USCIS meeting with IIUSA (regs, redeployment, processing times), Analysis of Litigation

October 24, 2018 14 Comments

Report on USCIS Meeting with IIUSA

Thank you USCIS for posting a complete transcript of the USCIS Meeting with IIUSA on October 5, 2018. Such transparency is so helpful. Program integrity suffers from general lack of information, and from the industry’s inclination to promote asymmetry for what little info is given.

At the meeting, USCIS Director Cissna spoke about current developments in EB-5, IIUSA representatives described areas of concern for the industry, and new IPO Chief Sarah Kendall commented on IPO performance.

The entire transcript is worth reading, but here are the most newsworthy elements from my perspective:

  • Regulations: Director Cissna, speaking in October, did not make it sound as of the EB-5 Modernization regulations (regarding investment amounts and TEAs) were on the brink of finalization. He said: “So on the main one, the proposed rule that has yet to go final, it is going to go final. We’re just not ready yet. We’re still working on it. You might have seen, I testified in front of the Senate a few months ago, back in June, and I got screamed at because Senator Grassley was wanting that regulation to be final even quicker. So I told him what I’ll tell you is the answer hasn’t changed. We are going to finalize it; just we’re not done yet. It’s a lot of work to finalize a regulation. But that should come soon.” And then later “Well, I think, I mean, you asked, you know, what are our priorities for the next fiscal year. I think, you know, putting aside the regulations which we already discussed, I think the main one is continuing to ensure the integrity of the program. That’s what it’s about. The reg., it might take a while yet before it gets finally published.” This is a grain of salt to go with the “last chance in November 2018” marketing pushes currently fueled by the OMB Fall 2018 Unified Agenda, which estimated 11/00/2018 for a final rule.
  • Redeployment: IIUSA representatives spoke strongly for the need to clarify policy around redeployment. USCIS sounded receptive but vague — not as if they are currently working on redeployment policy. Kathy Neubel Kovarik, Chief of the USCIS Office of Policy and Strategy, threw out a couple ideas:  that the industry might submit suggestions for how to clarify the policy, and what if USCIS published the details of approved redeployments for industry reference. IIUSA pointed out pros and cons.
  • Processing Times/Petition Backlog: The USCIS website has only published EB-5 petition data through March 2018, and we desperately want to know numbers for filing and adjudication volume for the year. This meeting transcript includes charts with completion information at least. The charts show a heartening increase to processing volume across all EB-5 forms in 2018 vs 2017: +21.9% for I-526, +2.5% for I-829, and +72.5% for I-924. Ms. Kendall acknowledged that I-829 (or as the transcriber tellingly heard it, “oh, no, we’re not,” haha) has “a bit of a bump going on.” She indicated that “in the next year we anticipate putting additional resources to the [I-829] so that we can address the needs of that particular line of adjudication.” She reports that IPO is now fully staffed with 200+ personnel, spread across FD&S, Fraud Detection and National Security, and Adjudications Management, plus “an excellent support team.”

I will report further when IPO Chief Sarah Kendall speaks at the AILA/IIUSA conference in Chicago next week.

Litigation in EB-5

I’m behind in reporting on litigation and enforcement actions in EB-5, but Friedland and Calderon have picked up the slack with a paper analyzing the couple SEC actions and flurry of investor-initiated litigation this year. Here is their helpful introduction to the paper.

In December 2017 when we released the first edition of “Understanding EB-5 Securities: NYU Stern Database of SEC EB-5 Securities Enforcement Actions,” we were skeptical as to whether there would be sufficient developments in this area to justify annual updates. However, any doubts were removed during the first 10 months of 2018.

Below is a link to our latest paper, entitled “EB-5 Securities – New Developments and Updated NYU Stern Database – 2018 Edition,” with the updated database as an appendix.

Topics covered by this paper include:

  • The pending litigation in the CMB Century Park Hotel case, with a detailed analysis of the Investment Company Act of 1940 aspects of the case, as well as discussing the relevance to this case of the recent SEC Order against CMB even though the Order relates to unrelated projects
  • The 2018 SEC enforcement action, the DOJ prosecution and the pending bankruptcy auction of the Palm House Hotel where an affiliate of the Related Companies is apparently the stalking horse bidder
  • The immediate impact of the 2017 U.S. Supreme Court decision in SEC v. Kokesh based on recent SEC testimony before Congress
  • The SEC settlement with Ariel Quiros, the mastermind of the Jay Peak fraud; a comparison of the distribution of proceeds with the distribution under the Raymond James Financial settlement; and possible SEC Whistleblower awards
  • The pending litigation against USIF alleging a secret restructure of the EB-5 investors’ capital, in its atypical role as an in-house regional center
  • DOJ criminal prosecutions in 2018, as well as expected future prosecutions
  • Unregistered broker-dealer actions, including the recent enforcement action against an immigration attorney wearing multiple hats, and a 2018 US Supreme Court decision prompting a rehearing of aspects of the Hui Feng decision
  • The pending litigation against People’s United Bank for its role in Jay Peak and its potential impact upon other banks’ willingness to establish and maintain EB-5 subscription escrows
  • Updates to our SEC EB-5 Securities Enforcement Action Database
  • Our dim outlook on the likelihood of enactment of EB-5 integrity reform measures, although a recent announcement by OMB, DHS and USCIS provides a glimmer of hope

Link to new paper: EB-5 Securities – New Developments and Updated NYU Stern Database – 2018 Edition

Link to webpage on NYU Stern CREFR site listing our EB-5 research:
EB-5 Research Papers and Articles by Gary Friedland and Jeanne Calderon

Filed under EB-5 in the News, EB-5 Statistics, Updates from USCIS

FY17 per-country I-526 data, SEC action (registration)

October 9, 2018 37 Comments

Per-Country I-526 Data
IIUSA has received another year of per-country data for I-526 filings through the Freedom of Information Act process, and prepared a report for IIUSA members. Being ambivalent about freedom of information, IIUSA has decided to share this much with the public.
The full FOIA data set for I-526 filings, approvals, and denials FY2016-FY2017 is being sold for $1,500 (discounted to $300 for IIUSA members).

People who seek EB-5 investors will be interested to note shifts in the top six countries for EB-5 demand. Data on I-526 filings gives a better demand indicator than visas issued, since visas are usually issued 2+ years after the investment.

Past Chinese investors will note with concern the rising number of I-526 filings from other countries that aren’t oversubscribed. But Chinese can also take heart that increased demand in FY16/17 was concentrated in two countries that have (Vietnam) or will (India) exceed their cap and receive a demand-dampening cut-off date since FY2017. Only applicants from undersubscribed countries with no cut-off date can advance ahead of Chinese in the visa waiting line.

Indians will appreciate the clue to future EB-5 visa demand and wait time. Table 1 shows that Indians filed 354+587=941 I-526 from FY16 to FY17. Let’s say 941 I-526 filed * 85% I-526 approval rate * 2.9 visas per I-526 approval = 2,320 visas demanded. (I’m using historical worldwide averages as variables for this estimate, though I guess Indian approval rates may be lower and family size higher than the China-dominated average.**) About 2,320 EB-5 visas demanded by Indians * 1 year/696 EB-5 visas available to India = about 3.3 years to issue the EB-5 visas demanded by India in FY16 and FY17. 3.3 years/2 years = 1.6 more demand than supply = backlog coming. Processing time information indicates that USCIS is only just now approving I-526 from 2016, so many of those I-526 filers haven’t reached the visas application stage yet. When they do, they’ll exceed the per-country cap and lead to a visa bulletin cut-off date for India. When that will happen depends on USCIS’s speed in adjudicating I-526. The length of the visa wait time will vary for people with different priority dates. If only we had FY2018 data as well! Charlie Oppenheim at Department of State probably has these numbers, and I look forward to hearing what he has to say at the AILA/IIUSA EB-5 Industry Forum in a few weeks. I also look forward to USCIS finally publishing FY2018 Q3 data for worldwide EB-5 petitions filings (which they’re very late in doing). Because good business decisions depend on information, I continue to update and share my spreadsheet of available data related to EB-5 visa availability.

