For over three decades, the EB-5 Immigrant Investor Program has allowed foreign nationals to obtain U.S. residency in exchange for providing funding to U.S. businesses. The program remains one of the most popular routes for foreign nationals to relocate to the United States.
However, there are several challenges threatening the reputation of the EB-5 industry, particularly relating to the issuance of EB-5 visas. In a webinar released by the Department of State (DOS) on October 26, 2021, it was revealed that there are currently a large number of EB-5 visas going unused.
In the webinar, Charles Oppenheim from the DOS stated that there are 19,880 visas allocated to the EB5 investment program for the 2022 fiscal year. This exceeds the 18,500 EB-5 visas allotted for the 2021 fiscal year. However, only 368 I-526 petitions had been approved by September 2021, meaning that the vast majority of the allocated visas will go unused.
There are two main factors leading to this large number of unused EB-5 visas. These are the expiration of the EB-5 Regional Center Program and inefficiencies in petition adjudication at United States Citizenship and Immigration Services (USCIS).
EB-5 Regional Center Program Expired in 2021
The high numbers of approved EB-5 investment visas in recent years can be attributed to the regional center program. Investment through regional centers was the most popular option for foreign nationals looking to participate in the EB-5 investment program. It offered favorable conditions, including reduced managerial duties, flexible job calculation criteria, and access to an experienced team of advisors to help with the I-526 and I-829 petitions.
However, the regional center program was suspended in June 2021. USCIS stopped accepting I-526 petitions from regional centers. The agency also stopped processing regional center I-526 petitions that were filed before the program expired.
This has caused setbacks across the EB-5 industry. The effects are felt both by EB-5 participants, as thousands of regional center I-526 petitions remain unprocessed, and by businesses looking to benefit from EB-5 funding. Unless Congress moves to reauthorize the regional center program soon, the economic benefit of the EB-5 program will continue to be limited.
USCIS has long been notorious for its slow processing of visa petitions. The agency does not allocate enough resources toward adjudicating these petitions, leading to inefficient processing and long wait times.
With the expiration of the regional center program, it was anticipated that more USCIS resources might be assigned to adjudicating direct I-526 petitions. However, that has not materialized: USCIS is not processing I-526 petitions from direct EB-5 investments drastically faster, and backlogs of unprocessed petitions continue to build.
Despite these challenges, the EB5 investment program remains popular. In addition, more EB-5 investors can now participate, due to the newly lowered investment threshold of $500,000 following the repeal of the Modernization Rule in June 2021. With a large number of EB-5 visas available in the 2022 fiscal year, prospective investors should take advantage of this opportunity to participate in the EB-5 program.