of the New Market Tax Credit Criteria.” The NMTC program has several sets of criteria, but we’ll assume the staffers mean the NMTC criteria for “severe distress” (since that’s the criteria referenced in previous EB-5 draft legislation): Poverty rate greater than 30 percent; median family income not exceeding 60 percent of statewide median; unemployment rates at least 1.5 times the national average. The term sheet gives this cryptic description of Rural criteria: “Base law + census tracts that would qualify under base law except for the fact that they are located in the outlying counties of MSA’s with population densities of less than 400 psm + Hatch fix.” I believe that means: Rural is an area with a population under 20,000 that is outside a Metropolitan Statistical Area (or a low population/low density area within the outskirts of an MSA). With those definitions in mind, you can get a sense of whether a project location might qualify for R/UD incentives using the CDFI Fund Mapping page provided by the US Department of the Treasury. For urban projects, select the NMTC mapping tool. When you enter the project address, the NMTC tool will bring up a map of census tracts around that address, with relevant NMTC data for poverty rate, income, and unemployment for each census tract. Check these numbers against the NMTC Severe Distress threshold, recalling that the EB-5 proposal would require 2 of 3 criteria to qualify. For rural projects, choose the BEA tool on the CDFI Fund Mapping page. This will bring up a map that lets you search by address and discover whether the address is in a non-metropolitan area, and the local area population. (To be sure of R/UD qualification, you’d need some additional guidance: whether and to what extent it’s allowable to group and average data across more and less distressed urban census tracts, what it means to be “outlying” in the rural context, and what source and date of data would be accepted. The term sheet doesn’t specify this.)
  • To judge winners and losers, we look at proposed incentives for R/UD investment. The term sheet suggests that investments in R/UD areas would be incentivized in these ways: 1,500 annual set-aside visas each for R and UD (with any unused visas rolling over from year to year in the same category), $925,000 minimum investment, reduced job creation requirement (5 indirect), option for exemplar somewhat-premium processing (one year), and exemption from an extra visa fee. Investments outside R/UD areas would have a $1,025,000 minimum investment, compete for the 6,940 annual visas remaining after set-asides, and would be subject to a visa fee of $50,000. The R/UD definitions and visa set-asides would become available on the date of enactment, affecting everyone with a visa pending at that time. The term sheet specifies that people with pending petitions and applications wouldn’t need to increase their investment amount, but they would find themselves in a line suddenly made about 40% longer by set-asides that reduce the generally available visa pool. The term sheet offers this limited relief: “For 1 year after DOE, any unused set-aside visas may be used by investors who had filed petitions pending as of DOE that meet the new definitions of R/UD.” However, I guess that few pending petitions fall in that category. This means that the #1 loser in this proposal is the past investor still waiting on conditional permanent residence. Congressional staffers don’t cry over the past investor, because they’re annoyed by the filing surges that happened in recent years (while they failed to act) and have wanted retroactivity. Self-interested RC lobbyists may also have few tears for past investors, whose money is in the bank and whose presence in the backlog represents the major drag on recruitment of new investors. A small negotiating table could see a win-win in a proposal that could discourage past applicants into clearing out the backlog and smooth the way for new rural/urban distressed investment (effectively incentivized with set-asides) and new prosperous urban investment (still competitive thanks to minor investment amount difference). Industry players who care about past investors and clients exist, and I hope their concern will signify.

Audit and Inspection Change
The page on the USCIS website that formerly explained Regional Center Compliance “Audits” and Site “Inspections” now describes Regional Center Compliance “Review” and Site “Assessments.” It’s interesting that USCIS revised the titles to sound less threatening, though the promised content of the audit/review or inspection/assessment remains almost unchanged.  The one content change I notice on the page is an additional bullet point for Regional Center Compliance Review: “Assess the effectiveness of internal controls related to the regional center’s administration, oversight, and management functions.”

EB-5 Timing Issues and Visa Wait: Process and Data

[Update: see also my 4/8/2018 post EB-5 Visa Waiting Line and Visa Allocation]
How long does it take to get an EB-5 visa? Before we look at numbers, consider this picture illustrating variables in the EB-5 process from initial application to conditional permanent residence.

The investor files an I-526 and receives a priority date, goes through I-526 adjudication, and proceeds along with family members to I-485 status adjustment (if already in the US) or consular processing (if outside the US) in order to get EB-5 visas. The system has two major constraints: USCIS capacity to process petitions, and the annual quota on EB-5 visa numbers. These constraints have produced pile-ups of pending petitions and applications, illustrated by the green bins in the picture.

We have data for many parts of this picture, such as how many people are in each of the pending bins, the historical rate of receipts and approvals and denials, and the annual visa quota. The simplest way to estimate the visa wait line (the time from priority date to green card) is to add up the pending bins and divide that number by the annual quota. As there are currently 90,000+ people associated with the pending bins, and the annual EB-5 visa quota is about 10,000, the current total waiting line is 9+ years long. (Maybe longer, depending on assumptions about the other variables). As recently as mid-2014, the line was only about three years long (as we know from the Visa Bulletin, which indicates that China-born investors with June 2014 priority dates started getting visas in May 2017).

Calculating the actual visa wait time for any given person is complicated. Where is that person in line, relative to other pending petitioners and applicants? Is that person from China (which is oversubscribed and subject to a per-country limit) or from an undersubscribed country that’s free to take the first available visas? How have/will other process variables such as per-country receipts and approval rates change over time and affect calculations?