**UPDATE: I’ve since realized that DOS publishes a report of Monthly Immigrant Visa Issuances that contradicts my assumption about family size. I logged the monthly reports of EB-5 visas issued to Indians and Vietnamese so far in FY2018 (See Tab 2 Column AS of my backlog spreadsheet), with this result:

  • India: 347 EB-5 visas issued Oct 2017-August 2018, of which 130 were to principal applicants (average 2.67 visas per principal)
  • Vietnam: 658 EB-5 visas issued Oct 2017-August 2018, of which 171 were to principal applicants (average 3.85 visas per principal)

SEC Action on Unregistered Sales of Securities
The SEC has set a gentle example to the EB-5 community in a recent enforcement action. The SEC targeted EB-5 giant CMB Export for violations of registration requirements and improper transaction-based compensation until 2015, and settled for $11.6 million in penalties (not much, considering the amount of investor funds involved) and compliments to CMB’s compliance efforts since 2015. In its press release, the SEC emphasizes the intended moral of the story: “All securities, including EB-5 securities, must comply with registration provisions, which are essential to protecting investors. In the EB-5 industry, strong compliance policies can help ensure that companies meet their registration obligations under the federal securities laws.” Other regional centers will be interested to read the SEC Order and consider their own past and future policies. Note that previous actions have made an issue of transaction-based compensation to unregistered broker-dealers, but this is the first SEC action to target offering partnership interests without first registering the offering, or having a valid exemption from registration.

Filed under EB-5 Statistics

Per-country limits in question?

July 28, 2018 126 Comments

1/2019 UPDATE: IIUSA has done a more granular analysis of the EB-5 impact of the Yoder amendment

7/2019 UPDATE: My post Country Cap discussion analyzes  H.R. 1044 ‘Fairness for High-Skilled Immigrants Act of 2019, which renews the proposal to remove the country cap for EB visas, but with a transition period and protection for past investors with approved petitions.]

— ORIGINAL POST —

I do not normally quote the Center for Immigration Studies, but for once I agree with David North. This is a concerning development:

An alarming bit of news – generally ignored by the press – is that the country of origin ceilings that try to diversify our immigration streams may be scrapped by congressional action.

The House Appropriations Committee, while marking up the Department of Homeland Security spending bill this week, inserted language that would eliminate the long-standing requirement that no more than 7 percent of any group of employment-based immigrants could come from a single nation. The same provision would ease the 7 percent rule on family migration as well, but not eliminate it. (See the amendment here, on pp. 23-28; it was introduced last year as a stand-alone bill, H.R. 392.)

This came about because the chair of the DHS Appropriations Subcommittee, Rep. Kevin Yoder, R-Kan.), managed to persuade his colleagues on the full committee that the current system is unfair to the Indian nationals whose visa applications, notably in the EB-2 category, are backlogged for several years. The provision would also speed up the delivery of EB-5 (immigrant investors) to Chinese applicants, while slowing down their arrival for people elsewhere in the world.

This House amendment language may not get into a final bill (it’s not in the Senate version), but it’s still important for the community to be educated about what the per-country limit means for EB-5. Based on data for EB-5 usage to date, here is what I calculate would happen to EB-5 visa availability if the per-country cap were removed as part of the FY2019 funding bill in September:

  • The October 2018 Visa Bulletin would have a 2014 cut-off date for the EB-5 category for all countries.
  • From 2019 to 2027, Department of State would be issuing EB-5 visas to people already in the backlog as of 2018, with no visas left for contemporary demand. Here are my estimates for when visas would be available to investors from various dates, based on data about I-526 filings from 2014 to 2018 and assumptions about denials/dropouts, family size, and visas already issued. Investors from all countries would be in the same line in order by priority date, without regard to nationality.
    • 2014 priority date: visa issued in 2019 (5-year wait)
    • 2015 priority date: visa issued in 2020/2021 (6-year wait)
    • 2016 priority date: visa issued in 2022/2023 (7-year wait)
    • 2017 priority date: visa issued in 2024/2025 (8-year wait)
    • 2018 priority date: visa issued in 2026/2027  (9-year wait)
    • 2019 priority date: visa issued in 2027/2028
  • China-born applicants would dominate the front of the line for EB-5 visas, having the oldest priority dates. They would get 99% of EB-5 visas in 2019, and gradually reduce to about 80% of visas by 2027.

Pros and Cons

  • Removing the per-country limit for EB-5 would give past China-born investors a predictable visa wait of 5 to 10 years, mostly just competing with each other for visas. That would be better than the current hard-to-predict wait of 5 years to life that depends on the wild card of future incoming non-China demand. Removing the per-country limit would give the China-born investor filing today an estimated 9+ year wait rather than the currently-estimated 15+ year wait. This is a benefit for China, but not a solution even for China. 9 years is preferable to 15 years, but this difference becomes irrelevant if both times are unacceptably long.
  • Removing the per-country limit for EB-5 would be a pure disaster for non-China investors. All non-Chinese with pending I-526 or pending visa applications would find themselves in line behind the tens of thousands of Chinese with older priority dates, with many-year visa waits for everyone. Today’s China-born investor suffers, but at least it’s from policy that was in place when he invested, and an excess China demand situation knowable at that time. The non-China investor already in the system would suffer retroactively from new policy that didn’t exist when he invested.
  • Lacking the per-country limit to protect new investment from a variety of countries, the EB-5 program would be essentially dead as regards new investment for the next ten years. Interest might revive by 2030, when the backlog that piled up in 2011-2018 is out of the system, leaving visas available for new applicants. (Or earlier, if many people in the system are shocked at finding their visa timeline unexpectedly expanded by 5-10 years, and try to exit.)

There’s still room for lobbying on this issue, so judge where your interest lies and speak with your contacts.

Additional Reading:

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

Visa Numbers (FY2018 Q3 and conference update)

July 27, 2018 58 Comments

The 2018 eb5 investors Magazine EB-5 Convention in Los Angeles provided a platform to discuss a challenged industry. The dominant theme was EB-5 visa numbers, and the consequences of excess demand for a limited quota.  Panels and conversations discussed alternatives to China in view of untenable visa wait times, alternatives to EB-5 for investors and project companies and service providers, alternatives to the visa quota as currently interpreted, and options for deploying past investor funds during the visa wait. I learned that everyone is confused about redeployment and material change, with smart lawyers giving conflicting advice, and that many people are confused about visa availability.   I copy below the most important piece of solid information I learned at the conference – the latest DOS statistics on EB-5 visas issued – followed by my comments and predictions.

Information reported by Bernard Wolfsdorf at the EB-5 Waiting Line panel at the eb5 investors Magazine EB-5 Convention on July 24, 2018, based on information provided by Charlie Oppenheim at the Department of State Visa Controls Office [recording here]

As of the third quarter of FY2018 (June 2018), Department of State had issued the following number of visas:

  • Worldwide: 7,900
  • China: 4,049
  • Vietnam: 692
  • South Korea: 423
  • India: 375
  • Taiwan: 337

DOS China Predictions:

  • On October 2018, the cut-off date for China will move to August 8, 2014 (or maybe August 15).
  • China has received a large number of visas annually because it has been able to take visas unused by other countries. Increased marketing in the rest of the world means that the number of visas available for China is dropping. Charlie will allocate 4,675 visas to China in FY2018—much fewer than in previous years. (China received 7,567 visas in FY2017.) Charlie predicts that China will have 3,500 visas available in FY2019, and 3,000 in FY2020.

