Lee Y. Li, IIUSA Director of Policy Research & Data Analytics

The year 2020 has been full of significance, particularly for the EB-5 industry. In addition to the fact that COVID-19 has hugely impacted the economic environment for conducing businesses in EB-5, it is also the first year in which the new EB-5 regulations were fully in effect, imposing the most significant regulatory reform for the EB-5 program since its inception in 1990. Moreover, since March 2020, US Citizenship and Immigration Services (USCIS) adopted a new adjudication process for I-526 cases that is based on visa availability instead of the old “first-in-first-out” approach that the agency has been using for almost 30 years. Furthermore, in July 2020, USCIS published additional policy guidance about redeploying EB-5 capital that impacts many regional centers across the country and tens of thousands of EB-5 investors who are still waiting for their EB-5 visa availability due to retrogression.

In this analysis we take a comprehensive review at the most recent EB-5 statistics and strive to shed some light on the latest EB-5 trends in the era of the new regulations that pose significant changes affecting all EB-5 stakeholders.

I-526 Filings Jumped to a 3-Year High Before the New Regulations Took Effect
As many as 4,285 EB‐5 investors filed their I‐526 petition in the first half of fiscal year (FY) 2020, an increase of 80% from the same time period last year. However, it is important to highlight that 4,264 I‐526 filings occurred in the first quarter of FY2020 (between October 1 and December 31, 2019); while only twenty-one I‐526 petitions were filed in Q2 FY2020 (January 1-March 31, 2020) when the new EB-5 regulations were in effect for a full quarter.

I-526 Adjudication Volumes Continued to Decline with a Lower Approval Rate

USCIS only processed 1,359 I-526 cases in the first half of FY2020, less than half of the I-526 adjudication volume from a year ago, the productivity of processing I-526 continued to decline since FY2018 when USCIS was able to adjudicate nearly 6,660 cases in 6 months. The Immigrant Investor Program Office (IPO) stated that the reduction in I-526 adjudication volume was due to a combination of the “greater coordination” with other governmental agencies, the more robust quality assurance and control programs and the new training for all I-526 adjudicators and economists.

According to USCIS Deputy Director Mark Koumans, IPO adapted a new I-526 process starting in April 2020 that is based on visa availability with the goal of, “Allowing qualified EB-5 petitioners from traditionally underrepresented countries to have their petitions approved in a timelier fashion.” The I-526 statistics in Q3 and Q4 FY2020 will be key to evaluate the I-526 production rate under this new adjudication process. However, the I-526 processing time data as reported on USCIS’s website between May and October 2020 does not look too promising. More on that in the next section.
The average approval rate of I-526 cases also exhibited a continuing decline in a year-over-year comparison. Approximately 81% of the EB-5 investors who received their I-526 adjudication in FY2020 were approved by IPO while this number was 84% in FY2019 and 91% in FY2018. IIUSA members have been reporting an increase of RFEs (requests for evidence) and NOIDs (notices of intent to deny) for I-526 cases since 2018, but those challenges did not materially translate into I-526 denials until FY2020 as indicated by the average I-526 approval rates.

I-526 Processing Time Rose to an All-Time High
Figure 3 demonstrates that the estimated I-526 processing time ranges each month as reported on the USCIS website. Overall, there were two significant increases in I-526 processing time since December 2017: in May 2019, the I-526 processing time jumped from between 22-28.5 months to 29-45.45 months; while in July 2020, the I-526 processing time rose again from 29.5-61 months to 46-74.5 months.

While IIUSA members report some of their investors received their I-526 approval in a shorter time period than the official processing time estimates on the USCIS webpage, IIUSA’s analysis on 9,000+ individual I-526 adjudication cases also found that the median processing time was lower than USCIS official estimates. The continued growth of I-526 processing time on USCIS website is nevertheless a matter of concern.

USCIS started a new I-526 adjudication process in April 2020 that prioritizes EB-5 petitioners from non-backlogged countries (all countries except for mainland China as of October 2020) and began to report two different I-526 processing time ranges in August 2020. As of October 2020, USCIS estimated processing time range is 55-75.5 months for I-526 petitioners from mainland China and 31-58 months for EB-5 petitioners from all other countries. The difference of the processing times between these two tracks remained between 18 and 24 months.

IPO’s I-829 Productivity Increased in FY2020 While I-829 Approval Rate Remained High

In the first half of FY2020, we saw a bounce in IPO’s productivity of processing I-829 cases. The agency adjudicated a total of 1,229 I-829 cases between October 2019 and March 2020, an increase of 62% year-over-year. Moreover, the average approval rate of I-829 cases remained above 95% in 2020.

However, USCIS published a policy memo about redeployment of EB-5 capital in July 2020, which directly affects the adjudication of I-829 cases. The trend of I-829 approval rate in the next few quarters becomes an important indicator for the impact of this new policy guidance.

I-829 Processing Times Became More Unpredictable
The average processing time ranges for I-829 petitions experienced a slight decline in late 2019 but gradually jumped to unprecedented highs from January to October 2020. In 2020, we saw the I-829 processing time range drop to 21-45.5 months in January. It then rose to 35-56 months as of October 2020. With an even wider range between the high and the low estimated processing time of I-829 adjudications, how long it could take to complete an I-829 case became more unpredictable.

Number of Approved Regional Centers Declined Back to the 2014 Levels
A total of 646 approved EB-5 regional centers are listed on USCIS official website as of October 2020, down by 20% from 2019. The number of approved EB-5 Regional Centers across the country continued to decrease since 2018 and experienced the largest net decline in FY2020 since the inception of the EB-5 Program. In particular, since the new regulations took place in November 2019, USCIS terminated 140 regional centers while approving no new ones.

In addition, between November 2019 and October 2020, on average, 12 regional centers were terminated by USICS every month. Analyzing the designation letters of these terminated regional centers, we found that most of them were approved between FY2015 and FY2017. Given the reason that most of the regional centers were terminated because of the lack of EB-5 activity, the data indicates that USCIS would typically terminate a regional center if it remained inactive for 3 to 5 years.

I-924 Processing Times Exhibited High Fluctuations
The average processing times for I-924 applications increased significantly between April and November 2019, from 16.5-21.5 months to an astonishing 62-115.5 months. However, since the new regulations went into effect, the official I-924 processing time estimates have fluctuated greatly. In July 2020, the processing time briefly declined to 14.5-31 months but quickly rose back 23.5-96.5 months. As of October 2020, it takes USCIS anywhere between 56 and 89.5 months to adjudicate an I-924 application (regional center designation or amendment).

Based on the statistics of Form I-526, I-829 and I-924, we examined key EB-5 data trends in the era of the new regulations, including the change of the demands for EB-5, the productivity of USCIS, the approval rates, the processing times, and regional center approvals and terminations. While the data on I-526 and I-829 petitions in the first half of FY2020 presented new dynamics of the EB-5 program under the significant changes introduced by the new regulations, the new I-526 processing approach and the new policy guidance regarding redeployment, the data for the second half of FY2020 will be extremely imperative to shed more light on the outlook of the EB-5 program in the era of the new regulations.