Shutdowns, lockdowns, and border closures made for a rocky ride in 2020, especially for participants in the EB-5 Immigrant Investor Program. As U.S. consulates and embassies temporarily shuttered and routine visa services ceased, foreign EB5 investment participants who were in line to finally be granted U.S. permanent residency status watched as their new life in the United States became indefinitely unattainable.
Stateside, United States Citizenship and Immigration Services (USCIS) also closed its doors during the early stages of the COVID-19 outbreak. At the time, the Trump administration enacted a ban on nearly all employment-based immigration. Some would deem it an understatement to describe the year as “bad” for hopeful foreign nationals involved in the U.S. immigration process.
Traditionally, an analysis of EB-5 country-based data on visa issuance provides an insider’s look at EB-5 demand across the globe. Analysts usually focus on topics such as the share of EB-5 investors from particular countries who opt for regional center investment. Articles evaluate the total EB5 investment participants from each nation and the split between those who obtain their EB-5 visas via overseas consular processing versus domestic adjustment of immigration status. This year those elements are certainly included, but the trends are tinged by the filter of a global pandemic.
For 2020, the data is most representative of the lucky few to secure an EB-5 green card despite the massive shutdowns and subsequent bottlenecks in processing. Let’s take a closer look.
FY2020’s Total EB-5 Visas Issued via Adjustment of Status Is Abysmal
One opportunity the global consular shutdowns presented was a domestic office schedule wide open for I-485 petition processing. These submissions come from stateside EB-5 investment participants seeking to update their U.S. immigration status. Theoretically, USCIS could have elected to process pending I-485s en masse, salvaging a huge number of allocated EB-5 visas. Chief of the U.S. Department of State Visa Control and Reporting Division Charles Oppenheim, in fact, declared in November 2020 that approximately 2,500 pending I-485 applications existed for Chinese applicants alone. Alas, the opportunity was missed. In practice, the immigration agency even failed to simply meet FY2019 processing figures on EB-5 visa issuance through adjustment of status.
While Chinese and Indian I-485 petition processing was slightly up, other nations’ numbers actually fell. Brazil, for instance, saw a dramatic 83% decrease (from 214 to just 36) in processed applications between FY2019 and FY2020. On the whole, EB-5 visas issued by way of domestic status adjustment in FY2020 came in below the previous three fiscal years, down by 26% compared to FY2019 totals. And although the percentage of EB-5 visas issued by adjustment of status in FY2020 appears to be higher than previous years, it is due to an overall reduction in the total number of visas issued for EB-5 investments for the year.
The question on everyone’s mind is what prevented USCIS from granting adjustment-of-status visas to the thousands of qualified domestic EB-5 investors when international consular visas were nearly impossible to issue in FY2020. Based on Oppenheim’s remarks, it wasn’t due to a depression in demand. So, the only culprit left is seemingly USCIS’s adjudication team and their snail-paced processing speed.
Additionally, slow Visa Bulletin movement seems the likely culprit behind lower EB-5 visa counts among Chinese EB5 investment participants. All told, the abysmal figures aren’t solely attributed to the pandemic, however. A downtrend has been apparent among EB-5 visa issuance since FY2018. How does that play into FY2020 EB-5 country trends? We’ll explore that next.
Steady Downtrend in EB-5 Visa Issuance Spirals in FY2020
The most notable effects of the pandemic on the EB-5 program are revealed in the overall total number of EB-5 visas that were issued in FY2020. Remember, the EB-5 program had a windfall of more than 11,000 visas available for issue in FY2020. Yet, there were only a few more than 3,500 actually issued. Nearly 7,500 EB-5 issues were lost as thousands of qualified EB5 investment participants continued to wait. EB-5 visas granted via consular processing totaled about 2,400 (a 69% decrease year over year), and I-485-based visas issued reached approximately 1,100 (a 26% drop year over year).
Fortunately, the 7,500-visa loss has been offset by massive gains in early FY2021 due to recycled family-based visas reallocated to the EB-5 program. However, with the pandemic still center stage in the U.S. as of March 2021, it’s uncertain whether USCIS will actually issue the allotted visas. In the meantime, we pan out from the scope of pandemic-related effects to review overall EB-5 issuance by country in FY2020.
FY2020 EB-5 Visa Issuance by Country
As a quick recap, the majority (46%) of all EB-5 visas issued throughout FY2020, consistent with EB-5 history, were granted to Chinese investment participants. The two other major markets were India and Vietnam, with a sizable 17% and 13%, respectively. South Korea came in next with only 4%.
Regional Center Investments Remain Most Popular Option
The choice to affiliate with a regional center for an EB-5 investment has remained an overwhelmingly popular one among investors. In fact, a whopping 91% of those lucky enough to secure an EB-5 visa at all in FY2020 did so through regional center investments. Looking at countries with 20 or more EB-5 visas issued, two of the 15 actually had zero direct investments: Mexico and Japan. Others had very few. The UAE and Russia, for instance, only had two direct investors in FY2020. That said, Iran stood out among direct EB-5 investment participants with 14 (still only about a quarter of its total 54 EB-5 investment visas issued).
Despite Shutdowns, Consular Processing Topped Adjustment of Status Issuance
Interestingly enough, the total shutdown of consular processing for half the fiscal year didn’t stop USCIS from doling out over half the total EB-5 visas issued in FY2020 through consular processing. EB-5 visa issuance through consulates happened in all major EB-5 countries except Venezuela, and consular processing accounted for 96% of Iranian EB-5 visas issued, suggesting almost no EB-5 visas issued to Iranian investors in the second half of the fiscal year. How is this possible? It seems that even though it was virtually impossible for USCIS to issue EB-5 visas through foreign consulates for half the year, the agency was apparently unequipped to efficiently shift gears to adjustment of status EB-5 visas instead.
Data Points to Deeper Issues Than Pandemic-Related Closures
So, when were the 2,400 or so consular-issue EB-5 visas granted? They were likely distributed between October 2019 and February 2020. Soon after, temporary closures swept the globe in the face of the COVID-19 pandemic. Still, even if the outbreak hadn’t occurred, and we assume USCIS continued its snail-pace processing, a quick calculation says the annual total would have only reached 5,000 or so—and possibly another 1,500 from I-485 petition approvals. At best, roughly 6,500 visas would have been issued, which would have still been the lowest total EB-5 visas issued in the last four years. Importantly, this casts doubt on the pandemic and its subsequent closures as the sole cause of low processing, instead pointing to a deeper ongoing issue within USCIS.