EB-5 over the last 10 years: growth, drama, & challenges

  • Posted on February 19, 2020 | Updated on February 21, 2020 | 5 min read

EB-5 business plan writer Suzanne Lazicki has compiled a thorough review that details the program’s changes over the past 10 years. 2010 was the “wild west” and had just 104 approved regional centers, about 2000 I-526’s filed, and fewer than 2000 visas issued. Much has changed since then with a surge in popularity that peaked in 2015, followed by a decline in activity, and an increase in political scrutiny and processing times.

EB-5 expert and business plan writer Suzanne Lazicki not only works in the program but follows it with a trained eye that seems to never blink. She details the program’s activity, changes, and political drama over the past decade, and it bears a review to see just how much is different today compared with 2010 for the USA immigrant investor program. Here are just some of her notable highlights.

 EB-5 in 2010

  • just 104 approved EB5 regional centers
  • roughly 2000 I-526’s filed and fewer than 2000 EB-5 Green Cards handed out
  • China had the lion’s share of filings with 66%
  • USCIS declared a processing target of five months for both I-526’s and I-829’s
  • the program was running on a three-year authorization through till 2012
  • “Wild west” was a common term to describe the industry and Lazicki alludes to “rapidly growing and not-yet-quite-civilized EB-5 frontiers”

EB-5 in 2011

  • USCIS made the program a priority and hired more staff including economists, analysts and economic development specialists
  • 211 approved regional centers
  • 3,805 I-526’s filed with a 130% increase from China (a partial shutdown and then a major investment-amount increase in Canada’s immigration by investment program was a significant factor)
  • it was unclear whether a census tract group qualified for Targeted Employment Area (TEA) designation
  • there was little official policy guidance
  • this was the first year regional centers filed I-924 annual reports

EB-5 in 2012

  • regional centers received another three-year authorization (the last one of this length)
  • USCIS created the Investor Program Office (IPO) to properly manage the program under a “single leadership structure”
  • tenant occupancy was a major question mark (counting jobs associated from tenants in buildings built by EB-5); by the end of the year, USCIS declared they did not qualified as created jobs
  • I-526 green card by investment filings surged to 6,041 (87% from China)
  • a rise in hotel developments as retail projects declined due to the USCIS policy of not counting jobs from tenancy

EB-5 in 2013

  • the IPO office was now open and processing I-924 applications
  • USCIS continued to push for more resources and openness with processing
  • I-526 processing was officially published as taking one year
  • President Obama declared immigration goals that included making EB-5 a permanent program
  • the Adjudication Policy Memo, the first comprehensive EB-5 policy guidance, was published and took effect
  • the Memo decided the census tract question: USCIS would follow state determinations for TEA designation
  • the first significant SEC enforcement in EB-5 transpired, for the Chicago Convention Center project
  • an audit determined that USCIS needed more authority for regional center termination and to work with the SEC (until this report, only five regional centers had been terminated, and only one SEC action occurred related to the program)
  • 424 approved regional centers
  • I-526 filings were about the same as the previous year
  • many EB-5 green card investors started receiving I-829 approvals for the first time

EB-5 in 2014

  • IPO started to adjudicate I-526 and I-829 petitions
  • USCIS reached out to the industry for input for new regulations; this turned into the proposed rule that was published that year (and implemented in 2019)
  • over 50 regional centers were issued Notices of Intent to Terminate
  • SEC activity started to increase with more complaints about EB-5 projects
  • IPO was given a 15-person Fraud Detection team
  • 1-526’s had an average processing time of 13 months; I-829 average was now 9 months
  • I-526 filings doubled to 10,950 (88% were Chinese)

EB-5 in 2015

  • this year was the high point for EB-5 interest: 14,373 I-526’s were filed (85% from China)
  • the spike in activity was partly driven by the expiry of the regional center authorization that happened in 2012
  • another driver in activity was large-scale projects — which also spurred political debate about TEA designation and abuse
  • the expiry also incited a flood of legislative activity with five bills that advocated increasing the EB5 investment amounts (usually to $800,000 or $1.2 million for a TEA investment) and more rigid TEA regulations
  • Congress didn’t implement proposed changes but did authorize a one-year extension
  • for the first time, redeployment was officially brought up by USCIS in a draft memo that was never completed
  • apartments and assisted living facilities became more popular for investment green card projects

EB-5 in 2016

  • after the EB5 news of the record year of 2015, interest waned slightly: 14,147 I-526’s were filed (77% from China, 3% from Vietnam, and 3% from India)
  • more EB-5 bills were tabled in Congress with much political debate with a rising negative sentiment over TEA gerrymandering
  • I-526’s were being denied for source of funds reasons (loan proceeds not being valid), impermissible redemption agreements (call options), and regional center termination being defined as a material change
  • these denials were not based on the published policy which led to lawsuits — some that were successful
  • multi-state regional centers began to be widespread

EB-5 in 2017

  • Department of Homeland Security (DHS) published a Notice of Proposed Rulemaking for the EB-5 Modernization Regulation
  • Trump became president but failed to give favor to EB-5 immigration — a hope of some
  • USCIS published official policy on redeployment
  • new I-526 and I-924 applications introduced new requirements
  • I-526 RFE’s included unannounced new policy relating to currency exchanges
  • the Chinese visa wait was determined to be over 10 years
  • I-526 filings decreased by 13%, marking a trend
  • IPO had improved processing volumes but processing times actually increased (19 months for I-526’s and 28 months for I-829’s)

EB-5 in 2018

  • the regional center program was looking at six expirations and had a brief lapse twice
  • Department of State declared significant wait times for China (14-15 years), Vietnam (6-7 years), and India (5-6 years)
  • longer wait times, program uncertainty, and redeployment issues caused EB-5 interest to plummet — 50% fewer I-526 filings than the year previous, and 70% fewer than in 2015

EB-5 in 2019

  • the Modernization Regulation was finally published and implemented — raising the TEA investment amount to $900,000 and the standard investment amount to $1.8 million, and making significant restrictions on TEA designation
  • India went into retrogression
  • later in the year, Department of State published lower estimates of a backlog than their earlier estimates
  • IPO experienced significant decreases in processing volume, and significant increases to the processing time as well as denial rates and RFE’s delivered
  • new training, new staff, new policy interpretation, and political pressure on immigration were all viewed as possible reasons for the IPO slowdown
  • for the first time, a year saw more regional centers terminated than approved; 794 total approved regional centers and 394 total on the terminated list
  • four sunset dates of USA Green Card loomed throughout the year
  • the year ended with the longest reauthorization since 2015 — nine months
  • despite some predictions, the new regulations were not blocked by legislation

Read Suzanne Lazicki’s comprehensive look at the last 10 years in EB-5

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