Periodically, United States Citizenship and Immigration Services (USCIS) publishes processing data for each quarter of the fiscal year. The recently published data for FY2020 Q4 revealed a decrease in new I-526 petition filings for July through September of 2020. In fact, I-526 submissions are the lowest they have been in many years. This may sound like bad news for the EB-5 Immigrant Investor Program, but this is actually great news for any foreign nationals planning to make an EB-5 investment.
Most issues that keep the EB-5 program from functioning efficiently stem from the massive backlogs that some countries are subject to. Because demand in countries like China is so much higher than the number of available EB-5 visas, EB-5 investors from those countries can be stuck waiting years for their EB-5 visa. But now that demand is down, there is an opportunity to reduce the EB-5 backlogs.
Breaking Down the I-526 Petition Data
In FY2020, there were 4,378 new I-526 petitions filed. This is lower than every year in the 2010s, except for 2019. In 2019 there were only 4,194 new petitions filed, showing a 5% increase from 2019 to 2020. This is likely due to the Modernization Rule that took effect on November 21, 2019. This rule increased the minimum investment amount required for the EB-5 program, raising it from $1 million or $500,000 in a targeted employment area (TEA) to $1.8 million or $900,000 in a TEA. USCIS’s data shows that 97% of the I-526 petitions filed in FY2020 were filed in the first quarter, which clearly indicates that the increase in I-526 filings for FY2020 was caused by a large number of investors rushing to make their EB-5 investment before the Modernization Rule took effect.
Throughout the last three quarters of FY2020, 114 I-526 petitions were filed. This unusually low number is most likely due to the COVID-19 pandemic that began in early 2020 and swept across the globe wrecking lives and economies. Countries all over the world issued strict lockdowns, U.S. embassies and consulates were closed, and harsh travel restrictions were in place. All of this resulted in record low U.S. immigration numbers throughout 2020.
Aside from new I-526 filings being low, I-526 petition processing was also down on USCIS’s end. Ever since Sarah Kendall took over as chief of the Immigrant Investor Program Office (IPO), I-526 adjudications have slowed down tremendously. FY2019 data reveals a significant drop in adjudications from the high adjudication numbers of FY2018, and the figures continued to drop even more in FY2020. However, in Q4 of FY2020, I-526 petitions began to rise again, as did the ratio of approvals. Data from FY2020 Q3 showed a 62% approval rate, which increased to 79% in Q4. This upward trend is good news for any investors awaiting their I-526 approval.
Unfortunately, the uptick in I-526 receipts in the first quarter of FY2020 only added to the massive backlogs. There were 13,763 backlogged EB-5 petitions at the end of FY2019, and by the end of FY2020 Q1 that number had increased to 17,468. Luckily, the last three quarters of FY2020 saw hardly any new petitions filed, which allowed USCIS to tackle some of the backlog and reduce the number to 15,053. With EB-5 demand still being fairly low, there is a chance for the backlog to be reduced even more.
The Way Forward for EB-5 Investors
Another major factor that could help reduce the EB-5 backlogs is the additional visas being allocated to the EB-5 program for FY2021. Normally, 10,000 visas are available for EB-5 applicants each fiscal year; however, due to the large number of unused visas in FY2020, 18,567 visas are available for the EB-5 program in FY2021. This means that a large number of the leftover visas can be used to reduce the backlogs in China and Vietnam.
While this is great news for anyone already in the system who has been subject to extremely long wait times, this is also incredibly positive for any foreign nationals planning an EB-5 investment. Any prospective EB-5 investors from China or Vietnam could experience much shorter wait times than anticipated if the EB-5 backlogs can be reduced.
If USCIS can act quickly and efficiently, FY2021 could be the perfect time to reduce the massive EB-5 backlogs in China and Vietnam. As the world recovers from the COVID-19 pandemic and things slowly begin to return to normal, it is likely that EB-5 demand will begin to rise again. Therefore, if USCIS does not use this time wisely, there will likely not be another opportune time to tackle these ridiculous backlogs. Not only could reducing the backlogs benefit the popularity of the EB-5 program, but it would help thousands of EB-5 investors finally achieve their dreams of a future in the United States.