By: Randolph M. Wright and Simon M. Edelstein
The EB-5 visa program is also known as the Immigrant Investor Program. The program grants lawful permanent residency status to a foreign individual who makes a qualifying investment in a new commercial enterprise.
The EB-5 program requirements, in part are monetary (see below); however, it also requires investors to: 1) make the investment in a new or existing business enterprise; 2) demonstrate that the investment directly or indirectly results in the creation or preservation of at least ten full-time (at least 35 hours per week) jobs for a two-year period.
On November 21, 2019, the U.S. Citizenship and Immigration Services (USCIS) made changes to the monetary investment requirements. Most significantly, these changes increased the required amount of capital invested to quality for an EB-5 visa. Recipients of an EB-5 visa are now required to invest either 1,800,000 USD in urban settings or 900,000 USD in targeted employment areas. These amounts are up from 1,000,000 USD and 500,000 USD, respectively. For more information about investor requirements for the EB-5 program, you can visit the USCIS website.
Due to the COVID-19 pandemic, the USCIS closed its field offices to public contact until June 2020. For many immigration visas, this significantly slowed processing times. Luckily, it seems EB-5 visas have been an exception to these delays. It is likely that the limited need for public contact has allowed the USCIS to continue EB-5 processing through the pandemic. Additionally, unlike other visas and petitions, which are processed at various service centers, all EB-5 visas are processed at a single location, the Immigrant Investor Program Office.
Starting March 31, 2020, the USCIS announced it will not be processing EB-5 visas on a first-in, first out basis. Instead, it will be processing EB-5 visas based on visa availability for the applicant’s country of origin. In other words, if no EB-5 visas are available for an applicant’s country of origin, his or her visa won’t be processed until there are visas available. Depending on an applicant’s country of origin, this case change may increase or decrease EB-5 processing time. Despite all the changes at USCIS and slower than usual processing times for other visas, 2020 has been a relatively good year for EB-5 visas. The USCIS reported an average processing time for EB-5 visas in FY 2020 of approximately 14 months.
RFE and NOID Extensions
Due to the ongoing COVID-19 pandemic, the USCIS is extending the deadline for adverse decision responses and motions to reopen or appeal an adverse decision. This extension applies to Requests for Evidence (RFEs), Notices of Intent to Deny (NOIDs), Notices of Intent to Revoke (NOIRs), Notices of Intent to Terminate EB-5 Regional Investment Centers (NOITs), Appeals or Motions to Reopen Adverse USCIS decision (Form I-290(b)), and Requests for a Hearing on a Decision in Naturalization Proceedings (Form N-336). This extension only applies to those decisions issued between March 1, 2020 and January 1, 2021. Traditionally, interested parties have 30 days to respond to the USCIS. Now, parties will have 60 days beyond the original response deadline to submit responses. For appeals, motions to reopen, and motions for a hearing, a party will now have 60 days from the date of the adverse decision to submit his or her request.
There were significantly less EB-5 visa applications in FY 2020 than years past. In FY 2020, 11,112EB-5 visas were available; as of April 2020, the majority of those visas have not been allocated. A similar trend was seen with other visa categories. As such, the USCIS announced that many unused FY 2020, Family-Based visas will rollover to the Employment-Based visa allotment for FY 2021. The October 2020 Visa Bulletin announced there are approximately 261,500 Employment-Based visas for FY 2021. EB-5 may be fifth priority in terms of visa issuance; however, this uptick in available visas still means a corresponding uptick in available EB-5 visas.
This change in visa availability will mean different things for different applicants depending on his or her country of origin. In the history of the EB-5 program China, Vietnam, and India are the only countries to have experienced backlogs based on the number of applicants. Countries that are currently backlogged (most significantly China) will still experience delays, longer than those of other applicants, but the increase in visa availability for FY 2021 is good news for Chinese investors!
Executive Order No. 13936
Unrelated to COVID-19, but certainly relevant, was President Trump’s Executive Order No. 13936. On July 14, 2020, President Trump issued an Executive Order eliminating differential treatment for Hong Kong under some U.S. law, including in EB-5 visa processing. It reads: “The Special Administrative Region of Hong Kong (Hong Kong) is no longer sufficiently autonomous to justify differential treatment in relation to the People’s Republic of China (PRC or China) under the particular United States laws and provisions thereof set out in this order.” This change will have serious implications for investors from Hong Kong who previously could avoid long processing times for EB-5 visas. Under this Executive Order applicants from Hong Kong and Mainland China now fall under the same category for visa availability and processing purposes. This has the potential to increase the EB-5 processing times for both groups. Hopefully, the increased availability of visas mentioned above will help mitigate this issue.
Other Immigration Related Executive Orders
From the start of the COVID-19 outbreak in the U.S. in March 2020, the President has attempted to curb immigration. These measures are meant to “suspen[d] entry of aliens who present a risk to the U.S. labor market following the coronavirus outbreak.” These restrictions have affected foreign students in the U.S. and applicants to the H1B visa program, among others, because it prohibits the issuance of immigrant visas to individuals located outside of the U.S. However, the EB-5 visa program is excluded from the ban. While we can’t say for sure, given the desire for foreign investments in the U.S., it is not anticipated that the EB-5 visa program will be curbed due to COVID-19.
As a current EB-5 investor or as someone who would like to receive an EB-5 visa through investment, keep in mind that COVID-19 has created unprecedented challenges and changes in markets across the globe. Be sure to communicate with an attorney to assess your investment and immigration plans, so you can be successful and stay in compliance with EB-5 visa requirements.