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The New U.S. Citizenship Act of 2021 May Fix EB-5 Backlogs


For the past three decades, the EB-5 Immigrant Investor Program has provided a pathway for foreign nationals to permanently immigrate to the United States in exchange for making an EB5 investment in a U.S. business. However, extensive backlogs due to the slow processing practices at United States Citizenship and Immigration Services (USCIS) have discouraged many prospective investors. Long processing times have affected the program since 2014, although the COVID-19 pandemic has exacerbated these concerns. While some backlogs have been improved—such as the backlog facing Indian investors, which was cleared in July 2020—backlogs remain for Chinese and Vietnamese investors as of March 2021.

China’s backlog may even continue to grow, following the decision to include Hong Kong investors as part of mainland China’s quota after the passing of the Hong Kong national security law.

USCIS’s slow I-526 petition processing speeds discourage many prospective EB-5 investors from making an EB-5 investment, especially if they are from a backlogged country. However, new legislation may benefit prospective EB-5 investors looking to receive U.S. permanent residency and clear up the problematic backlogs.

What the U.S. Citizenship Act of 2021 May Mean for the EB-5 Investment Program

President Biden has made immigration a priority and is attempting to overhaul the U.S. immigration system, including the EB-5 investment program. There are three key reasons why Biden’s proposal, if passed, would eliminate the EB-5 program’s backlogs.

Exempting Families in the Visa Pools

Many EB-5 investors participate in the EB5 investment program to provide their children with educational opportunities in the United States, such as an increased chance of college admission or the ability to attend U.S. public schools. However, including family members on EB-5 petitions reduces the number of visas available annually for the program, which is approximately 10,000.

One estimate suggests that only 3,000 visas of the roughly 10,000 available annually go to investors, with the remaining roughly 7,000 being taken by family members. Under the U.S. Citizenship Act of 2021, family members would no longer be included in the EB-5 visa pool. While the investor’s family members would still receive U.S. permanent residency, their visas would not count towards the EB-5 program’s annual limit. This would mean that roughly 10,000 investors could receive visas every year, tripling the program’s capacity, in turn decreasing backlogs and providing more capital for U.S. businesses.

Removing Country-Based Caps on Visa Issuance

The EB-5 investment program restricts the number of annual visas for each country to just 7% of the visa total. This approach has many issues, including the way this system ignores population and demand, with the same number of visas reserved for Luxembourg and China. This country-based restriction unfairly discriminates against countries with larger populations and increased demand for the program, shoving many EB-5 investment participants into backlogs. However, if these country-based caps were removed, these backlogs may disappear.

Biden is proposing to remove the country-based caps on visa issuance, which would allow thousands of investors from China and Vietnam to receive their EB-5 visas. The removal of country caps would also reduce the need for investors to redeploy their EB5 investment capital, reducing financial risk.

Reclaiming Previously Unused Visas

The EB5 investment program was created in 1990 but often issued fewer than 500 EB-5 visas annually for much of its early history. The program only gained significant traction in the 2010s, when it began to issue closer to the program’s annual capacity of around 10,000 visas. This means that since the program’s creation, tens of thousands of EB-5 visas have remained unused throughout the program’s history.

If the U.S. Citizenship Act of 2021 passes, the EB-5 program would be able to reclaim the visas it did not distribute in its early history. Combined with the previous initiatives, this move could make the EB-5 investment program’s backlogs a thing of the past. Removing these backlogs would reform the EB-5 investment program, attracting more foreign capital from those seeking U.S. permanent residency.