With 2020 finally over, it is a good idea to reflect on vast number of challenges and changes that the year brought for the EB-5 Immigrant Investor Program. Although United States Citizenship and Immigration Services (USCIS) has not released processing data for the second half of FY2020, the data that is available demonstrates a few clear trends in regard to I-526, I-829, and I-924 petition processing.
Processing volume for I-526 petitions was at an all-time low in the first two quarters of FY2020, leaving many foreign nationals with EB-5 investments frustrated and disheartened. Additionally, the estimated processing time ranges for I-526 petitions reached a record high. However, despite the unfortunate circumstances for I-526 petitioners, I-829 petitioners found themselves in a much more positive situation. I-829 petition processing volume significantly increased in the first two quarters of FY2020, and the data exhibited a 95% approval rate for I-829 petitions.
Aside from I-526 and I-829 petitioners, EB-5 regional centers were also severely impacted throughout FY2020. USCIS continued to terminate regional centers at an unprecedented rate, and the estimated processing times for I-924 petitions were unreasonably long. These issues, along with the impacts of the COVID-19 pandemic, could result in some serious long-term effects for the EB-5 Regional Center Program.
EB-5 Regional Center Numbers Reach Record Lows
The Modernization Rule took effect in November 2019, and with it came changes to targeted employment area (TEA) designation for EB-5 projects. These changes, in turn, caused the demand for regional center EB5 investments to decrease. USCIS then used this new lack of investor activity as justification to terminate several EB-5 regional centers all across the United States in 2019 and 2020. It is true that regional center terminations were increasing prior to the Modernization Rule going into effect, but the rate of terminations significantly spiked following its enactment. In fact, between November 2019 and October 2020, USCIS terminated a total of 140 EB-5 regional centers and approved none. This resulted in only 646 regional centers in operation as of October 2020, which is 20% less than in FY2019.
Because of these terminations, it is absolutely crucial that foreign nationals planning an EB-5 investment thoroughly research any regional centers they may work with. If the regional center does not have a history of consistent investor activity, it could be in jeopardy. To ensure their EB5 investment has the best possible chance of success, investors should make sure their chosen EB-5 regional center has a good track record and reputation.
I-924 Petition Processing Times Continue to Fluctuate
The big challenge for the EB-5 Regional Center Program is not only the large number of terminations but also the extreme shortage of new regional center approvals. Making this more difficult is the ever-fluctuating estimated processing times for I-924 petitions. In March 2019, the estimated processing time range for I-924 petitions was 16.5–21.5 months. It then began to drastically increase, reaching 62–115.5 months in November 2019, and has continued to fluctuate since the Modernization Rule took effect.
It is almost impossible for EB-5 regional centers to predict the processing time for their I-924 petitions. Throughout FY2020, the estimated processing times have been as low as 14.5 months and as high as 115.5 months, and they have fluctuated inconsistently in both directions. Prospective regional centers can only hope that I-924 processing times and approval rates will improve so that new EB-5 regional centers will be able to begin operations.