Barreling headlong into FY2021, the EB-5 Immigrant Investor Program has, nevertheless, borne its own set of challenges in the wake of a global pandemic and the subsequent mental, physical, and economic crippling that came with it. Thousands of EB-5 investments were brought to a standstill, with participants unable to proceed in the program due to temporary suspensions of visa services during closures of U.S. embassies and consulates around the world.
That said, not all EB-5 investor news has been bad in 2020 – quite the contrary in some ways. From a lowered risk of needing to redeploy EB-5 capital to increased visas for investors from countries experiencing backlogs in recent months, the pandemic has actually resulted in some advantages for foreign nationals who have already begun the EB5 investment process. Now is an especially ideal time for certain investors to be involved in an active EB-5 investment.
One of the most notable segments of U.S. green card hopefuls is EB-5 investors awaiting next steps on their I-526 petitions – particularly those with I-526 petitions pending and those that have already been approved but are still awaiting a visa interview. For applicants in these categories, the number of available EB-5 visas has nearly doubled in FY2021.
Adjustments to EB Visas Distribution in 2021
Each new fiscal year (October 1), United States Citizenship and Immigration Services (USCIS) allocates a predetermined number of visas to the various EB programs. The EB5 investment program traditionally receives 7.1% of all visas earmarked for EB programs. Give or take, that amounts to roughly 10,000 EB-5 visas annually. On average, that covers around 3,000 EB-5 investors and their qualified family members.
FY2021 calculations will be different, however. The challenges immigrants have faced in 2020 have resulted in a vastly different landscape for EB programs in the coming year. While the pandemic reduced the total EB-5 program visas granted over the course of FY2020, family-based immigration was also greatly impacted by COVID-19. This is good news for EB-5 investors because in a normal year, unused family-based visas are rolled over into the employment-based visa totals in the next fiscal year. On average, the visa allocation to EB programs is approximately 140,000. In FY2021, employment-based visa allocations top out at 261,500 – nearly double! The EB-5 program, in turn, will see an increase to 18,000+ visas.
Chinese EB-5 Investors Likely to Benefit Most
As of October 2020, China and Vietnam are the only two EB-5 countries experiencing backlogs. Following the addition of Hong Kong EB-5 investors to the Chinese queue, the backlog has ballooned even further. This makes the news of surplus visas in the EB-5 program that much more welcome among Chinese EB-5 investors otherwise locked into a holding pattern.
Yes, the massive increase in EB-5 visas benefits all EB-5 investment participants, but Chinese investors stand to benefit most. Why? Because of the way administrators of the EB-5 program further allocate those visas. Here is how FY2021 is likely to shake out:
- The total number of EB-5 visas has catapulted sharply, so the visas available to each individual country has risen too – from around 700 to around 1,300.
- USCIS also estimates both pending I-485 petitions and qualified EB-5 visa applicants as being significantly lower than the total number of EB-5 visas (261,500) earmarked in FY2021.
- All circumstances are aligned for USCIS to dramatically reduce its EB-5 backlogs in FY2021.
It isn’t a stretch for EB-5 investors to expect a vast number of EB-5 visas to be handed over to the droves of Chinese investors who have been buried several years in the backlogs. As a result, FY2021 will quite possibly turn out to be an amazing year for Chinese EB5 investments. The only real obstacle left to overcome is the negative impacts Chinese investors have felt from the April 2020 switch to a visa availability processing approach.