The Department of State (DOS) has released the February 2023 Visa Bulletin, which reflects little progress toward clearing the backlog of pending EB-5 immigrant petitions from Chinese and Indian investors. While the new set-aside visa categories remain available to investors in EB-5 projects located in targeted employment areas—and allow investors from high-demand countries to avoid delays caused by limited visa availability—the USCIS backlog has remained stagnant for many months. Many industry stakeholders wonder when the agency will finally act to expand its processing capacity.
In this article, we analyze the February 2023 Visa Bulletin in the wider context of processing trends in the EB-5 industry.
Cutoff Dates in the February 2023 Visa Bulletin
What Causes Backlogs of EB-5 Visa Applications?
Could USCIS Processing Times Improve?
Cutoff Dates in the February 2023 Visa Bulletin
Chart A of the Visa Bulletin indicates the final action date for EB-5 investors born in India or mainland China. Chinese investors are subject to a final action date of March 22, 2015; the final action date for India is November 8, 2019.
This means that Chinese and Indian investors who filed Form I-526 on or after these dates are ineligible to receive their EB-5 conditional residence Green Cards—even if USCIS has approved their I-526 petitions. (This also applies to Form I-526E, which is the initial petition for regional center investors under the EB-5 Reform and Integrity Act of 2022.)
Chart B contains this month’s dates for filing. Similar to final action dates, investors who have filed Form I-526 after the date for filing are not allowed to apply for their EB-5 visas even if Form I-526 has been approved. China’s date for filing is January 1, 2016; India’s is December 8, 2019.
What Causes Backlogs of EB-5 Visa Applications?
While the yearly allotment of visas made available to the EB-5 Immigrant Investor Program would typically suffice to cover global demand, the DOS allows each participating country to receive a maximum of 7% of the total EB-5 visa supply.
This restriction significantly reduces visa availability for countries with a high demand for EB-5 immigration; in fact, the vast majority of EB-5 petition filings come from a few countries, including China and India. Most nationalities have a low demand for the EB-5 visa and rarely come close to exceeding their yearly EB-5 visa supply.
When the DOS determines that a country’s volume of pending EB-5 petitions exceeds its supply of visas, it considers the country to have entered visa retrogression. Cutoff dates are assigned for retrogressed countries, and its investors often have to wait for several more years before immigrating through the EB-5 program.
As mentioned previously, the new set-aside visa categories currently allow new EB-5 investors to avoid backlog-related delays, even if they were born in a retrogressed country. But Chinese and Indian investors who filed Form I-526 before the set-aside visa categories became available can still expect unconscionable processing times.
In fact, processing data for the DOS’s recent fiscal years shows that the backlog of EB-5 petitions is only growing. While FY2020 ended with a backlog of 10,304 petitions, the backlog in the 2021 and 2022 fiscal years was 11,448 and 11,150 petitions, respectively. Pandemic-related constraints resulted in a significant drop in EB-5 petition filings during this period, indicating that USCIS’s processing capacity remains limited.
USCIS processed only 1,415 I-526/I-526E petitions and 1,621 I-829 petitions (the final petition to remove the conditions on an EB-5 visa) in FY2022.
The excessively long wait times for EB-5 investors from retrogressed countries have a negative impact on demand for the EB-5 program. This, in turn, is detrimental to the U.S. economy, which loses the opportunity to receive funding for real estate developments at below-market rates. From April to September 2022 alone, U.S. businesses received at least $176 million in EB-5 funding, and the volume of EB-5 investment has been significantly higher in previous years.
Could USCIS Processing Times Improve?
In a January 2023 press release, USCIS acknowledged that its capacity for processing immigrant petitions is significantly limited but that the agency lacks the financial resources to do so, given the dearth of petition filings since 2020. Since 96% of USCIS’s funding comes from petition filing fees, the agency has announced its intention to adjust the filing fees for its applications, particularly the petitions for EB-5 immigrant investors.
Under USCIS’s proposed new fees, EB-5 investors will have to pay $11,160 to file Form I-526—a 204% hike from the previous amount of $3,675. Form I-829’s filing fee will also be raised from $3,835 to $9,525 in a 148% increase.
Together, the proposed new filing fees for EB-5 investors will now total $20,685. USCIS plans to use these additional funds to “reestablish and maintain timely case processing, and prevent the accumulation of future case backlogs.” More specifically, the agency will “increase the number of adjudicators processing applications, implement technology improvements, and increase support provided to individuals seeking information and assistance from USCIS.”
The actual impact that higher filing fees will have on the EB-5 industry remains to be seen. While USCIS may be able to process applications faster and reduce its backlogs, the volume of new petition filings may remain low because of the high upfront costs for starting the EB-5 immigration process.
Most likely, USCIS will adjust its filing fees shortly after March 6, 2023. This will make FY2023Q3 a crucial period for the EB-5 industry, and processing data for this quarter will reflect the actual impact of the fee increases.