If I were someone born outside China considering EB-5 now, I’d feel good about the per-country limit that allows me to skip ahead of most China-born applicants in line (i.e. about 87% of the line). For me, the time IPO takes to process I-526 is the major factor in my total wait time.

If I were a China-born prospective investor, I’d look at everyone in line ahead of me, and also try to estimate how many queue-jumping non-Chinese may enter from behind in the time I have to wait. That calculation could add years to the potential wait time, well exceeding 10 years, if the number of non-Chinese investors increases dramatically in the future and IPO processing speeds up. Or future circumstances could quell new EB-5 demand, encourage existing applicants to drop out, or apply the per-country limit to other countries, improving the wait time for China-born investors who stay in the system.

All past investors should consider the significance of the visa quota constraint and the possibility that it will change. Indeed, it could change for the better. For example, if the State Department recognizes that Congress intended the 10,000 visa quota to apply to 10,000 investors, not investors plus family members, this would loosen the constraint and cut about six years from the current visa wait time. Unfortunately, quota reduction is also a live possibility. Industry lobbyists are reportedly considering legislation with visa set-asides that would reduce the generally-available annual EB-5 quota from 10,000 to 7,000. This could be disastrous for past EB-5 applicants, adding about four years to the wait time. Visa set-asides have emerged as a compromise between the Senator Grassley camp, which wants to incentivize rural/urban-distressed investment somehow, and certain regional centers, who resist an incentive based on a significant investment differential that would make their future prosperous urban projects uncompetitive.  Tying the TEA incentive to visa set-asides rather than reduced investment would allow regional centers to keep attractive terms and options for future investors. Their past investors would suffer, but that cost seems not much counted. (My impression of the current legislation discussion comes from this webinar and this article.) Of course, maybe protections for past investors will be added to the legislation, or maybe there won’t be any deal and we’ll get new regulations instead. The regulations could significantly reduce new EB-5 demand, which would hurt the industry but benefit people who stay in the current visa queue.

And now, let’s get to the numbers. I’ve expanded and improved my backlog calculation spreadsheet, which now has multiple tabs that compile all the data I can find on each variable influencing the visa wait time for an EB-5 conditional green card. Keep the spreadsheet link, as I will update it whenever new inputs become available. (For those who don’t face backlog issues, see my posts on I-526 processing times Part I and Part II to help estimate the time between you and conditional permanent residence.)

Summary of EB-5 Visa Wait Time Variables

  1. I-526 petition variables
    • Number of petitions currently pending
    • Future petition filings
    • Number of petitions by country (how many China-born, how many born outside China)
    • Percent of petitions that will be denied or withdrawn
    • Number of family members to be associated with each petition
    • Time USCIS takes to adjudicate petitions
    • Investor’s priority date relative to others with pending petitions
    • The extent to which USCIS follows its first-in-first-out policy when adjudicating petitions
  2. Visa application variables
    • Number of I-485 adjustment of status applications for EB-5 pending at USCIS
    • Number of EB-5 visa applications pending at the National Visa Center
    • Number of pending applications by country (how many China-born, how many other)
    • Percent of applications that will be denied or withdrawn
  3. Political factors
    • Whether the rules and interpretation for the EB-5 visa quota remain unchanged
    • Whether new legislation introduces visa-set-asides that would reduce the annual visa quota generally available
    • Whether the regional center program remains authorized, and the impact of a sunset on investors in line for a visa
    • Whether new regulations or legislation include features that would change demand and/or affect past applications

Additional Reading

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Q3 2017 EB-5 Petition Processing Data

The USCIS Immigration and Citizenship Data page has been updated with data from FY2017 Q3 (April to June 2017) for petitions including I-526 and I-829.

In the third quarter we see IPO making wonderful improvement to I-829 processing volume (likely thanks to the new I-829 team announced in March). Meanwhile, I-526 processing fell another step back (possibly due to resources diverted to I-829). We see another pre-sunset-date filing surge, though less dramatic than previous surges. The total number of pending EB-5 petitions increased again in Q3.

Here’s a bonus chart for people involved in advocacy. Notice how I-526 receipt numbers reflect the destabilizing effect of frequent regional center program sunset dates, with each threatened sunset preceded by a surge of EB-5 investors rushing to file. Notice also how much EB-5 demand has exceeded the EB-5 visa quota as currently interpreted. If about 10,000 EB-5 visas need to be divided by four quarters and three visas per investor, then the program can only afford about 800 new I-526 per quarter on average before facing a backlog situation. If Congress intended to accommodate 10,000 EB-5 investments annually, then an average of 2,500 investor I-526 per quarter would sustainable — and reasonable considering actual demonstrated demand.

EB-5 investors watching processing times should also keep the I-526 receipts chart in mind. IPO has spent a whole year processing I-526 petitions filed from July to December 2015, and is still stuck on November 22, 2015 as of the last two IPO processing time reports. But that’s no wonder considering the huge number of petitions filed July-December 2015. Once IPO finishes that mouthful, dates should advance quickly through the next two relatively light quarters.

