By Marta Lillo
Immigration attorneys commend the American Immigrant Investor Alliance (AIIA) for releasing important data about EB-5 demand in 2023; however, they caution that the information is insufficient to predict a new backlog for I-526 and I526e petitions later this year.
AIIA has released updated data provided by the United States Citizenship and Immigration Services (USCIS) on distributing I-526 and I-526E applications in the EB-5 program. The data was obtained in response to a Freedom of Information Act (FOIA) request and includes detailed information on the distribution of applications across different countries and Targeted Employment Area (TEA) categories established by the EB-5 Reform and Integrity Act of 2022 (RIA).
According to EB-5 attorneys, the data benefits those involved in the EB-5 program who want to analyze the trends and patterns in application submissions. However, they advise that the information needs to be more conclusive regarding a potential new backlog for I-526 petitions for High Unemployment Areas (HUA) projects, as it only covers applications up to October 2023 and does not include the number of dependents associated with each EB-5 application, which also affects the allocation of visas.
Why AIIA predicts there will be a backlog in EB-5 in 2024?
The data shows a moderate increase in demand for the rural TEA category and high demand for HUA projects, which are expected to surpass the annual availability.
“Compared to the data we have previously received [April 2023), this new batch of data clearly shows a surge in the number of petitions in the rural category. The number of rural I-526E petitions saw a significant jump after July 2023 and is now close to the high unemployment category in terms of monthly applications []. While the ratio of total rural I-526Es compared to total high unemployment I-526Es have been steadily rising from April’s 1:3 to around 1:2 as of today, it should still be noted that the demand and supply of rural and high unemployment categories is still lopsided, considering that the ratio of rural to high unemployment visa supply is 2:1,” the AIIA said in its blog.
The data also shows that EB-5 mainland China’s demand for investment in the U.S. increased until October 2023 but remained steady in other countries, including India. Additionally, there was high demand from the Rest of the World (ROW) investors in the HUA category. Between April 1, 2022, and November 2023, the total number of I-526/I-526E applications filed by China was 1,776, followed by 573 in India and 861 in ROW.
Due to the increased demand for the HUA set-aside categories established since RIA, AIIA predicts a potential backlog of visas for investors from countries other than China and India who are applying under this category. It could lead to a shortage of visas beyond the 7% cap set for investors from China and India. AIIA believes the “pending inventory of I-526 and I-526E petitions represents an ‘invisible backlog’ that is not reflected in the visa bulletin because they have not yet reached the visa stage. This backlog indicates the growing pipeline of people who will eventually apply for visas.”
New EB-5 data is not enough to predict a backlog
“This data is inconclusive as it does not accurately portray November 2023 through March 2024, over four months,” says Bernard Wolfsdorf, managing partner of WR Immigration.
Also, the EB-5 attorney adds that the high demand from China and India EB-5 investors for HUA compared with rural projects could change eventually.
“As for predicting waiting lines, there are too many variables to make accurate predictions, such as denial rates, processing times, and several other criteria,” Wolfdorf affirms.
Carolyn Lee, the founder of Carolyn Lee PLLC, also finds the data inconclusive. “In terms of what the data shows and interpreting it, my sense of it is not as conclusive as to the impacts. For example, a big backlog in the high unemployment area (HUA) set aside later is maybe even probable, but we don’t know for certain because we don’t have the number of dependents associated with each EB-5 petition. If a high number of single investors without dependents are in there, the demand may line up more closely with supply.”
Regarding the psychology behind EB-5 investors opting for HUA over rural areas, Lee says there could be other reasons besides securing a visa.
“One possible explanation is that an early EB-5 investor, from late 2022 to early 2023, could rationally conclude that he or she had a high likelihood of securing a HUA visa just by being early. But now, I would not be surprised, particularly given the data release, to see a trend in favor of rural projects because now there is far less likelihood of securing an HUA visa,” she says.
The surprisingly high demand for HUA also requires a more complex analysis than just comparing this category with rural, the immigration attorney affirms. “If all else were equal, the rational choice, hands down, might be rural. But clearly, all is not equal. Perhaps investors are making this complex calculus and concluding, rationally, that they would rather be in the HUA projects that have been available in the market than rural. Others have made the calculus that is getting a visa first, plus the quality of available projects justifies going into rural. Of course, this could change – with the introduction of the new data, with a different set of projects coming online, etc.”
Le concludes that the State Department (DOS) will categorize the visa demand in 2024 and use the Unreserved numbers in EB-5 in a way that is not yet fully understood. “This also affects visibility regarding what will happen to EB-5 visa allocation,” she says.
Spike in rural EB-5 application and other projections
Lee says AIIA’s publication of this information “will cause the next data set to show a spike or at least a notable upward trend in rural project demand.”
Meanwhile, Wolsdorf cites the analysis by Charlie Oppenheim, former Director of Visa Controls at DOS and current WR Immigration Director of Visa Consulting, which projects that “Rural Reserved Concurrent Filing will most likely remain open for the rest of fiscal year 2024, so this presents a unique opportunity for certain Chinese and Indians to file concurrent adjustments and get 5-year work and travel permits.
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