DOS Vietnam Predictions:

  • On October 1, 2018, the Vietnam cut-off date will move up to January 2016.
  • In March 2019, the Vietnam cut-off date is expected to retrogress.
  • [Suzanne’s note: In other words, the October Visa Bulletin date moves up so that Vietnamese can get the about 700 new visas available to them in the new fiscal year. These having been issued, the March Visa Bulletin will put Vietnam back to the same cut-off date as China — i.e. in the same line as China for any leftover visas.]

Notes on visa availability:

The China backlog has the oldest priority dates in the system and thus first claim on all visas left over after the up-to-700 per country allocation. The total allocation to China depends on number of leftover visas. Countries behind China are effectively limited to about 700 visas annually. Data on visas issued for FY2018 to date indicate that Vietnam has already reached its limit for the year, while South Korea, India, and Taiwan are closer than ever before to the 700 limit. (As a reminder, total visas issued to these countries in FY2017: Vietnam 471; South Korea 195; India 174; Taiwan 188.)  DOS predicts future visa wait times for investors from these countries. (No FY2018 Q3 numbers were provided for Brazil — don’t know if that means fewer FY2018 visa applications than expected from Brazil.)

Remember that investors from one country don’t all have the same wait time.  Individual wait times vary by priority date (date of I-526 receipt). Vietnamese investors who filed I-526 in January 2016 will likely have an almost 3-year wait for a conditional green card (per Charlie’s Visa Bulletin cut-off date prediction above), while Vietnamese who filed I-526 in April 2018 will likely have a 6-year wait (per Charlie’s prediction at the IIUSA conference in April). Each of those estimates is specific to a point in time – that is, to Vietnamese investors who filed on a certain date — not for all Vietnamese.  If the number of I-526 filings from Vietnam increased in a linear manner from 2015 to the present, then the visa wait time for Vietnamese investors over that time period is also linear. As a Vietnamese investor, I’d estimate my visa wait by plotting a line through the two wait-time estimates provided by Charlie, and see where my priority date would fall on that line. (i.e. I’d estimate about a 2-year wait if I filed in 2015 and a 4-5 year wait if I filed in 2017, since he estimated 3 years for early 2016 filers and 6 years for early 2018 filers.) The demand line often isn’t linear (e.g. I expect Vietnam I-526 filings to drop in 2019, thus changing the calculation for 2019 Vietnamese investors), but still plot-able given data.

In EB-5 some people have a false sense of panic (i.e. past Chinese investors thinking Charlie estimated a 15-year visa wait for all Chinese as of April 2018, when he just estimated a 15-year wait for new Chinese investors filing I-526 in April 2018), while others have a false sense of security (i.e. current Vietnamese investors thinking an October 2018 Visa Bulletin indicating 3-year wait applies to today’s new investors, when in fact it’s just specific to people who filed by January 2016 and at the visa application stage in October 2018.) The misunderstandings both result from forgetting to think of the visa wait as a waiting line problem, with the wait for any one investor as a function of that investor’s place in a priority-date-ordered queue (subject to country limits, but not in undifferentiated pools by country). Generally, the longer ago you filed I-526, the shorter your total wait for an EB-5 visa. Chinese investors who filed I-525 four years ago are receiving visas today (four year wait), while Chinese investors filing I-526 today will have longer to wait.  The EB-5 waiting line problem extremely complex but not impossible, considering the process we know and the fact that we have at least some data. (FYI my spreadsheet of backlog-related data is currently under revision as I try to think out a simpler presentation with clearer country-specific analysis. And I really wish we could get updated per-country I-526 data!)

Misconceptions about visa availability were evident in several promoters who spoke at the conference about demand  potential. The EB-5 quota and per-country limit mean that each non-China country can get only about 700 visas i.e. accommodate only about 230 investors annually.   (10,000 visa quota * 7% per country + 0 visas leftover after the China backlog) * 1 investor/3 visas = about 230 investors per country, sustainably. Meanwhile, thousands of investor I-526 * 3 visas/1 investor * 1 year/700 visas = many years visa wait for any country that falls for the siren song of big projects. India especially, take note.  CanAm alone boasts of securing 200 Indian investors this year – almost a year’s worth of visas to one regional center operator – and I hear about multiple other projects each seeking hundreds of Indians. Investors should be vigilant, and EB-5 promoters consider their long-term interests and watch the activity of other promoters.  No market can replace China; raising too much in any one market will simply spoil it. That is, unless the EB-5 visa quota changes.

Will the EB-5 visa quota change, and who will advocate for change? I was reminded at the conference that the industry has conflicting interests. On the one hand, we cannot keep raising money or creating jobs at historical levels without visa relief. Long wait times would ruin the market going forward. Either EB-5 visa numbers increase or EB-5 economic contributions fall.  On the other hand, long visa waits result in the golden gift of billions of dollars in past investment free to be redeployed for 10+ years longer than expected with little investor input and no new job creation requirement. Some companies with large amounts of EB-5 money already in pocket may not be motivated to press for change. But a majority of industry players do want change, as do investors of course.  A new lawsuit pressing the 10,000 EB-5 visas-for-investors argument has maximized its slim chance of success by being entrusted to rockstar Ira Kurzban. (The 10,000 EB-5 quota has been historically interpreted to include family members, thus making it effectively a 3,300-investor quota.) If Kurzban can’t argue this, no one can. People at the conference seemed to think the lawsuit is, at least, a significant and productive gesture. (Update: here is the complaint.) A new organization has been formed just to advocate for backlog problems: EB-5 Visa Relief Group. We shall see where all this leads. This year the draft EB-5 reform legislation did not touch EB-5 backlog problems, while larger immigration bills offered to increase visa numbers for every EB category except EB-5. I welcome more pressure and lobbying on behalf of EB-5 visa relief.

Based what I heard from panels and in conversation at the conference, I would be willing to bet money on the following predictions:

  • The regional center program will get another short-term reauthorization with no changes by the next sunset date of September 30, 2018, as part of the funding bill for FY2019.
  • Another EB-5 bill with longer-term regional center authorization and some EB-5 reforms will be introduced following the midterm elections. The bill will not go anywhere, unless finalized regulations motivate the EB-5 factions to consult with each other, accept painful compromises, and figure out a minimum broadly-beneficial platform that Washington can count on being thanked for enacting. In other words, the bill will not go anywhere.
  • The EB-5 modernization regulations will be finalized in 2018, probably right when I wanted to focus on pumpkin pie and Christmas shopping. The investment amount increases and priority date protections may be modified from the original draft regulations. Litigation around the rollout may come out of New York City.
  • The total number of I-526 filings will fall gradually through 2018, and drop significantly in 2019 as a result in of the regulations and new Visa Bulletin cut-off dates. Because I predict a fall in demand overall, my projections for China visa numbers are more optimistic than Charlie’s. I think that rest-of-the-world demand will fall after 2019, leaving more visas left for China.
  • When new Visa Bulletin cut-off dates are imposed in 2019, many people will express surprise that the cut-off dates and associated visa wait effect people who invested back in 2017 and 2018. If the visa cut-off dates come earlier than expected as a result of more/faster-than-expected I-526 approvals, people will be surprised by that too.
  • With increasing pressures and alternatives, many regional centers, real estate companies, and service providers (and some past investors) will look to exit EB-5 in 2019.
  • Litigators will keep busy, cashing in on questionable interpretations by USCIS and investor frustration with wait times, issuer redeployment decisions, and project progress.
  • I-526 processing times will improve significantly with the fall in I-526 receipts. EB-5 will become a fast track again for investors from low demand countries, escrows contingent on I-526 approval will become feasible again, and new types of projects will find opportunity in EB-5.