For China-born investors trying to figure out what the I-526 numbers mean for the visa backlog, here are bonus charts with historical approvals and receipts by country in recent years. These numbers can help you guess how many non-China investors are among the currently-reported pending I-526 petitions, and how many of recent approvals went to non-China investors. (In other words, guess how many people will get priority in the visa queue.) I summarized these numbers from a complete dataset of I-526 receipts, approvals, and denials by country for every year since 1991 — a dataset you can purchase from IIUSA for the full detail. (For whatever reason these figures released in response to FOIA request don’t exactly match the totals published on the USCIS website, but still  meaningful I think.)  (For more detail, download my spreadsheets on statistics related to the visa backlog, and statistics related to I-526 processing times.)

 

Q2 2017 EB-5 Petition Processing Data, Audits, Leahy letter

Q2 2017 EB-5 Petition Processing Data

The USCIS Immigration and Citizenship Data page has been updated with data from FY2017 Q2 (January to March) for petitions including I-526 and I-829.


A few points to note:

  • The fall in I-526 receipts was to be expected, since the previous quarters represented unnatural filing surges around sunset dates. Even 1,731 receipts in one quarter is not sustainable, however. So long as annual EB-5 visas are limited to about 10,000 for investors plus family members, only about 3,330 investors per year can get visas. The US actually benefited from 13,148 EB-5 investments over the past four quarters – but that’s almost four years of visa numbers for investors plus family.  Such a situation is not sustainable. If Congress wants to welcome more than 3,330 investments per year in the future, it needs to address visa availability.
  • USCIS processed 567 fewer I-526s this quarter than last quarter – not good news.
  • USCIS processed about 200 more I-829 petitions this quarter than last quarter – improvement, but not enough. If IPO continues processing about 300 I-829s per quarter, it will take over six years just to work through the existing backlog of I-829s. The California Service Center managed to process over 800 petitions in the final quarter that it handled I-829, and even IPO did better in early 2016 than it’s doing now. IPO announced their new I-829 adjudications unit in early March, so we may have to wait for Q3 stats to see real improvement.
  • The number of I-829 receipts has dropped the last two quarters. I wonder if this reflects petitioners giving up before reaching I-829, or being held up in the waiting line for conditional permanent residence.
  • The backlog of pending petitions is a tiny bit less dire than last quarter.

While inputting receipt numbers from this processing data report, I thought to try linking them with the dates in the IPO processing time reports. For example, IPO seems to have been working forever on I-526 cases filed in September 2015, and we might explain this this by looking at the surge in I-526 receipts around September 2015. So I added a tab to my processing times log that tries to make the link. My calculations don’t look right, which may be additional evidence that IPO processing time reports do not simply reflect FIFO case processing.

Regional Center Audits

Notes from a May 12, 2017 meeting between AILA and the USCIS Field Operations Directorate has some Q&A on EB-5 questions (page 10-15), including:

  • EB-5 Regional Center Compliance Audit Program: USCIS answered practical questions about the process and content of an audit.
  • Investors in terminated RCs: USCIS said that “Until a regional center that has been issued a Notice of Termination exhausts its administrative remedies before USCIS, the agency will generally delay final adjudication  or revocation of I-526 petitions associated with that regional center if the sole factor determining petitioner eligibility is the termination of the regional center’s designation.” (This is a welcome statement considering past evidence to the contrary.)
  • Regional Center amendments: In another installment of confusing guidance, USCIS indicated that amendments are required for both geographic area expansion and changes to ownership/org structure/administration, but not “required” in the same sense. The geographic area amendment must be “filed and approved” before I-526s are filed, while “Regional center projects are not on hold while the amendment is pending” in the case of an ownership change amendment

Washington Developments

The Kushner Companies EB-5 roadshow in China continues to reverberate, this time in a letter from Senator Leahy, Representative Conyers, and Representative Lofgren on behalf of the Senate and House Judiciary Committees to the Kushner Companies. The letter focuses on potential conflict-of-interest issues, and airs concerns about EB-5 generally. I’m most interested in this letter for the footnotes, and disturbed by the picture it paints of one-sided and minority-focused EB-5 lobbying. This meeting, for example, gives an unfortunate impression.

FY2017 Q1 EB-5 Petition Processing Statistics

The USCIS Immigration and Citizenship Data page has been updated with numbers for I-526 and I-829 petitions received and processed in October to December 2016. The numbers show another dramatic improvement in I-526 processing, continuing free-fall in I-829 processing, and another unnatural surge in I-526 receipts. Denial rates remain low. When IPO previewed these numbers in the last stakeholder meeting, they said that I-829 adjudications will improve going forward with a new I-829 team.

I’ve updated my summary charts with the FY2017 Q1 numbers, and also added a new chart pointing out how I-526 filing trends coincide with regional center program sunset dates. Legislators and USCIS have tended to speak as if recent EB-5 investor numbers reflect sustainable trends based on surging interest in the EB-5 program (and/or underpricing or aggressive marketing). My experience and what I read indicates that the surges are rather fueled by uncertainty about program changes, such that people who would otherwise have considered EB-5 years in the future are hustling all at once to make investments now while the program is still viable. That kind of demand is not sustainable. In fact it means that all else being equal we’ll see fewer investments in the future, because tomorrow’s demand is being pulled into today (and tomorrow’s visas are being claimed today). The increasing supply of EB-5 investment opportunities (particularly from a few mega-projects, the subject of a forthcoming post) play a role in the surges and backlog, but most of all I blame Congress for keeping the regional center program on edge by repeatedly promising and failing to act on EB-5.

