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United States Citizenship and Immigration Services (USCIS) has published EB-5 program data for Fiscal Year 2024, Quarter 4.  The released data show a high rate of denial for I-526 petitions versus I-526E petitions. 

The denial rate for I-526 petitions was around 30%, which means USCIS issued denials for almost a third of all applicants that invested funds. These applicants waited about 57 months on average for adjudication. Form I-526, also known as Immigration Petition by Alien Entrepreneur, is the petition foreign nationals use in the EB-5 investor program to invest in their own business or in a regional center investment opportunity with the petition filed prior to the EB-5 Reform and Integrity Act of 2022 (RIA)’s passage. When filing this form, applicants take their first step toward obtaining permanent residency in the United States by investing in a new business that creates at least 10 jobs for U.S. workers.

By contrast, the denial rate for I-526E petitions was around 3%. Form I-526E is used by an investor pooling his or her investment with one or more qualified immigrants participating in the EB-5 Regional Center Program with the petition filed after the RIA’s passage. As shown in the data for Fiscal Year 2024, Quarter 4, Form I-526E Petitions receive a significantly higher rate of approval than pre-RIA I-526 Petitions.   

What Factors Are Behind the EB-5 Denial Rates for Form I-526?

USCIS does not provide data on whether the high denial rate for pre-RIA I-526 Petitions is due to project-related issues (impacting all EB-5 investors in a project) or an issue in the investor’s funds source. EB-5 investors must present evidence that the funds invested into the EB-5 project originated from a lawful source. USCIS has been issuing requests for evidence (RFEs) targeting investor’s source of funds and path of funds (i.e. the transfer methods used to send the investment to the United States). Many RFEs for pre-RIA I-526 Petitions ask investors to produce documentation on taxes, banking records, and employment records for several decades, despite the passage of time. These types of requests are generally not sent for post-RIA I-526E Petitions. The immigration bar reports that the issuance rate of RFEs is also lower for post-RIA I-526 Petitions.

On the project side, some projects ran into issues during the pandemic and were unable to secure other financing or dealt with significant delays or the inability to move forward with their projects. Additional projects failed due to fraud, which also would result in I-526 Petition denials. 

The Quarter 4 data from USCIS shows that there is some difference in adjudication by USCIS of pre and post RIA EB-5 investor petitions. Investors with I-526 Petitions filed before 2022 and that are still pending should continue to monitor their case, as USCIS may send an RFE challenging the investor’s source and path of funds. Investors should work with experienced EB-5 immigration counsel to answer any RFE requests due to the increased denial rate.

In this episode of GT’s Immigration Insights series, host Kate Kalmykov is joined by Jill Jones, Head of Specialty Administration/General Counsel US, JTC, to discuss the EB-5 Reform & Integrity Act of 2022; how the post-RIA fund administrator is different from pre-RIA; the value of a fund administrator in EB-5 securities offerings; and the need for construction consultants.

Click here to watch the episode.

In this episode of GT’s Immigration Insights series, host Kate Kalmykov is joined by GT colleague Jennifer Hermansky to discuss USCIS regional center audits, including an introduction of the RIA 2022, site visits, and debarment procedures for bad faith actors.

Click here to watch the episode.

GT Immigration & Compliance Practice Co-Chair Kate Kalmykov spoke during a recent webinar on the EB-5 industry’s future, explaining that changes to the RIA to tighten oversight of regional centers have contributed to rising costs for operators. These comments are referenced in a Nov. 21 Law360 article, “EB-5 Experts Eyeing 4 Suits For Needed Clarity.”

Kate Kalmykov, co-chair of GT’s Global Immigration & Compliance Practice, spoke on the “Securing EB-5’s Future Webinar: How Will Pending Litigation Impact the Industry?” hosted by JTC Nov. 20, 2024. 