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

FY2018 Q2 EB-5 Form Processing Statistics

July 17, 2018 37 Comments

USCIS has updated its Immigration and Citizenship Data page with statistics on forms received, processed and pending in the second quarter of FY2018 (January to March 2018). Form I-526 and I-829 are in the Employment Based subsection, and Form I-924 is in the Forms subsection in the “All Forms Report.”

My charts below summarize FY2018 Q2 data compared with previous quarters, and highlight trends. A few notes:

  • IPO processed a few more forms in FY18 Q2 than ever before. It’s nice to see processing trend in a positive direction, and a new record set. Once could wish for more dramatic improvement. The chart of quarterly processing volume over the past three years shows a very gradual upward trend. I-526 and I-924 volume (approvals+denials) improved significantly in Q2, but net improvement remained low when considering reduced I-829 volume.
  • Form receipts at IPO reflect a gradual downward trend, driven by falling I-526 receipts. However I-526 receipts remain unsustainably high. The 10,000 annual quota of EB-5 visas means that the program can accommodate about 830 I-526 per quarter on average (assuming about 3 visas per investor). FY18 Q2’s unusually low 1,607 I-526 receipts is still almost twice the sustainable average: one quarter’s filings sufficient to claim half a year of visas.
  • Form I-924 receipts and processing were both significantly elevated in FY18 Q2. No wonder I-924 processing times look better than expected. I-924 denial rates remain high.
  • I-829 receipts grew in FY18 Q2, even as processing volume fell again, with fewer I-829 processed in Q2 than in any of the previous three quarters.
  • If we could predict processing times by dividing number of pending forms in Q2 by number forms processed in Q2, then I-526 would take 17 months, I-829 36 months, and I-924 16 months. This prediction differs from the month ranges currently in the USCIS Processing Times Report: 20-26 months for I-526, 30.5-39.5 months for I-829, 19.5-25.5 months for I-924. I tried several equations with the pending and volume numbers, and (unlike last quarter) didn’t find one that neatly replicates the USCIS processing time calculation.
  • In case I-829 petitioners didn’t have enough to worry about already, the I-829 data doesn’t look right. The FY18 Q2 report reviews Q1 data, as follows: 694 receipts, 6,251 pending. But the Q1 report published in May had quite different numbers for Q1: 1,046 receipts, 6,673 pending. To where did those 352 receipts and 422 pending petitions from Q1 disappear? Or maybe they didn’t disappear, but joined other petitions of unknown origin, since the number of petitions reported pending at the end of Q2 (7,447), is higher by almost a thousand than what one would expect from taking Q1 pending petitions plus Q2 receipts minus Q2 approvals and denials. Hope USCIS can soon modernize beyond paper and counting sticks for keeping EB-5 records. Or am I missing something?

Filed under EB-5 Statistics, Updates from USCIS

I-526 and EB-5 visa wait times; country-specific effects of potential changes

June 18, 2018 31 Comments

I’ve written separately about I-526 processing time and the EB-5 visa wait time, but find that people get confused about how those times interact. How does I-526 processing time affect the total time to get an EB-5 visa? From what point do we calculate the visa wait? What factors and potential changes could compress or expand the full process from priority date to green card for people from different countries?  This post addresses such questions.

Note that the path to conditional permanent residence has two separate, sequential steps (Step 1 and Step 2 in Figure 1), but we usually calculate timing for each step from the same starting point (Time A and Time B in Figure 1).  An immigrant investor’s priority date – the date that USCIS received his I-526 petition – marks his place in line for I-526 processing (which is first-come-first-served in principle) and also his place in line for a visa. An investor must wait for I-526 approval before he can take the next step and submit a visa application or file for status adjustment.  But once he gets to the visa application stage (Step 2), his place in the queue for a visa doesn’t depend on the date he finished Step 1 (I-526 approval) but on the date he started Step 1 (I-526 receipt). This is so because anyone who files I-526 is effectively putting herself in the visa queue, even though she hasn’t progressed yet to the point of being qualified to file the visa application or I-485.  INA 203(e)(1) stipulates that available EB-5 visas are issued to eligible immigrants in the order in which the immigrant petition was filed. So when Charlie Oppenheim at the Department of State Office of Visa Controls estimates a two-year wait time for Country A, he is talking about two years from priority date to visa availability, not two years from I-526 approval.  To estimate wait times for new applicants today, it’s necessary count both chickens (documentarily-qualified applicants currently ready to file for a visa) and eggs (people who have filed I-526 petitions that may eventually hatch and yield visa applications). Therefore, with reference to Figure 1:

  • For an investor of any nationality, Time B is, at minimum, longer than Time A, because an investor isn’t qualified to apply for a visa until after I-526 approval.
  • For investors from countries without excessive demand, Time A can be the major factor determining the length of Time B. I-526 processing times have tended to be lengthy for all countries (averaging around 2 years). But once having received I-526 approval, the investor from a country with no cut-off date will have a visa number available right away and can progress straight to the visa application or status adjustment process to claim that visa. Only investors from countries over or near the annual per-country limit need to worry about waiting years for a visa number, making Time B very much longer than Time A.
  • For an investor from a country exceeding the annual 7% per-country limit, Time A becomes relatively insignificant (personally) because Time B will be long regardless of the individual’s Time A. As a Chinese investor, I may not care about the timing of I-526 approval if  have a decade to wait for conditional permanent residence regardless. The visa queue is ordered by priority date, not date of I-526 approval, so an expedite in Time A doesn’t expedite Time B for investors from significantly oversubscribed countries.
  • Because the visa waiting line technically starts with priority date, we have to look at I-526 receipts, not just I-526 approvals or current visa applications, to estimate Time B. Prospective Indian investors may wonder why there’s already an informal visa wait time estimate for Indians filing today, even though India shows as current in the Visa Bulletin. That’s because today’s Visa Bulletin just reflects what’s currently happening in Step 2. The prospective investor needs to predict how the Visa Bulletin will look in the future, when he can progress to Step 2. And that future Visa Bulletin will depend on what’s happening in Step 1 now, and the volume and nationality of people entering the system and receiving priority dates.

How long is Time B, for various countries? The latest rough estimates (as of April 2018) suggest the following time between priority date and visa availability for new investors from different countries filing today: China, 15 years; Vietnam, 6 years; India, 5 years; Brazil and South Korea (and maybe Taiwan), 2 years. (Update: see estimates as of October 2018 here.) Times for everyone else are just based on estimated petition processing times, assuming no wait for a visa number. (There’s a potentially significant time factor between visa availability and actually getting a conditional green card, depending on how busy the appropriate consulate or service center happens to be, but this time is so variable that I haven’t tried to account for it in my Time B calculation.)

Many factors could change the estimates for Time B, or cause the reality to be longer or shorter for people of various nationalities who have entered the EB-5 process.

Possible Change: USCIS improves I-526 processing, increasing volume of adjudications and reducing I-526 processing times.