FY2016 EB-5 Visas Stats by Country

The US State Department Report of the Visa Office 2016 has been updated with Table V (Part 3), which gives a breakdown of all EB visas issued by country in fiscal year 2016. I’ve updated my chart with the EB-5 visa numbers. I’m interested to note the growing number of visas based on direct EB-5 investment (8.5% of the total visas versus 1.6% the previous year), the distribution of TEA investments (99.9% of regional center investments but 68% of direct investments), the growing number of visas going to investors from outside mainland China (24% versus 17% the previous year), and the growing national diversity of EB-5 investors. South Korea and Brazil each claimed over a hundred more EB-5 visas in FY16 than FY15, and five new countries entered the list of those with more than 20 visas each: Germany, Argentina, Colombia, Singapore, and Italy. Considering processing times and the visa backlog, these trends likely reflect EB-5 investments made/I-526 petitions filed in 2014 and earlier. (UPDATE: IIUSA has data on I-526 filings by country in 2016, and you can see additional detail in my post on Q3 2017 petition filings.)

Edit: updated link https://travel.state.gov/content/dam/visas/Statistics/AnnualReports/FY2016AnnualReport/FY16AnnualReport-TableV-Part3.pdf
For reference, here are links to my posts with summary charts of 2014 visa numbers by country and 2015 visa numbers by country.

EB-5 Regs (Regional Centers), I-924 Process and 2015 Stats, Processing Times

I-924 Approval Data

I try to improve the accuracy of my Regional Center List by requesting regional center designation letters from USCIS through the FOIA process. So far I have logged all initial designations and amendments through 2015. I’m sharing summaries of data points gleaned from the most recent letters in my collection (2015 approvals) to help shed light on processing issues.  As we prepare to respond to the ANPRM, let’s think about what’s wrong with the following pictures, and how to improve the situation.

Status of Amended Regulations

USCIS has published an Advance Notice of Proposed Rulemaking (ANPRM) in the Federal Register. This notice “EB-5 Immigrant Investor Regional Center Program” (Docket No. USCIS-2016-0008) does not unveil any revised regulations, but instead generously solicits stakeholder input to help formulate new rules for regional center designation, the exemplar filing process, continued RC participation, and RC termination. (Docket #0008 references a separate notice “EB-5 Immigrant Investor Program Modernization” Docket No. USCIS-2016-0006 that may cover the other EB-5 topics that we expected to see addressed. 1/12 UPDATE: here is Docket No. USCIS-2016-0006, which proposes new regulations for EB-5 investment amount increases, TEA requirements, priority dates, and other EB-5 matters.)

The bad news about notice #0008 is that it suggests USCIS is in a preliminary stage of thinking about new regional center designation rules, hasn’t actually drafted any regulations on this topic, and doesn’t expect to start for at least another 90 days. (Though hustle might be useless anyway, if Trump makes good on his election commitment to issue a temporary moratorium on most new regulations.) The good news is that notice #0008 demonstrates genuine concern to understand and work with regional center reality, presents thoughtful analysis of the issues, and poses excellent questions. Answers prepared for USCIS in response to the ANPRM should be organized and shared with Congressional staffers as well, since draft EB-5 reform legislation covers the same issues that USCIS aims to resolve, and would benefit from the same input.

Processing Times

Speaking of processing times, here is an email that I should have shared last week.

From: U.S. Citizenship and Immigration Services [mailto:uscis@public.govdelivery.com]
Sent: Thursday, January 05, 2017 11:32 AM
Subject: USCIS Now Uses Specific Dates to Show Case Processing Times

Dear Stakeholder,

Starting on Jan. 4, 2017, we will post processing times using a specific date format rather than weeks or months. This is the first step in providing processing times that are timelier and easier to understand.

We post case processing times on our website as a guide for when to inquire (service request) about a pending case. For the last several years, we have posted case processing times using two different formats:

  • For cases that were within our production goals, we listed processing times in weeks or months.
  • For cases that were outside of our production goals, we listed processing times with a specific date.

Always refer to your I-797C, Notice of Action, and look for “receipt date” to determine when we accepted your case. If the receipt date on the USCIS Processing Times web page is after the date we have listed on your notice, you should expect to hear from us within 30 days. If after those 30 days, you have not heard from us, you may make an inquiry on your case.

We recommend using our e-request tool for all case inquiries. In addition, we have many other services and tools at my.uscis.gov

If you move, remember to update your address for each pending case and receipt number at uscis.gov/addresschange.

Kind Regards,
USCIS Public Engagement Division

Note that this change is cosmetic: processing “as of month” and “as of date” are the same information, just in a different form. But the change is helpful to clarify that the report does not give average processing times, but rather a metric for judging when it’s okay to inquire about case status. FYI here is my spreadsheet of historical IPO processing times with columns translating month to date and vice versa. (But whether considering month or date, keep in mind individual deviations as illustrated above in my scatter plot charts of actual I-924 processing in 2015.)

FY2016 Q4 EB-5 Petition Statistics, Visa Backlog

I wish I had a merrier Christmas post for EB-5 world, but it’s my duty to report sobering statistics from USCIS for EB-5 petition processing as of Q4 FY2016 (ending September 30) and the National Visa Center for pending visa applications as of November 1, 2016.