Over the past year, regional centers and industry organizations have filed lawsuits in response to several changes to the EB-5 program. Panelists discussed the outcomes of these lawsuits, potential future changes, and other key areas of interest, including the following: 

  • The IIUSA lawsuit over the sustainment period and potential violations of the Administrative Procedure Act, including different perspectives on the pros and cons of the lawsuit.
  • Filing fee increases and how they may affect the ways regional centers and investors approach project selection.
  • What the industry can do to improve EB-5’s reputation as we seek permanent reauthorization of the regional center program.

You are invited to listen to Episode 1 of GT’s Big Law Redefined Podcast’s Immigration Insights series, “Navigating the EB-5 Program: Insights and Updates.”

In the first episode of the Immigration Insights series on Greenberg Traurig’s Big Law Redefined Podcast, attorneys Kate Kalmykov and Jennifer Hermansky discuss the intricacies of the EB-5 Immigrant Investor Visa Program. They cover the program’s history, recent changes under the EB-5 Reform and Integrity Act, and strategies for navigating the reserved visa set aside categories. The episode highlights the importance of lawful source and path of funds, concurrent filing benefits, and the impact of mandamus actions on processing delays. With over 8,000 EB-5 investors represented, Kate and Jennifer address leveraging the EB-5 program to obtain U.S. permanent residency.

GT’s Big Law Redefined Podcast offers timely review of changes in the law that may impact clients across a broad range of sectors worldwide. Hosts and guests will also discuss hot topics covering innovative client strategies; associate recruitment, sponsorship, mentorship, and retention; investment in talent development and legal technology; trailblazing “new normal” work and client space trends; and the importance of culture, vision, and succession planning; among others.

The podcast is available on the Greenberg Traurig website and Apple Podcasts.

As the 2024 federal fiscal year concludes, the U.S. Department of State (DOS) has released its highly anticipated October 2024 visa bulletin, ushering in the start of federal fiscal year 2025 and, with it, new immigrant visa numbers. For intending immigrants with backlogged priority dates, the annual influx of new immigrant visa numbers often offers at least some advancement in government processing or, ideally, the opportunity to become “current” for immigrant visa or green card processing. 

Digging deeper into the fifth preference (EB-5) categories, as anticipated in our July 2024 post, EB-5 immigrant visas remain available worldwide in the set-aside categories created under the EB-5 Reform and Integrity Act (RIA) of 2022. To recap briefly, of the 10,000 EB-5 visas available for issuance annually, the RIA created the following visa “set asides:”

  • 20% are reserved for qualified immigrants who invest in a rural area;
  • 10% are reserved for qualified immigrants who invest in a “targeted employment area” (TEA), which meets the requirements that apply to areas of high unemployment (unemployment rate of at least 150% of the U.S. national average); and
  • 2% are reserved for qualified immigrants who invest in infrastructure projects.

Immigrant visas based on approved I-526E Petitions that meet the requirements for the above set-aside categories remain “current” for processing, regardless of the applicant’s country of birth. This also means that EB-5 applicants in the U.S. with a pending or approved I-526E Petition based on an investment in the set-aside categories may concurrently file for adjustment of status (AOS) and related work and travel permits (“EAD/AP”). Likewise, for set-aside EB-5 applicants awaiting processing abroad, continued availability of immigrant visas keeps the path to visa issuance clear. Accordingly, applicants can obtain their visas after satisfying the National Visa Center’s documentary and eligibility requirements and completing the immigrant visa interview.

