U.S. EB-5 Program

Drop in Form I-526 Filings Could Work to Investor’s Advantage

Published 11:48 AM 21 February 2021
Updated 11:07 AM 29 August 2023

USCIS - recently released quarterly statistics for the fourth quarter(Q4) of fiscal year (FY) 2020 for Form I-526. While filings are slightly up from last quarter, the data shows that per-quarter filings are still extraordinarily lower than recent years. However, this reduction in filings may actually be a positive for an EB-5 program which has been grappling with an enormous backlog of applicants for years.

FORM I-526 DATA

Here are some takeaways from the data released by USCIS:

Total I-526 petitions rose marginally from their FY2019 numbers, up 5% for a total of 4,378 forms filed compared to 4,194 filed in FY2019

Over 97% of I-526 fillings in FY2020 were filed in Q1, between October 1st and December 30th, 2019. With USCIS regulations raising the minimum required investment going into effect in November of 2019, a drop in Q2, FY2020 filings was already anticipated. However, filings for Q2-Q4 FY 2020 dropped to unprecedented lows. While there likely would have been a drop regardless, the dearth of filings in the last three quarters of FY2020 was almost certainly a result of the disruptions caused by COVID-19. In Q2-Q4, FY2020 filings dropped to just a fraction of their Q1 numbers, Q1 saw 4,264 I-526 forms filed, while a mere 114 I-526 petitions were filed in Q2-Q4.

The deluge of petitions in Q1, FY2020 was likely caused by investors hoping to file before USCIS regulations raising the minimum investment requirements went into effect on November 29, 2019. This certainly had an impact on the already near interminable backlog at USCIS, as pending applications sharply increased. In Q4, FY2019 USCIS had 13,763 I-526 applications pending, in Q1, FY2020 that number rose to 17,468. By the end of FY2020 the number of pending applications had fallen to 15,063 but the visa backlog is certainly still a major issue at USCIS.

The dramatic drop in the last 3 quarters of FY2020 can also be attributed to the disruptions caused by the coronavirus, as suspended services at US consulates across the world and disruptions at USCIS likely deterred potential investors.

Adjudications of I-526 petitions were down 27% from their FY2019 totals. This can likely also be attributed to the disruption caused by coronavirus and the resulting lockdowns. However, the data seems to indicate that approvals are trending up, with USCIS approving 79% of I-526 petitions in Q4, FY2020 up from 62% in the previous quarter. USCIS approved 904 I-526 petitions in Q4, FY2020, the most in a single quarter since Q1, FY2019

POSITIVES FOR INVESTORS

With the current decrease in demand now may be a better time than ever to begin investing in the EB-5 program. USCIS has allocated more employment-based visas for FY2021 than ever before, including 18,567 for EB-5 applicants. This nearly doubles the number of visas available compared to previous years, where the EB-5 program could expect to be allocated roughly 10,000 visas. The increase in available visas will also increase the number available to each country will increase from about 700 to nearly 1,300 visas. With I-526 filings down and the number of available EB-5 visas higher than ever before, new investors will be facing less competition for visas, and ideally experience faster processing times.

Additionally, EB-5 investors who have already filed and are awaiting approval for their I-526 forms may also benefit from these trends, particularly investors in China. China’s backlog for EB-5 visas is longer than any other country, but continued low demand would lead to unclaimed visas, which would then go to Chinese investors and reduce the backlog.

Although USCIS may have had a drop in overall productivity in FY, 2020, the agency now has a chance to drastically improve the processing time for the EB-5 program. The decrease in I-526 filings, combined with FY, 2021’s increased allotment of visas essentially gives USCIS a chance to “catch up” with the current backlog of petitions. If USCIS can rise to the challenge they could drastically reduce the EB-5 visa backlog, making the program more appealing to investors everywhere.

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