NOTES

  • I-526 Processing Volume: USCIS sped up considerably in the 4th quarter, processing more I-526 petitions than in prior quarters. 4th quarter decisions were also relatively positive – 91% approvals. However, the 4th quarter was not enough to improve the annual numbers. USCIS still processed fewer and denied more I-526 petitions overall in FY2016 than FY2015.
  • I-526 Receipts and Backlog: The last quarter of 2016 saw another unnatural surge of I-526 filings (thanks for nothing, Congress), further swelling the already huge pool of pending petitions.  If USCIS continues to process about 9,500 I-526s a year (average for 2015/2016), then the 20,805 petitions currently pending will take over two years to process.
  • I-829 Processing Volume: I-829 processing in FY2016 started well and then fell every quarter, from over 800 petitions processed in the 1st quarter to barely 200 petitions by the 4th quarter. The year was still better than FY2015 overall, with 1.7x more completions. USCIS did not report denying any I-829 petitions in the 4th quarter, and the denial rate for the year is a low 5% (but higher than last year’s 1% overall).
  • I-829 Receipts and Backlog: I-829 receipts grew a few percentage points over the course of the year, even as processing slowed dramatically. USCIS ended the year with 6,309 pending I-829 petitions, which would take three to five years to process at the current rate of adjudication.
  • Pending EB-5 Petitions and Applications: There are currently about 20,804 I-526 petitions pending at USCIS (each petition representing one investor who may subsequently apply for about three EB-5 visas) plus about 24,629 EB-5 visa applications already pending at the National Visa Center. This means that the queue of current and committed EB-5 visa applicants now is about 75,000 people long and therefore stretches about eight years into the future. (Assuming that DOS can issue only about 10,000 EB-5 visas a year, and that we don’t – though we might — see major changes from investors dropping out or Congress changing its mind about the total numbers or allocation of visas. Here is a link to my spreadsheet with calculations, for anyone who would like to rethink the numbers.) New China-born investors filing today will go to the back of the line of pending petitions and applications, while new applicants from other countries can look forward to skipping ahead of China-born investors once they reach the visa stage. Considering the line, a China-born investor filing I-526 today might receive a green card in 2024 and think about removing conditions and exiting the investment after 2026 (or even later, if future years bring a growing volume of non-China investors), while today’s investor from Brazil may get a green card in 2018 and be ready for exit after 2020. These are unreliable estimates because many possible factors could affect actual timing, but food for thought. I look forward to linking to other commentary and opinions on these numbers.

NOTE: See the comments for additional input and insights

 

Q3 2016 EB-5 Petition Stats, GAO Report, RC List Updates

Path to Reauthorization
I’ve been updating my post Looking toward RC program reauthorization as significant developments come to my attention. I’ll make a new post when the text of new legislation is released. The days between now and September 30 will be interesting. At least the regional center program is less controversial than the Zika virus, so far.

FY2016 Q3 EB-5 Petition Statistics
The USCIS Immigration and Citizenship Data page now has EB-5 petition statistics for the third quarter of fiscal year 2016. IPO processed fewer petitions overall in Q3 than in Q2 2016. I-526 receipts were slightly up from Q2, but still relatively low, and IPO processed more I-526s than it received in Q3. An unusually large number of I-829 petitions were denied in Q3. The backlog remains dire. My charts summarize data for I-526 and I-829 receipts, approvals, denials, and pending petitions from the USCIS reports. I also added bonus charts estimating the amount of investment and number of immigrants associated with petitions filed since 6/1/2015 (to help visualize the impact of retroactive rule changes, and why we don’t want them), and showing IPO staffing levels as reported by Mr. Colucci in EB-5 stakeholder meetings (since staff increases have been a major strategy for tackling the petition backlog) and recent processing time reports.

GAO Report
The U.S. Government Accountability Office has posted a follow-up to its August 2015 EB-5 study that identified weaknesses in USCIS’s fraud mitigation activities. The title of the 9/13/2016 report summarizes the GAO’s new findings: Immigrant Investor Program: Progress Made to Detect and Prevent Fraud, but Additional Actions Could Further Agency Efforts. The 2016 GAO study mentions a number of fraud mitigation measures that USCIS has implemented for EB-5:

  • The Fraud Detection and National Security (FDNS) unit has grown to 25 FTE staff, and IPO has created a specialized group focused on regulatory compliance.
  • FDNS is using overseas staff to attempt to identify potential sources of fraud stemming from any false statements by immigrant investors regarding their source of funds.
  • FDNS has planned at least 50 site visits in four states, and anticipates conducting additional site visits on a continual and as-needed basis. The first site visits began in August 2016.
  • FDNS has conducted risk assessments, and identified securities fraud as the most frequent source of fraud in the program.
  • USCIS has updated I-526 and I-829 forms to help capture additional information about petitioners and applicants that could be used to potentially identify fraud.
  • USCIS conducts selected background checks on all of its immigrant investors and regional-center principals, in cooperation with partners such as the Federal Bureau of Investigation and U.S. Customs and Border Protection.
  • USCIS recently signed a memorandum of understanding with the Financial Crimes Enforcement Network (FinCEN) and anticipates conducting additional reviews to help identify potential fraudulent actors and fraudulent financial activity in its regional centers.
  • USCIS will use I-829 interviews to expand collection of information that could be used to identify fraud. (But so far a comprehensive interview strategy has yet to be developed.)
  • USCIS hopes to implement a case management system for tracking and reporting data related to EB-5 investments and job creation. Project completion is “tentatively planned for some time in fiscal year 2017.”
  • USCIS is developing standard operating procedures for adjudication staff for each investor form, and hopes to finalize these procedures by Q1 of FY2017.