For EB-5 applicants qualifying based on pre-RIA or “unreserved” immigrant visa petitions (i.e. not eligible for the above set-aside categories), the visa bulletin similarly remains current for applicants born in most countries. The persistent exception is for applicants born in mainland China or India and applying based on an EB-5 investment in the unreserved category (as noted above, set-aside investments remain current worldwide, including for applicants born in China or India). Applicants born in mainland China or India remain backlogged due to demand outpacing the available supply. The visa bulletin displayed considerable progression in these categories under Chart A, or dates “for final action” (i.e. eligible for immigrant visa issuance by DOS once all requirements met):

  • EB-5 China, Unreserved: advances 7 months, to 15 July 2016
  • EB-5 India, Unreserved: advances 13 months, to 1 January 2022

The advancements reported under Chart A, however, are somewhat tempered by Chart B.  Specifically, Chart B reports stagnation or retrogression in connection with the government’s dates “for filing” for applicants born in mainland China or India. Briefly, the dates for filing chart reflects priority dates eligible for filing of Form I-485 in the United States, depending on government determination as to whether to utilize this chart, which is announced monthly, shortly after visa bulletin release. The specific updates in these categories under Chart B include:

  • EB-5 China, Unreserved: retrogresses 3 months, to 1 October 2016
  • EB-5 India, Unreserved: no movement, remains at 1 April 2022

Because the USCIS will rely on Chart B in October 2024, the lack of advancement in the EB-5 categories above means that many applicants may still be unable to progress to the next step of their green card process, including filing Form I-485, despite the promise of a new federal fiscal year. That said, applicants should keep in mind that transitioning into a new fiscal year often requires DOS to adjust available immigrant visas based on over-subscription that may have occurred at the end of the preceding year, when most immigrant visa numbers exhaust availability worldwide.  

Key takeaways for EB-5 investors from the October 2024 visa bulletin:

  • As was the case in our July update, a record number of EB-5 visas are available to applicants in both the high unemployment and rural area set-aside categories at the outset of FY 2025, regardless of country of birth.
  • Applicants eligible under the RIA set-aside categories may, regardless of country of birth, continue to concurrently file I-526E petitions and AOS applications in October 2024.

For unreserved EB-5 investors born in mainland China or India, while the October 2024 visa bulletin displays stagnation or retrogression in Chart B, the advancements in Chart A offer some hints of future progression. Importantly, unreserved EB-5 immigrant visa processing can continue at consulates worldwide beginning October 1, 2024.

Under the EB-5 Reform and Integrity Act of 2022 (RIA), designated EB-5 regional centers must make an annual payment into the EB-5 Integrity Fund. The annual fee is $20,000 for each regional center, except for those with 20 or fewer total investors in the preceding fiscal year (Oct. 1–Sept. 30) in its new commercial enterprises, in which case the annual fee is $10,000. The Department of Homeland Security then uses the fees in the Integrity Fund to conduct audits on regional centers, site visits on EB-5 projects, and overseas investigations relating to EB-5 stakeholders and applicants abroad. 

U.S. Citizenship and Immigration Services (USCIS) published the first “Notice of EB-5 Regional Center Integrity Fund Fee” in the Federal Register March 2, 2023, for the FY 2023 Integrity Fund fee. USCIS later extended the payment window for payment of both the FY 2023 and 2024 Integrity Fund fees to Oct. 1–Oct. 31, 2023. USCIS also stated on its Integrity Fund website that the final deadline for paying both the FY 2023 and FY 2024 Integrity Fees was Dec. 30, 2023, or 90 days after the due date. USCIS warned that it would reject Integrity Fund fee payments for FY 2023 and FY 2024 received after that date, including those made in response to a Notice of Intent to Terminate.

In June and July 2024, USCIS commenced sending Notices of Intent to Terminate to designated regional centers that failed to pay the FY 2023 and FY 2024 Integrity Fund fees by Dec. 30, 2023. Litigation ensued against Department of Homeland Security because many regional centers either did not understand or did not know that both FY 2023 and FY 2024 fees were due by Dec. 30, 2023, or were misadvised that both fees were due. As of the date of this blog, it is not clear if USCIS will change its position on whether it was required to terminate regional centers that failed to pay the Integrity Fund fees for FY 2023 and FY 2024 by Dec. 30, 2023, or whether USCIS should have first imposed a reasonable penalty and notified regional centers that failed to pay, and/or whether USCIS should have used its discretion to extend due dates again following the imposition of reasonable penalties allowed by the RIA.

