Data for FY2020 Q4 (July–September 2020) from United States Citizenship and Immigration Services (USCIS) reveals that the number of filed I-526 petitions for the EB-5 Immigrant Investor Program is the lowest it has been in several years.
This decreased demand may make it an ideal time for an investor to make an EB-5 investment. Visa backlogs faced by investors from certain countries have historically plagued the EB-5 investment program. A decrease in demand could cause these backlogs to be reduced, making this an optimal time to invest.
What Does the Data Reveal About I-526 Petition Receipts?
The number of I-526 petitions filed has dramatically decreased relative to other years in the past decade, excluding FY2019. FY2019 represented a record-low year that saw just 4,194 new I-526 petitions filed, making FY2020’s number of 4,378 petitions a slight 5% increase.
FY2020’s increase was largely due to investors trying to jump in on the chance to make an EB-5 investment at the reduced investment amounts of $500,000 for projects located within a targeted employment area (TEA) and $1 million for projects located outside a TEA. These figures were changed to $900,000 and $1.8 million, respectively, by the Modernization Rule coming into effect in November 2019. Upwards of 97% of FY2020’s I-526 receipts were filed in Q1, before the updated minimum investment amounts came into effect, reflecting a desire by many applicants to make their EB-5 investment before the minimum investment amount increased.
The sudden decrease in I-526 petitions after FY2020 Q1 was also a result of the still-ongoing COVID-19 pandemic. USCIS would only receive a paltry 114 more I-526 petitions for the last three quarters of the fiscal year. During this period, many U.S. embassies and consulates around the world were temporarily shut down, affecting the willingness and ability of potential investors to apply for the EB-5 investment program.
Adjudications of I-526 petitions had already fallen dramatically before the pandemic, but the number of I-526 adjudications in FY2020 was still down 27% from FY2019’s numbers. Thankfully, there has been a slight uptick, with FY2020 Q4 representing the highest number of I-526 adjudications since FY2019 Q1. The percentage of I-526 approvals has also increased from 62% in FY2020 Q3 to 79% in FY2020 Q4.
The increase of I-526 receipts in FY2020 Q1 made the substantial backlogs at USCIS even worse. USCIS had 13,763 unresolved petitions in FY2019, but that increased to 17,468 by FY2020 Q1. The massive decline in new I-526 filings allowed USCIS to lower the number of unresolved petitions to 15,063, but this backlog is still substantial.
How Can EB-5 Investors Benefit from the Reduction in I-526 Volume?
Fewer I-526 petitions signify less competition for EB-5 investment visas, potentially meaning a faster EB-5 journey for investors. The large number of unissued visas in FY2020 has increased the number of visas for FY2021 up to 18,567 EB-5 visas, nearly double the usual number. This means that country caps have increased to roughly 1,300 visas for FY2021.
If USCIS takes advantage of this unique opportunity to cut down the EB-5 visa backlogs, FY2021’s leftover visas could go to Vietnamese and Chinese nationals who have been facing backlogs for several years. Any reduction in the backlogs would also help new investors from China or Vietnam by reducing the estimated wait time.
FY2021 presents USCIS with a unique opportunity to cut down the visa backlogs that have hindered investment since 2014. Although many foreign investors are choosing to forgo investing, this may actually be the optimal time to make an EB-5 investment.