GAO found that USCIS continues to be hindered by a reliance on time-consuming reviews of paper files that preclude certain potential fraud-detection activities such as the use of text analytics to help identify indicators of potential fraud. The continuation of planned efforts to digitize the files, including the supporting evidence submitted by applicants and petitioners, could help USCIS better identify fraud indicators in the program.

Regional Center List Updates
Additions to the USCIS Regional Center List, 08/29/2016 to 09/12/2016

  • APIC Regional Center California (California)
  • AmerAsia EB5 Regional Center SF, LLC (California)
  • American Investment Fund Regional Center, LLC (Oregon, Washington): www.aif-rc.com
  • Invest Atlanta Regional Center (Georgia): www.investatlantarc.com
  • KOIT Global Investments (Indiana, Kentucky, Ohio, Tennessee): www.koitglobal.com
  • Southern California Investments Regional Center (California)
  • Sun Island Regional Center (California)
  • The Flame Regional Center, LLC (New Mexico, Texas)

Renamed:

  • Montana Energy Regional Center LLC (former name USA Montana Energy Regional Center) (Montana)

New Terminations:

  • Resource Regional Center Michigan, LLC (Michigan) Terminated 8/31/2016

EB-5 Petition Processing Q2 2016

The Immigration and Citizenship Data page on the USCIS website has been updated with official numbers for I-526 and I-829 processing from January to March 2016 (FY2016 Q2). Extraordinarily low I-526 receipt numbers in Q2 balance abnormally high numbers in the previous two quarters. I-829 receipts are back on a normal trajectory after that odd dip in Q4 last year. The number of I-526 petitions processed in Q2 went up while the volume of I-829 processing fell proportionally. The previous quarter shows the same trend in reverse, suggesting that IPO has been allocating resources back and forth between I-526 and I-829. Besides the receipt trend, which is important but old news now, I note the number of I-526 denials. One fourth of the I-526 cases processed last quarter were denied — the most denials we’ve seen since 2013. Meanwhile, the petition backlog was dented but remains daunting.

4/25 meeting notes, RC list changes

4/25/2016 Listening Session
Today’s EB-5 stakeholder meeting with USCIS was indeed a listening session — a venue for stakeholder opinions and not for tips and answers from USCIS. In case you’re a lawmaker or regulator and interested in reviewing insightful comments from the public, here is my recording. For the rest of us, who are mainly just curious about what USCIS has to say, here are a few tidbits that came out in the meeting:

  • USCIS will be initiating an IDEA community campaign to collect additional input on EB-5 regulation/policy changes. When that goes live, I’ll post a notice here.
  • I-829 interviews will begin this year, at first virtually, and interviewees may bring counsel, Regional Center representatives, and Regional Center counsel.
  • An audit program for regional centers is being implemented this year, and site visits are being expanded for direct and regional center projects.
  • IPO is up to 126 staff and on track to have 171 employees by year end.
  • IPO did not give any hints about the anticipated content of or timeline for revised regulations or new policy.
  • IPO will work closely with Congress up to the next deadline for regional center program reauthorization (September 30, 2016), and just in case will prepare “what if” guidance for two sunset scenarios: if the Regional Center program lapses but Congress apparently intends to reauthorize it, or if Congress indicates its desire to end the program.
  • IPO Chief Nicolas Colucci reported some preliminary processing data. Q2 2016 receipts: 849 (I-526), 886 (I-829), 40 (I-924). Completions from October 2015 to March 2016 (Q1-Q2 2016): 4,141 (I-526), 1,255 (I-829), 135 (I-924). The big story in these numbers is I-526 receipts, as illustrated in the following figure.
    Q22016I526

Regional Center List Changes
Additions to the USCIS Regional Center List, 04/19/2016 to 04/25/2016

  • Regional Center of the Pacific (California)

Additions to the USCIS list of terminated regional centers:

  • WRC EB-5 Regional Center, Inc. (Washington) Terminated 4/13/2016

Q1 2016 Petition Processing Stats, RC List Changes

Petition Processing Trends

The USCIS Citizenship and Immigration Data page has been updated with data on I-526 and I-829 petition processing in the first quarter of fiscal year 2016 (aka October to December 2015).  The numbers are not heartening. Investor Program Office petition processing volume peaked in April-June 2015, and progressively lost ground over the following quarters.  In Q1 2016, IPO processed 355 more I-829 petitions but 933 fewer I-526s than in the previous quarter.  The I-829 gains are nice, but then the I-829 backlog is only a dire 4,000+ petitions while the I-526 backlog is an extremely dire near-22,000 petitions. IPO cannot afford to be processing fewer and fewer I-526s, or fewer EB-5 petitions overall. The number of I-526 receipts is also striking. We expected the surge in July to September 2015, in advance of the possible September 30th Regional Center Program sunset date, but the numbers show that the surge continued through December. That’s two quarters in a row with over 6,000 I-526 filings each. The program can’t handle many quarters like that, considering that only about 10,000 EB-5 visas are available per year for investors plus family members (not to mention the fact that IPO has only managed to process about 3,000 I-526s a quarter at best). In addition to slowing I-526 processing over the course of the year, IPO got tougher, denying 8% of I-526 petitions processed in Q3 2015, 15% in Q4 2015, and 23% in Q1 2016.
I526q12016
I829q12016
pendingq12016

Regional Center List Updates

Additions to the USCIS Regional Center List, 03/01/2016 to 03/21/2016.

