The EB-5 Immigrant Investor Program provides a route to permanent residency in the United States for foreign nationals who have made a qualifying investment in a U.S. business. Introduced by Congress in 1990 to strengthen the U.S. economy, the EB-5 investment program is popular with investors from around the world, particularly China, Vietnam, and India.
Although the EB-5 program aims to expand the American job market and create a flow of foreign capital investments, there are challenges in its implementation. For example, the Department of Homeland Security (DHS) and United States Citizenship and Immigration Services (USCIS) impose a limit on the yearly number of EB-5 visas that many feel is restrictive. Furthermore, the process through which a foreign national and their immediate family acquire their EB5 investment visas can be prolonged by processing inefficiencies.
In this article, we review the challenges present in the EB-5 investment industry and how they may be addressed through reform.
Congress’s Indecisiveness Regarding the Regional Center Program
In June 2021, there was a significant change in the EB-5 industry. The suspension of the EB-5 Regional Center Program meant that direct EB5 investment became the sole option for interested foreign nationals
Moreover, investors who had filed their I-526 petitions through the regional center program are uncertain as to the future of their EB-5 visas. USCIS has announced that it is not processing pending I-526 petitions related to regional centers. While it was assumed that Congress would move quickly to reauthorize the regional center program, as of February 2022, it is unclear when reauthorization will occur.
If the regional centers are not reauthorized, USCIS must provide for the foreign nationals who made an EB-5 investment in good faith and are now unable to move forward in the EB-5 visa process. This may take the form of “grandfathering in” these applicants. If action is not taken soon, these regional center investors may end up filing lawsuits against the program. Since the EB-5 investment program is highly sought after by foreign nationals, further delays will also have a negative impact on the program’s reputation.
Slow Visa Petition Processing
USCIS processing times for EB-5 visa petitions are very slow, and some investors have even pursued litigation. These prolonged wait periods have also been acknowledged by officials from USCIS. In fact, USCIS has said that it will aim to shorten the processing periods, which may encourage more prospective investors to join the program.
Backlogs of Applications from China and Vietnam
Applications coming in from countries that have a high number of EB-5 investors are burdened with longer processing times. The notoriously inefficient USCIS adjudication process has meant that these backlogs have increased. As a result, investors from certain countries have been subject to cutoff dates, which dictate when they can apply for and receive their visas after Form I-526 is approved.
However, in the December 2021 Visa Bulletin, the backlog for Chinese direct investors was cleared, freeing them from cutoff dates for the first time in several years. Restrictions may be applied once more if the regional center program is reauthorized, thus accounting for the expected influx of regional center investors.
As the EB5 investment industry waits for further developments in these areas, it is clear that any changes will serve to improve the program’s popularity. The economic boost from EB-5 investment capital has helped thousands of U.S. businesses in recent years and no doubt will continue to do so.