  • Likelihood of this change: High. IPO processed 30% more I-526 in FY2017 than FY2016, and hopes to continue to improve performance
  • Impact of this change, if it occurs:
    • China: Negative effect. More approved I-526 means more approvals for countries other than China, which means more visa applications from outside China and fewer leftover visas available to the China backlog. Fewer leftover visas annually means longer Time B for Chinese investors.
    • Vietnam, India, Brazil, S. Korea, Taiwan: Mixed effect. These countries are or will be too new in the backlogged category to compete for leftover visas in any case (since China has enough older backlogged applicants to claim all leftover visas for years). An increased volume of rest-of-the-world applicants may not hurt countries that can’t expect more than their personal allotment of 700 visas a year regardless. However, more and faster I-526 approvals could mean that India, Brazil, and possibly South Korea and Taiwan get cut-off dates sooner than expected. (Charlie Oppenheim knows that they’re already probably oversubscribed, based on counting eggs, but he doesn’t set cut-off dates until the eggs actually hatch into chickens, i.e. until immigrant investor petitioners are documentarily qualified to apply for a visa.)
    • Rest of the world (any countries well below 250 investors per year): Positive effect. So long as a country doesn’t risk generating over 700 visa applications in a year, its investors can only benefit from improved I-526 processing time/volume. With no hold-up to wait for a visa number, short Time A means short Time B.

Possible Change: Legislation removes the per-country numerical limit for the EB-5 category, such that individual countries aren’t limited to 7% of EB-5 visas when the category is oversubscribed.

  • Likelihood of this change: Possible. Border Security and Immigration Reform Act of 2018 (H.R. 6136), the compromise immigration legislation just introduced by House GOP leadership, proposes this change in Sec. 2102 (page 192).
  • Impact of this change, if it occurs:
    • China: Positive effect. With no per-country limit, the visa waiting line would simply be in order by priority date. Having been held back with cut-off dates for years, Chinese applicants have the oldest priority dates in the system. Thus, with no per-country limit, the huge pool of backlogged China-born investors would move to the front of the line for visas. Based on the number of old Chinese applications in the system, they could take 100% of available visas for the next 2-3 years, and be on equal footing with contemporary applicants from other countries thereafter. Time B for a China-born investor with priority date from 2014-2016 would decrease dramatically. Time B still wouldn’t be short for a China-born investor filing today (about 9+ years unless many previous applicants drop out, as they might), but that’s much better than the current estimate of about 15 years.
    • Vietnam, and any soon-to-be oversubscribed countries (India, Brazil, etc.): Negative effect. The per-country limit means that each backlogged country can expect to get at least about 700 visas annually. Without the per-country limit, all more recent applicants would find themselves in line behind tens of thousands of China-born applicants with earlier priority dates. Time B (currently estimated at 5+ years for new investors from Vietnam/India and 2+ years for Brazil/South Korea) would likely expand to 9+ years for all new investors regardless of country, in absence of per-country limits.
    • Rest of the world: Negative effect. The per-country limit currently protects low-volume countries from the effects of excess demand for EB-5 visas. Even with a decade of current/potential visa applications already in the system, new applicants from low-volume countries can expect a visa promptly because high-volume countries get held back. With no country-specific limits, new investors would join a line that’s about a decade long without regard to nationality.

 Possible Change: Legislation increases the number of EB-5 visas available annually.

  • Likelihood of this change: Possible. We need this change so badly, and advocacy dollars should focus on this issue. But I haven’t seen EB-5 visa number increases in any recent legislative proposals – not even in H.R. 6136, which proposes additional visa numbers for every EB category except EB-5.
  • Impact of this change, if it occurs: Positive for all past and future EB-5 investors from all countries.

Possible Change: Legislation or regulations implement higher minimum investment amounts that significantly depress new demand for EB-5. (Or other factors significantly depress new demand: e.g. investors in potentially-high-volume countries get discouraged by wait times, the U.S. becomes a less attractive destination for immigration or investment, EB-5 becomes a less attractive financing option for U.S. companies.)

  • Likelihood of this change: High. All legislative and regulatory proposals include higher investment amounts. The most imminent proposal – regulations possibly on schedule to be finalized in August 2018 – have investment amounts high enough to kill demand almost entirely, many EB-5 promoters say. Even if investment amounts do not increase, or increase only moderately, EB-5 has plenty of challenges and complications with potential to moderate future demand.
  • Impact of this change, if it occurs:
    • China: Positive effect. Fewer incoming immigrant investors means less competition from rest-of-the-world for available visa numbers
    • Vietnam, and any other high-demand countries: Positive effect. Reduced demand reduces risk for investors already in the system that their countries will become or stay oversubscribed.
    • Rest of the world: Neutral. Low future demand does not improve wait times for people already in the system from countries with no cut-off date.

Possible Change: Demand for EB-5 grows, and countries besides China produce a sufficiently high volume of EB-5 petitions to exceed the per-country limit.

  • Likelihood of this change: Fairly high. The Department of State already predicts cut-off dates in the next couple years for five to six countries in addition to China. And media reports indicate aggressive EB-5 promotion outside of China, particularly in India and Brazil.
  • Impact of this change, if it occurs:
    • China: Positive effect. Time B for China-born applicants depends primarily on the number of visas leftover each year from the “rest of the world” with no cut-off date. As soon as another country exceeds the per-country limit and gets a cut-off date, it’s removed from and reduces the size of that “rest of the world” pool, thus leaving more visas on the table for older China-born applicants.
    • Vietnam, and any other countries to be oversubscribed: Negative effect. Time B expands dramatically for a country as soon as it’s oversubscribed. Vietnam and subsequent countries don’t benefit the way China does from each additional country to get a cut-off date, because these countries don’t have applicants old enough to compete with China for visas leftover from the rest of the world.
    • Rest of the world: Positive effect. Each additional country to get a cut-off date reduces competition for available visa numbers.

Possible Change: Demand for EB-5 diversifies, with more investors coming from outside China, but spread out so that few individual countries exceed the per-country limit.

  • Likelihood of this change: Moderate. It’s much easier to raise a lot of EB-5 money from one country than from many countries, so concentration has been the rule to date in EB-5. But data has suggested a trend toward diversification.
  • Impact of this change, if it occurs:
    • China: Negative effect. Time B for China-born applicants depends primarily on the number of visas leftover each year from the “rest of the world” with no cut-off date. As that “rest of the world” pool grows, visa availability for China shrinks, and wait times grow.
    • Vietnam, and any other countries to be oversubscribed: Neutral effect. They aren’t competing for “rest of the world” visas anyway, thanks to China’s earlier priority dates.
    • Rest of the world: Negative effect. Each new applicant with no cut-off date increases competition for available visa numbers.

Possible Change: People already in line for an EB-5 visa despair about Time B and withdraw in large numbers from the EB-5 process. (Or other attrition factors come into play: more petitions get denied, more projects fail, more deaths and divorces occur, children age out or don’t get born.)

  • Likelihood of this change: Moderate. On the one hand, current wait time estimates are devastating for some investors (especially, China-born investors in the past couple years), undermining their immigration objectives and their investment projects. This could precipitate voluntary withdrawal, not to mention attrition from children growing up and more time for divorce and death and project failure. On the other hand, EB-5 investments are major and real at-risk investments, committed regardless of the immigration process. Giving up is not easy. Also, many people do not read my blog and are not well-informed about timing issues.
  • Impact of this change, if it occurs:
    • China: Positive effect for some. Each China-born applicant who withdraws from the process reduces the time that more recent China-born applicants have to wait for a visa.
    • Vietnam, and any other countries to be oversubscribed: Mixed effect. Mass exodus of past investors would reduce competition for available visas, but also involve collateral damage to the EB-5 program as a whole (in terms of public relations and damage to companies deploying EB-5 investment, not to mention the human cost for the prospective immigrants involved).
    • Rest of the world: Mixed effect. Countries without cut-off dates do not compete with the backlog anyway, so reducing the backlog has little effect on timing for these countries. But large-scale failure of previous EB-5 applications would damage the EB-5 program as a whole.