  • American Lending Center Ohio, LLC (Ohio): usa-rc.com
  • American National Regional Center Southern California (California)
  • Discovery Florida, LLC (Florida)
  • East West Global Regional Center (California)
  • Fairhaven Capital Advisors Regional Center (Colorado)
  • MCFI Mississippi / Louisiana (Mississippi): www.mcfiusa.com
  • MCFI New York / New Jersey / Connecticut (Connecticut, New Jersey, New York): www.mcfiusa.com
  • Midwestern Investments For America, LLC (Ohio)
  • Nevada Regional Center Enterprises (Nevada)
  • New York Renaissance Regional Center, LLC (Connecticut, New Jersey, New York)
  • Reliant Regional Center (Minnesota): www.relianteb5.com
  • Socal Investment Regional Center (California)
  • Southwest Florida Regional Center, LLC (Florida)
  • TriHaven Investment Group Southern California (California)

Name Changes:

  • Southern California Commercial Regional Center LLC (former name US Commercial Regional Center) (California)
  • Charter Investor Financial (former name Charter USA Financial LLC) (Florida)

2015 Visa Statistics by Country, RC list changes

2015 Visa Statistics
The US Department of State has finally published Section V. of Report of the Visa Office 2015, so we now have figures by country for all EB-5 visas issued in FY2015. (Last December I reported numbers from Section VI of the report, which only reflects EB-5 visas issued at consulates.) Here is my updated summary table.
2015visastats
DOS issued over 10,000 EB-5 visas in 2014, and fewer than 10,000 in 2015. China continues to dominate the list of countries, but with a smaller percentage of total visas in 2015 than 2014. Vietnam topped the list of countries claiming an increased number of visas in 2015, while China, South Korea, and Mexico showed significant decrease between 2014 and 2015. It’s interesting to note the number of visas issued to applicants from islands (including British and French territories) and wonder how many of these may be for applicants originally from more difficult countries who got intermediate citizenship. In terms of use, visas for regional center investments (98.4% of total) and TEA investments (99.2% of total) were even more dominant in 2015 than 2014. I assume that visa numbers for 2015 mainly reflect investments made in 2012-2014 (considering processing and wait times) by about 4,440 investors (assuming average 2.2 visas per investor). FYI here is my post with summary table for the 2014 Visa Office report. And note that IIUSA has a handy Investor Origin Map showing EB-5 investments by country.

Regional Center List Updates

Changes to the USCIS Regional Center List, 2/10/2016 to 03/01/2016

New Approvals:

  • EB-5 Bonds Texas-Oklahoma, LLC (Oklahoma, Texas)
  • Future Resources, Inc. (California): fureinc.com
  • Index Regional Center, LLC (Florida)
  • Rainier Valley RC LLC (Washington)

Name Changes:

  • Florida First Regional Center, LLC (former name USEGF Florida Regional Center) (Florida)

Terminations:

  • Luca Energy Fund Regional Center (Louisiana, Texas): Terminated 2/2/2016
  • U.S. Investment Regional Center, LLC (Arizona): Terminated 2/22/2016

EB-5 Timing Issues: Not a Fast Track

October 2017 Update: I now have a new post specific to the process and wait between I-526 and the conditional green card.

May 2017 Update: I’m demoting my original post from January 2016 to an attachment, as people keep consulting the post but all the numbers I used to try calculating timing have changed significantly since then. It’s hard to answer the question “how long will the EB-5 process take.” It depends on where the investor was born, when the investor filed I-526 relative to filing surges, how many petitions and applications get denied or abandoned, how processing times change, how demand changes, and whether Congress agrees to make changes to visa numbers or allocations or the filing process. The bad news, in short, is that the sheer number of people already in line for an EB-5 visa, plus the annual visa quota and per-country limitation, currently means that new China-born investors could be waiting a decade just to get a visa number for conditional permanent residence. Just a few years ago, companies could think in terms of a 5-year exit strategy to comfortably cover EB-5 investors through I-829 approval, but that could look more like 15-year exit strategies in today’s bad-case scenario. But the bad case won’t be reality for everyone — or maybe no one, if legislative proposals are enacted. Or the bad case could get even worse (as it did since I first wrote this post in October 2016, when the visa backlog looked about six years long), if surges in I-526 petition filing continue without other changes. Here is a spreadsheet with my ongoing attempt to calculate the backlog effect. Note that this simplistic approach does not model the influence of filing surges that create different time horizons for investors from different periods. And of course, it doesn’t reflect the fact that new legislation could change the picture entirely. For background on visa timing — the main wild card in the EB-5 process — see Robert Divine’s article The Realities and Implications of Chinese EB-5 Investors’ Wait for Visa Numbers (January 4, 2016).

