Two major happenings have brought changes to the EB-5 Immigrant Investor program in 2020. A new visa availability approach has been implemented, and the COVID-19 global pandemic continues to impact the program. Learn about how these two events can be considered major catalysts for change to the EB-5 program.
The New Visa Availability Approach Yields Noticeable Shifts
In March 2020, three months after its initial announcement, the new visa availability processing approach for I-526 petitions was enacted. The true impact of this new approach has yet to be fully understood. While it has yielded noticeable shifts to EB-5 investors’ journeys, the Check Case Processing Times page on the United States Citizenship and Immigration Services (USCIS) site has not been updated accordingly.
One obvious shift for I-526 adjudication is that historical processing times are noticeably speeding up. This is great news. Between October 2019 and January 2020, for instance, average processing times on these petitions were at a five-year historical low at just over a year, according to the website.
Moreover, a greater number of EB-5 investors report they have received their adjudications since the COVID-19 pandemic began. It seems the public shutdowns have left the Immigrant Investor Program Office (IPO) to adjudicating its stacks of petitions – another bit of good news for those investors waiting on their I-526s to be approved. However, that isn’t the only impact the pandemic has made.
How the Global Pandemic May Play into the EB-5 Program
Across the United States, the economic impacts of the global COVID-19 pandemic continue like regional shockwaves. Because the EB-5 program already incentivizes investors to infuse capital into high-unemployment areas (also known as targeted employment areas or TEAs), it could prove to be the silver lining the U.S. economy needs. While the EB-5 program may have the resources to help, though, the TEA system as is won’t suffice to allow a proper response to the economic downturn in the wake of COVID-19.
Why not? It’s an issue with the timing of data releases. TEAs are designated based on average unemployment rates from the previous year. This means I-525 petitions in 2020 are informed by 2019 data. In turn, figures reflecting the astronomical job losses experienced in 2020 won’t register until 2021. Furthermore, final numbers will also factor in things like how long the crisis ultimately lasts, the number of businesses forced to shutter permanently, and the timeline on an economic rebound.
Another reason? The EB-5 program’s TEA system is based on relative unemployment. If the system were to reflect the most up-to-date employment data, an additional problem would quickly present itself in the wake of skyrocketing unemployment nationwide. If too many areas of the country become high-needs regions at the same time, the TEA program would no longer be able to incentivize investment in specific areas. The benefits of TEA designation would only be realized by the very hardest hit regions.
As it stands, the areas impacted the most by COVID-19 are most likely to benefit from the EB-5 program – which is great – but the remainder of the country may not see a direct economic stimulation response. Instead, it will be the more moderate program changes (especially to the TEA system) that may dramatically improve the chances of EB-5 positively contributing to the U.S. economic recovery.