Importantly, each year the Integrity Fund fees are due for the upcoming fiscal year, not the past fiscal year. Starting Oct. 1, 2024, and continuing through the month of October, USCIS will collect the FY 2025 Integrity Fund fee. As outlined in the RIA, USCIS will terminate the designation of any regional center that does not pay the required fee within 90 days after the annual fee’s due date. The annual fee is payable online. Regional centers should prepare to pay the FY 2025 Integrity Fund fee once the Pay.gov portal becomes available on Oct. 1, 2024. Multiple reports leading up to the Dec. 30, 2023, deadline indicated that USCIS incorrectly processed some regional center payments. To avoid any technical issues with payment, penalties, and/or termination, regional centers should pay early and keep a clear record of the payment in case USCIS requests evidence of the payment later. Moreover, regional centers should make sure the payment is processed with their credit card company or through their bank account to avoid any issues after the payment portal closes.

Penalties for failure to pay the Integrity Fund fee include late fees and/or termination. Termination of the regional center could be damaging if the regional center has post-RIA investors. Under the RIA, investors filing Form I-526E based on investment in a new commercial enterprise must continue to be sponsored by an approved regional center. If the regional center is terminated, the new commercial enterprise must associate with a new regional center in good standing, although the RIA clarifies that the regional center need not be in the same geographic location as the original regional center. Based on the Instructions to Form I-526E, it is likely USCIS will require EB-5 investors to file an amendment to their pending or approved I-526E petition to notify USCIS of the new regional center sponsorship. This may delay the issuance of conditional green cards and result in additional fees for investors. Thus, regional centers should consider paying early and taking adequate steps to make sure their payments are timely processed by the government.

GT’s Immigration and EB-5 attorneys are on the move. We look forward to seeing clients and partners in our travels.

Please click here to find a time to connect with our team.

• Orlando | 9/12-9/14 | Kate Kalmykov & Nataliya Rymer

• Mexico City | 9/15-9/20 | Kate Kalmykov & Nataliya Rymer

• Chicago | 9/22-9/25 | Kate Kalmykov & Nataliya Rymer

• Beijing | 10/18-10/19 | Luna Ma

• Qingdao | 10/19-10/20 | Luna Ma

• Shenzhen  | 10/25-10/26 | Luna Ma

• Shanghai | Permanent Presence | Luna Ma

• Tel Aviv | 10/26-11/1 | Kate Kalmykov & Nataliya Rymer

• Dubai | 11/2-11/8 | Kate Kalmykov & Nataliya Rymer

• Ho Chi Minh City | 11/9-11/15 | Kate Kalmykov

• Taipei | 11/16-11/17| Kate Kalmykov

The U.S. State Department and U.S. Citizenship and Immigration Services announced that they have issued all legally available visas in the unreserved EB-5 Immigrant Investor Program categories for Fiscal Year 2024. Embassies and consulates have been directed to not issue immigrant visas in these categories until the new fiscal year (FY 2025) starts on Oct. 1, 2024. 

As discussed in our recent blog post on EB-5 filing strategies, a total of approximately 140,000 immigrant visas are available every fiscal year for employment-based immigrant visas, including the EB-1, EB-2, EB-3, EB-4, and EB-5 categories. Of the 140,000 immigrant visas available annually, the government allocates approximately 10,000 to the EB-5 investor visa program. The visas are also subject to per-country visa quotas. The Immigration and Nationality Act sets the annual limit for EB-5 visas at 7.1% of the worldwide employment limit, of which 68% is available for unreserved visa categories (C5, T5, I5, R5, RU, NU). Additionally, the EB-5 Reform and Integrity Act of 2022 makes unused EB-5 reserved visas from FY 2022 available in the EB-5 unreserved categories for FY 2024.