Other related posts:
AILA/IIUSA Forum Updates (Kendall, Oppenheim, visa availability) November 5, 2018
Visa Numbers (FY2018 Q3 and conference update) July 27, 2018
How Long Does I-526 Take? (III) May 18, 2018
Visa Numbers (China, Vietnam, India, Brazil, S. Korea, Taiwan) April 23, 2018
EB-5 Visa Waiting Line and Visa Allocation April 8, 2018
EB-5 Timing Issues and Visa Wait: Process and Data October 13, 2017

Benefit from this blog? Please support 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. Contributions go to Lucid Professional Writing, a for-profit business, to fund work on this blog. Thank you!

Filed under EB-5 Statistics

How Long Does I-526 Take? (III)

May 18, 2018 17 Comments

2020 UPDATE: I-526 timing factors have changed since this post was published in May 2018. For updates, please see:

— Original Post —

This post combines, updates, and replaces my two previous posts on I-526 processing times. I’ve divided the post into six sections:

How much time does USCIS take to process an I-526 petition? The short answer: usually between 3 and 33 months. The rest of this post provides the long answer.

Interpreting Official USCIS Processing Time Information

USCIS addresses the processing time question on the EB-5 filing tips page:

How long does USCIS take to process a Form I-526 petition?
For current estimates, see USCIS Processing Time Information. However, processing times can vary depending on the circumstances of each case. These include factors such as the time it takes to complete a background check and whether we need to request additional evidence.

Since, March 23, 2018, the USCIS Processing Time Information page for I-526 has looked like this:

The report claims that “We generally process cases in the order we receive them,” and provides two pieces of information: an estimated time range, and a case inquiry date.

  • What “Estimated time range” means:  This month range gives a theoretical average processing time and an upper limit. The lower number (25 months) is an average that’s calculated by dividing the number of I-526 petitions pending at IPO by the average number of petitions that IPO has been processing in a month. The higher number (32.5 months) is “generally” the lower number multiplied by 1.3. Cases that take longer than 32.5 months to process have exceeded an arbitrary “upper limit” for “normal” processing times, and considered outliers. The month range provides a reasonable theoretical estimate for I-526 processing times. However, we have no evidence that the dates broadly reflect the actual ages of cases currently being adjudicated at IPO. Quite the contrary, in fact, as discussed below. (Source of my interpretation: USCIS’s More Info page, which says that we “continue to use our old method to calculate processing times” for non-pilot forms such as I-526, combined with an Office of Inspector General report exposing the “old method” for calculating processing times in the I-485 context, and corroborated by reproducing USCIS’s presumed time range calculation using public data on I-526 pending petitions and volume of adjudications.)From March 23, 2018 to May 18, 2018, the Processing Time Information Report Estimated Time Range for I-526 has remained unchanged: 25 to 32.5 months. Since the Estimated Time Range appears to be a broad theoretical calculation, not dependent on fluctuating reality, I expect it to remain unchanged in the report indefinitely, regardless of what’s happening on the ground at IPO. [Update: on 5/31/2018, the report was updated to show 20-25.5 month range for I-526.]
  • What “Case inquiry date” means: As the Processing Time Information page explains,

    We have posted a Case Inquiry Date … to show when you can inquire about your case. If your receipt date is before the Case Inquiry Date, you can submit an “outside normal processing time” service request online.

    From March 23, 2018 to May 18, 2018, the Case Inquiry Date for I-526 has remained constant: today’s date minus 971 days. (I spot check the webpage periodically, and log the reports in my IPO Times file.) The webpage claims that the report gets updated “around the 15th of each month,” but that has not been true yet.

    Like the Estimated Time Range, the Case Inquiry Date appears to be merely theoretical and functional. It’s more-or-less simply the upper end of the Estimated Time Range, converted from a month into a calendar date. It does not claim to be the date of cases that IPO is processing now. It’s just the cut-off date that IPO has set for complaints – and naturally IPO would choose to put that date back as far as possible. If you want to estimate when you may start to complain, add 971 days to your priority date. But your I-526 will get a decision before that date, unless it’s an outlier. And I predict that variable currently set at 971 will be adjusted downward eventually, assuming that IPO continues to improve processing speed. [Update: on 5/31/2018, the report was updated to show I-526 case inquiry date of 761 days ago, rather than 971 days ago]

Predicting Average Processing Times

Average processing time is theoretically a function of inventory (number of pending petitions) and flow rate (rate at which IPO approves and denies petitions). You can get the input data for this equation from the USCIS Immigration and Citizenship Data page, which posts quarterly reports for I-526 and other forms. My I-526 Time spreadsheet turns the quarterly data into a prediction model that estimates average processing times as a function of petition volume at different points in time (with some assumptions about future trends). The last quarterly report indicated 24,627 I-526 pending at IPO in December 2017 and an average of 2,954 petitions processed per quarter over the last four quarters. 24,627/2,954 = 8.3 quarters to process the pending petitions (estimated average). So an I-526 petition filed in January 2018 would be theoretically likely to wait 8.3 quarters (25 months) for processing, other factors being equal. That’s consistent with the Processing Times Information page, which starts the Estimated Time Range at 25 months. But unequal reality leads to some petitions being processed more quickly.

Understanding Variation in Processing Times

Here’s what IPO has said about I-526 time variation (summarized from communications copied in my log of IPO communications on processing times).

  • DHS estimates that the average Form I-526 gets 6.5 hours of touch time.  That means an adjudicator spends less than a day handling the case —  the remaining (and most variable) processing time is queue time and time spent waiting for additional evidence or supervisory approval.
  • IPO has at least three queues going for I-526 petitions: (1) a queue for direct EB-5 petitions; (2) a queue for regional center petitions based on investment in projects that haven’t yet been reviewed; (3) a queue for regional center petitions based on investment in projects that have Exemplar I-526 approval or previous I-526 approvals.  The following chart illustrates my understanding of IPO Deputy Chief Julia Harrison’s description of the process.

    IPO indicates that each queue has dedicated staff working on it. Petitions within each queue are ordered by earliest filing date. A regional center petition for a project not previously reviewed must wait in Queue 2 (for project-specific adjudication) and then again in Queue 3 (for investor-specific adjudication). RC petitions for previously-approved projects advance straight to Queue 3. IPO encourages communication between team leaders on the Queue 1 and Queue 2/3 side to ensure that direct and RC petitions filed at the same time move forward concurrently. With this complex process, it’s unsurprising that IPO appears far from its intention to process cases more-or-less in the order in which they are received.
  • Factors that can speed I-526 processing per IPO:
    • Investing in a project with an approved Exemplar and/or previously-approved I-526
    • Having a clear, high-quality petition (this is important when evidence requests and supervisory approval are the major variables — besides queue time — in overall processing time)
    • Having an approved expedite request (this shortens the queue time, not the adjudicator touch time).
  • Factors that can slow I-526 processing per IPO:
    • Having a petition that’s poor-quality, unclear, problematic, or otherwise inspires IPO to request additional evidence
    • Filing with/after a surge of other people who filed poor-quality petitions
  • Factors that don’t affect I-526 processing time per IPO:
    • The investor’s nationality. (IPO does not currently sort petitions by nationality. There is no hold-up for China-born petitioners at the I-526 stage, as there is at the visa stage. However, IPO asks whether they should change that — considering that fast I-526 approval doesn’t help China-born investors facing a long visa wait regardless. Also, stats show that I-526 denial rates are much higher for some countries than others, which makes me suspect that IPO finds some countries’ source of funds and background checks more challenging than others – which could naturally be associated with longer processing times. So even if the process is FCFS for all nationalities, it’s probably not FIFO for all nationalities.)
    • Whether the petition is for a direct or regional center investment. (IPO claims that they try to move direct and RC petitions forward concurrently. However there may be some regional center advantage in practice since direct petitions are often the first in a project and cannot take advantage of Exemplar approval.)
    • Project size. (IPO reports that they do not privilege petitions for big projects with many investors. But some anecdotal evidence suggests otherwise.)
    • TEA status. (Some legislative reform proposals have suggested offering quicker processing to petitions based on investment in a Targeted Employment Area, but IPO does not report having any such policy now.)