Stages in the EB-5 Process

STAGE CONSIDERATIONS ESTIMATED DURATION
 (A)  Planning, paperwork, investment Must commit investment and meet other requirements before filing I-526
 (B)   File I-526, receive priority date, and wait for USCIS to process I-526 petition Can’t make material changes to the petition or depart materially from the business plan during this period In 2015-2016, average processing time ranged 13-17 months (USCIS target is < 6 months)
 (C)  Receive I-526 approval, wait for visa interview or I-485 status adjustment (may include waiting for visa number) Can’t make material changes to the petition or depart materially from the business plan during this period From a few months to about 10 years from I-526 filing, if waiting for a visa number (variable depending on whether China-born, where in queue, and whether visa numbers or allocation change). This spreadsheet has the quantitative factors that I know of.
 (D)  Receive green card; begin two-year conditional permanent residence period Investment must be sustained and at risk; job creation must occur; material change may be ok 24 months exactly (file I-829 after Month 21)
 (E)   Wait for USCIS to process I-829 petition For petitions processed in 2015-2016, average ranged 12-29 months
 (F)  Receive I-829 approval and conditional permanent residence No longer subject to EB-5 program requirements

Notes on EB-5 Stages

  • Investment and Escrow: During Stage (A), the EB-5 investor’s full investment must be committed to the enterprise (in the enterprise account, escrowed, or otherwise contractually committed). If escrow is used, investor funds must be released to the enterprise at latest before (D) begins.
  • Sustaining Investment: The investment must be sustained from (B) through (D) and must be actively deployed in job-creating activities at least during (D). USCIS is drafting new policy to address how exactly funds need to be deployed during (D), but has not finalized it yet. (In the meantime, the industry has tried to figure out reasonable redeployment policies.) The EB-5 investor may not recoup or draw down his investment before (E) and may be wisest to wait until (F) to exit.
  • Material Change: The deal needs to be planned and structured carefully during (A), as the petitioner will have limited opportunity to fix any deficiencies after filing I-526. The EB-5-funded enterprise must closely follow the I-526 business plan at least during (B) and (C), when material changes are not permissible.  USCIS allows some flexibility to depart from the business plan during (D). (See also my post on what material change means.) Note that proposed regulations and proposed legislation both offer to relax the material change policy and protect priority dates in light of long waits.
  • Job Creation: The investor can claim job creation that occurs from (B) to (D), and following his investment in (A). Under limited circumstances, he can also claim jobs created before the date of his investment or after the date that he filed I-829. In principle, he should be able to claim jobs that no longer exist when he files I-829 provided that the jobs were created and sustained for more than two years.
  • Planning Horizon: USCIS policy requires the I-526 business plan to show that jobs can be created within 2.5 years of I-526 approval.  However, businesses and investors should keep in mind that investors might not actually be verifying job creation until a decade after I-526 approval, considering the visa backlog and retrogression effect for EB-5 investors, not to mention processing times. EB-5 investment must be sustained throughout the conditional residence period (D), so premature exits must be avoided and exit strategies should consider realistic timing. Five years used to be a standard target for investor exit, but can be dangerously early for the average investor today.

Potential changes that would affect the EB-5 process and wait times

  • Increase the EB-5 visa quota: I list this because it’s the most obvious/simplest solution for the current dire picture, but I’m told that it is a political impossibility. Increasing the EB-5 visa quota would require increasing the total US visas and/or reorganizing how the total visa pie gets divided among different types. That would require comprehensive immigration reform — something that’s not on the table at all now and not expected any time soon.
  • Increase EB-5 visa availability by counting investors only toward the EB-5 quota, not spouses and children. This is a live possibility, included in several versions of EB-5 reform legislation and suggested to DHS for revised regulation (see p. 22-29 of the EB5-IC comment). And indeed, there’s a good argument for this being the original intent of Congressional representatives who designed the EB-5 program. If about 10,000 investors can get visas per year, then about 30,000 people can get cleared from the backlog per year (average 3 visas per investor), and wait times would shorten dramatically. Currently, just over 3,000 investors get visas per year, with family members taking the remainder of EB-5 visas.
  • Increase EB-5 visa availability by allowing EB-5 to recapture unused visas (see p. 22-29 of the EB5-IC comment)
  • Lighten the burden on China-born EB-5 investors by removing the per-country cap for visas. This has been suggested by a couple recent bills. It wouldn’t speed up the visa queue overall, but would mean that China-born investors don’t get held back by retrogression, and other investors don’t get to jump ahead i.e. would share/mitigate the long wait.
  • Use visa set-asides to incentivize Targeted Employment Area investment. This has been proposed in several EB-5 reform bills, and would shorten the visa wait time for new TEA investors while pushing other investors even further back in line. However, it’s likely that most set-aside visas would shortly return to the general pool (since the reform bills make TEA status difficult to achieve and the set-asides temporary) and thus the impact could be limited.
  • Change the filing stages: Several legislative proposals suggest allowing investors to file I-829 after having sustained investment and job creation for at least 24 months, even if they are still waiting for a visa number. In this way, when they finally receive the green card, it can be permanent rather than conditional permanent residence (skipping Step D in the table above). Several EB-5 bills have also proposed to allow concurrent filing of I-526 and I-485.
  • Mitigate the negative impact of long waits by adding more flexibility to the material change policy: Several legislative proposals and revised regulations provide more options and recourse for investors in case of material change, recognizing that such changes are inevitable over the course of years.
  • Mitigate the negative impact of long waits by adding protection for children who would otherwise age out: Several legislative proposals offer to do this.
  • Improve petition processing times: IPO continues to reaffirm its commitment to bring down processing times through staffing and efficiencies. I-829 petition times in particular should see improvement soon, as IPO has launched a new team devoted to I-829 adjudication.