Expedited Processing
EB-5 forms, like other immigration forms, can apply for and benefit from expedited processing under certain limited conditions. Expedited processing reduces the time a form takes to reach an adjudicator’s desk. It does not reduce the time to adjudicate the petition, and does not reduce the visa wait time for petitioners from countries with a cut-off date.

Individual Processing Time Experience

Individual processing time variation means that some people wait longer than the theoretical average 25 months for I-526 approval, while others receive approval much more quickly.

My best evidence for faster-than-average approval is priority dates for pending visa applications. If all I-526 take 2 years to process, then Department of State should have been receiving applications in 2017 from people who filed I-526 in 2015. In fact, as of October 2017 Department of State reported having over 1,500 pending visa applications based on I-526 petitions filed in 2016 and 2017. Assuming an average 3 visa applications per approved petition, that reflects about 500 I-526 petitions approved and advanced to the next stage within a year of filing. And the DOS report only mentioned pending applications for five countries, not counting all applications for the year. I-485 inventory statistics likewise show many pending status adjustment applications with recent priority dates.

I set up a Google Form to collect reports of processing time experience from individual investors. (Entries still welcome!) In the very limited sample of entries so far (which appear in this Google Sheet), I-526 approvals in 2017/2018 that were reported to me had an average processing time of 19 months, with standard deviation of 7 months. The following tables summarize results reported in my Form so far.

Resources for Investors

Additional Note

My series of timing posts is missing an important piece: analysis of the steps and time factors (for countries with no cut-off date yet) between receiving the Form I-797, Approval Notice for the I-526 and claiming an EB-5 visa number. Especially Indians are trying to calculate: if I can count on receiving I-526 adjudication in the next few weeks, can I count on getting allocated a visa number in the advance of the Visa Bulletin giving a cut-off date for India? The point at which the visa number actually gets allocated, and the factors/timing between I-526 approval and that point, vary between I-485 and consular processing, and I don’t understand it all yet. But potential investors should include this in discussions with counsel, because delays can be considerable for consular processing anyway. I’m hearing reports of USCIS taking  8+ months just to forward I-526 approvals to the National Visa Center. Ironically, it seems that the faster USCIS adjudicates I-526, the more it drags its feet on advancing that approval to the next stage. But this is a developing situation, and I have limited examples. Here is my background reading list so far FYI. Please email me any additional helpful articles and current timing information.

UPDATE: I’ve added a EB-5 Timing page to collect links to all data and posts related to EB-5 visa availability, visa allocation, and wait times.

Filed under EB-5 Statistics

FY2018 Q1 EB-5 Form Processing Statistics

May 1, 2018 19 Comments

USCIS has updated its Immigration and Citizenship Data page with statistics on EB-5 forms received, processed and pending in the first quarter of FY2018 (October to December 2017). Form I-526 and I-829 are in the Employment Based subsection, and (I belatedly realize) Form I-924 is in the Forms subsection in the “All Forms Report.” (The row title is labeled “I-924/924A” for some quarters’ reports and just “I-924” in others, but it’s evident from the numbers that the data is for I-924 only, not including I-924A. I assume the row comprises initial applications and amendments.) This processing volume information provides the best picture we have of the progress and prospects for IPO processing.

My charts below summarize FY2018 Q1 data compared with previous quarters, and highlight trends. A few notes:

  • IPO processed fewer forms overall in FY2018 Q1 than in the previous quarter. The volume of I-526 and I-924 processed stayed about the same on average over the past few quarters, while I-829 volume leapt and then tumbled. I had hoped for a more positive growth trend, and was disappointed.
  • However, annual numbers trend in a positive direction, with IPO improving processing volume every year, and annual adjudications growing at a slightly faster rate than annual receipts.
  • I-526 and I-924 receipt numbers continue to correlate with regional center program sunset dates, but with smaller and smaller surges.
  • I-829 receipts increased last quarter as expected following the mysterious dips in previous quarters.
  • I-924 adjudication has been remarkable for number of denials.
  • IPO ended December 2017 with about twice as many pending I-526 and I-829 as it’s proven able to process in a year, and nearly three times as many I-924. So if we estimate processing times by dividing inventory by flow rate, that yields a 2-year processing time estimate for I-526 and I-829, and three-year estimate for I-924. That volume-based estimate matches exactly with the base month that USCIS posts on its new Processing Time Information page for I-526 and I-829, which makes me think they’re using the same equation. USCIS’s processing time estimate for I-924 is much lower, however. Maybe they plan to dramatically increase volume of I-924 adjudication, or disappear some of the pending backlog?
  • FY2018 Q1 showed fewer I-526 adjudications and more I-526 receipts than I’d expected, so I recalculated my I-526 time prediction model accordingly.

Now that I’ve chosen to spend so much time sweating over Excel and Photoshop and injuring my eyes to make this post better than it needs to be, and as helpful as possible to you, I shall recopy my Paypal plug below. (Thank you to the 26 readers who contributed to the blog since I opened the option last month.)

Benefit from this blog? Please support 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. Contributions go to Lucid Professional Writing, a for-profit business, to fund work on this blog. Thank you!

Filed under EB-5 Statistics

4/23 Visa Numbers (China, Vietnam, India, Brazil, S. Korea, Taiwan)

April 25, 2018 41 Comments

[10/30/2018 UPDATE: for more recent data and predictions, see my post AILA/IIUSA Forum Updates (Kendall, Oppenheim, visa availability)]

Visa Numbers Update

Charlie Oppenheim, Chief of the Visa Controls Office at the U.S. Department of State, spoke about EB-5 visa numbers and allocation at the IIUSA conference on April 23. This post summarizes interesting data from his slides. (The tables pictured below are also in my increasingly untidy Backlog Calc Excel file. When I have time, I’ll reorganize the file and recalculate projections.) I’m relying on a partial video recording and reports from others for this post, not having heard Mr. Oppenheim’s talk in person. When someone at the conference posts a substantial report, I’ll link it here. As always, I welcome corrections. [Update: other reports on this presentation from IIUSA and Wolfsdorf Rosenthal.]

Highlights from Mr. Oppenheim’s presentation [with my commentary in brackets, and images showing my summaries of data points from the presentation]:

  • USCIS has picked up the pace on I-526 adjudication. The National Visa Center received 25% more EB-5 applicant petitions in 2017/2018 than 2016/2017. That reflects I-526 processing improvement (good news), and results in more people ready to claim available visas (bad news for the visa backlog).
  • Visas can be issued by Department of State through consular processing (for applicants residing outside the US) or USCIS through I-485 status adjustment (for applicants in the US). Historically most EB-5 visas have come through DOS, but we’re seeing a steady increase in visas through status adjustment: 991 in FY2015, 1,442 in FY2016, 1,676 in FY2017, and 952 already in the first six months of FY2018. This reminds us to keep an eye on what’s happening at USCIS as well as DOS, when tracking visa number demand.
  • Department of State has seen a dramatic increase in visa applications from people outside China. In just the first six months of FY2018, DOS issued 2,735 EB-5 visas to applicants from outside China – more than in the whole of the previous year. That increase in “rest of the world” visas can be bad news for China, because annual visas available to China depend on leftovers from the rest of the world. [My model estimates that the China line is 10 years long assuming 80% of annual visas available to China, and 15 years long if 50% of annual visas are left to China. Also, I wonder if the “rest of the world” bump could reflect IPO taking initiative to prioritize moving non-China I-526 petitions – an idea they suggested in November 2017.]
  • Based on growing demand, Vietnam, India, Brazil, South Korea, and Taiwan are on Mr. Oppenheim’s radar for potential to trigger the per-country cap and thus get held back with cut-off dates. Vietnam already has a final action date that Mr. Oppenheim expects to advance by several months in 2019 (but not make it current). He expects to set a final action date for India by June 2019 at latest, and for Brazil, South Korea, and (maybe) Taiwan in Summer 2019. The projected final action date for September 2019 is October 1, 2014 (worst case) or October 15, 2014 (best case) for China and other oversubscribed countries. [Cut-off dates for other countries is good news for China, because those countries get temporarily removed from the queue-cutting “rest of the world” pool, and instead stuck in line behind older Chinese applications for leftover visas.]
  • In the Q&A period, Mr. Oppenheim reportedly projected these EB-5 visa wait times: China 15 years, Vietnam 6 years, India 5 years, Brazil and South Korea 2 years. [This time indicates years from today to conditional permanent residence for people filing I-526 today. But these estimates are subject to change depending on future demand trends.]

Consider the lesson from China. EB-5 was still current for China throughout 2014; Chinese applicants didn’t start getting held back with a cut-off date until May 2015. But Chinese investors who filed I-526 back in FY2014 have been affected.  Applicants with 2014 priority dates started getting visas in September 2015 (per the Visa Bulletin) and will still be getting visas into 2019 (per Mr. Oppenheim’s predicted final action dates). That’s a lot of years just to issue conditional green cards to petitioners from one year.  Look at 2014, and then visualize how many years it will take to issue the visas to Chinese who filed I-526 in 2015, 2016, 2017, and 2018, unless something changes. (See my graphic for visual reference.) If Chinese with 2014 priority dates are still in line for visas into the end of 2019, how long will a Chinese with a priority date of today have to wait for a visa? That tower of past petitions is a sobering fact for China, and also any potentially high-volume countries that may end up in line behind China. The prospect of unacceptable wait times creates urgency to advocate for more EB-5 visa numbers. As things are, we can’t keep attracting every year three to four times the number of investors who could eventually get visas in a year, or depend heavily on any one country given the per-country limits.

For additional discussion of factors that could change visa wait times for various countries, see my post I-526 and EB-5 visa wait times; country-specific effects of potential changes (June 18, 2018)

EB-5 Processing Times

Since late March, I’ve been tracking EB-5 forms on the new USCIS Processing Times page. So far the month range has remained unchanged for each form, while the “Case Inquiry Date” has advanced one day per day for each form. No evidence yet of human intervention to update the information, and I rather doubt the link to reality. But for the record, here’s how the system is currently set to auto-advance the “Case Inquiry Date”:

  • I-526 case inquiry date: today’s date minus 971 days (i.e. priority date plus 971 days is the date when one can start to inquire about the petition as being outside normal processing times)
  • I-829 case inquiry date: today’s date minus 893 days
  • I-924 case inquiry date: today’s date minus 663 days

FYI, of people who’ve filled out my I-526 processing experience Google form so far, a majority of those with approvals  in 2018 had priority dates in 2016, and some even in 2017. (Form results here.)  Apparently IPO isn’t simply processing petitions from 2015, as the published Processing Time Information would suggest.

New TEA Data

The Bureau of Labor Statistics has made its annual Spring release of employment data for the previous year, which means a new data set for calculating Targeted Employment Area qualification.  Impact DataSource explains what changed. To learn more, consider signing up for a webinar.

Other Resources

Speaking of webinars, note that the Council of Development Finance Agencies is hosting a course  designed to provide a substantial practical introduction to EB-5.

Filed under EB-5 Statistics

EB-5 Visa Waiting Line and Visa Allocation

April 5, 2018 47 Comments

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)

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. (4/25/18 update: here are notes from Mr. Oppenheim’s presentation. 10/30/18 update: See slide 5 in this presentation, and my recording of a panel on EB-5 visa numbers.) 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, which is what remained after numbers had been allocated to qualified applicants from other countries. (If not for the Chinese Student Protection Act, China could’ve received 700 visas plus the 75% leftover.)
  • When total demand promises to exceed total available visas for the year, then DOS looks at individual countries to see which look likely to exceed the 7% per-country cap, and sets a cut-off date or final action date for each of those countries. When a cut-off date is in place, only people from that country with priority dates earlier than the cut-off date can proceed with visa applications; others are held back. DOS gradually advances the cut-off date to release just enough people to apply for available visas.  At the beginning of the year, different oversubscribed countries can have different cut-off dates. When each country is getting its 7% of visas for the year, DOS looks at each country individually when setting the cut-off dates. When per-country caps have been met, then all oversubscribed countries are just competing together for remaining EB-5 visas left by not-oversubscribed countries. That means they are all in the same line again and will have the same cut-off date. (In practice that puts China at the head of the line for leftover EB-5 visas, since it’s been held back for years and thus its applicants have the oldest priority dates. 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. )
  • Exceeding the 7% cap is scary because it puts a country in the same line as China for leftover EB-5 visas, and near the back of that line based on priority dates and the FIFO process. The saving grace for small countries is that they can at least get 7% of EB-5 visas every year, 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 EB-5 visas available to Vietnam then. What I can’t expect is to get an EB-5 visa left over after not-oversubscribed-countries took what they want, 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 and 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, then they will end up needing many more than 700 visas per year,  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:

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Filed under EB-5 Resources, EB-5 Statistics

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

March 23, 2018 67 Comments

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)

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

FY2017 EB-5 Visas by Country

January 23, 2018 14 Comments

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.

For a running tab of EB-5 visas issued through consular processing by country, see the Department of State’s report of Monthly Immigrant Visa Issuances. (The visas with “5” as the second digit in the three-digit code are EB-5 visas: C51, C52, C53, T51, T52, T53, R51, R52, R53, I51, I52, I53.)

UPDATE: I’ve added a EB-5 Timing page to collect links to data and posts related to EB-5 visa availability, visa allocation, and wait times. If you would like to order a personalized timing estimate, see the EB-5 Timing Estimates Page.

 

Filed under EB-5 Statistics

I-526 processing time (Part I)

December 28, 2017 51 Comments

Update: I have deleted this now-outdated post and replaced it with How long does I-526 take? (Part III)

Filed under EB-5 Resources, EB-5 Statistics

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

December 14, 2017 7 Comments

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)

 

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

Q4 2017 EB-5 Petition Stats

December 8, 2017 20 Comments

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.)

Filed under EB-5 Statistics, Updates from USCIS

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

October 26, 2017 27 Comments

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.”

Filed under EB-5 Law & Policy, EB-5 Statistics, Updates from USCIS

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

October 13, 2017 13 Comments

[2019 Update: My post Forecasting Visa Availability: 5/6 Oppenheim projections and big picture (5/6/2019) provides perhaps a clearer big picture explanation of how the wait line works.  2018 Updates: see also my 4/8/2018 post EB-5 Visa Waiting Line and Visa Allocation and my 4/23/2018 post Visa Numbers (China, Vietnam, India, Brazil, S. Korea, Taiwan)]

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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Filed under EB-5 Resources, EB-5 Statistics

Q3 2017 EB-5 Petition Processing Data

September 21, 2017 8 Comments

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.)

 

Filed under EB-5 Statistics

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

June 8, 2017 14 Comments

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.

Filed under EB-5 Statistics

FY2017 Q1 EB-5 Petition Processing Statistics

April 5, 2017 3 Comments

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.

Filed under EB-5 Statistics

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