A recent update from the U.S. Citizenship and Immigration Services (USCIS) marks a significant shift in the EB-5 immigration landscape.
As of May 22, all foreigners seeking adjustment of status (AOS) will be required to use consular processing outside the U.S., with exceptions only in extraordinary circumstances.
This policy targets nonimmigrants, including those holding U.S. visas who are applying for the EB-5 visa, stressing that their temporary status should not be seen as a direct route to permanent residency. Instead, these individuals will need to return to their home countries to apply for a green card. The adjustment aims to simplify the immigration process and mitigate the risk of individuals remaining in the U.S. illegally after their residency applications are denied.
“Yes, USCIS dropped a bomb on us on Friday before the long weekend!” said Yuliya Veremiyenko-Campos, Esq. of YVC Legal.
Marcela Gallic of Fragomen notes that USCIS has always considered AOS a discretionary process that takes the overall situation into account. “What appears new is the agency’s tone and apparent effort to emphasize that adjustment in the U.S. should not automatically replace consular processing abroad.”
The recent change has important implications for new and ongoing EB-5 applicants. Those who are currently undergoing or are about to begin the AOS process may face a more complex and lengthy immigration journey. This process is the second phase of the EB-5 application for petitioners already in the U.S. on a different visa status.
Ishaan Khanna, president of the American Immigrant Investor Alliance (AIIA), stated that the memo redefines AOS as an “extraordinary” act of administrative grace rather than a standard, routine pathway to a green card.
“Sends a chilling signal to thousands of law‑abiding EB‑5 investors already living, studying, and working in the United States,” Khanna said. “We are deeply concerned that, rather than protecting the integrity of the program, this approach will punish compliant investors who followed the rules and undermine the very economic development Congress intended the EB‑5 program to support.”
Charles Kuck of Kuck Baxter cautioned that the memo is new and has not been vetted by the Office of the Chief Counsel at USCIS or by the Department of Homeland Security’s lawyers. “It contravenes the plain language of the statute on adjustment status. It is contrary to 74 years of statutory statute-making by the US Congress. A lawsuit will be filed next week, shortly seeking a Temporary Restraining Order (TRO), and I see no circumstance under which a TRO is not granted.”
The American Immigration Lawyers Association (AILA) said in a public statement that the USCIS memo forces legally admitted immigrants seeking permanent residency to leave the U.S. to get their green cards, despite Congress establishing adjustment of status to allow eligible individuals to stay with their families and jobs. “Reversing settled law by memo is legally questionable and needlessly chaotic.”
After the memo was made public, USCIS spokesperson Zach Kahler told Business Insider that not all AOS applicants who meet certain criteria can continue their processes in the U.S., while others may need to apply from abroad.
EB-5 applicants already in the U.S. to face increased scrutiny
Belma Demirovic Chinchoy, from the Immigration General Counsel, informed clients via email that there is not enough information to assess how this update could affect EB-5 petitioners who have filed or will file for AOS under the EB-5 RIA provisions.
“Importantly, USCIS cannot eliminate adjustment of status by policy memo because INA § 245 remains statutory law,” Demirovic Chinchoy said. “In particular, if USCIS attempts to impose undefined ‘extraordinary circumstances’ requirements through policy guidance rather than formal rulemaking, such actions may be challenged as arbitrary, capricious, or contrary to law.”
She cautioned that USCIS has not defined what constitutes “extraordinary” under the newly announced approach.
However, attorneys consulted by EB5Investors.com said the memorandum is expected to result in heightened scrutiny of various immigration cases, including those related to EB-5 concurrent filings, family-based adjustments, employment-based adjustments, transitions from B-1/B-2 to permanent residency, and cases involving prior status violations or unauthorized employment.
“The new policy taking effect immediately will definitely affect the I-485 applicants; at least it will delay the adjudication,” Tony Wong of Wong & Associates said. “The I-765 and I-131 applications are affected for sure.
Wong also questions whether USCIS will revoke already-issued Employment Authorization Documents (EADs) and Advance Parole (AP), or stop accepting new applications altogether.
“I also think this policy has a greater impact on those with B1/2 visas because they may have lost their non-immigration status. Let’s see if there is any lawsuit against this policy,” the EB-5 attorney added.
According to an analysis of USCIS data by AIIA, approximately four in ten EB-5 investors choose adjustment of status over consular processing to complete their green card journey. That statistic takes on new urgency in the current policy environment: if discretionary denials become routine, AILA warned that a significant share of otherwise qualified foreign investment flowing into U.S. businesses and American jobs could be stopped in its tracks before it ever reaches the finish line.
“If officers start routinely denying these applications on discretionary grounds, it could effectively choke off or delay up to 40% of otherwise viable foreign investment into U.S. businesses and American jobs,” Khanna said.
The EB-5 lawyers agree that EB-5 concurrent filing and adjustment of status should remain legally available after this policy update. However, there’s concern about how the change could affect EB-5 applicants currently residing in the U.S., and whether they may need to return to their home countries for consular processing of their green card applications.
“For EB-5 investors already in the U.S. — particularly F-1 students pursuing concurrent filing — this likely means increased scrutiny rather than automatic denials”, Gallic said. “Many properly maintained cases still present strong equities, including lawful status history, U.S. education, substantial investment, job creation, and reliance on the concurrent filing framework established by the EB-5 Reform and Integrity Act.”
Before this update, EB-5 applicants could adjust their status without leaving the U.S. The introduction of “extraordinary circumstances” criteria changes the landscape for them.
“The biggest concern is uncertainty for investors already waiting in long adjudication queues,” Gallic said. “Many applicants structured their strategy around remaining in the U.S. through pending adjustment applications while waiting for visa availability.”
“At this stage, it remains unclear how broadly field offices will apply the guidance in practice,” the attorney added. “The Policy Manual still requires a case-by-case balancing analysis rather than categorical denials.”
Wong adds, “If the new policy is eventually implemented, the backlog is likely to be relaxed in the short term, but in the long term, it may increase pressure on the backlog because the I-485 applicants will join the queue of NVC procedures.”
The lawyers also expect the EB-5 legal advisors to prioritize documenting positive factors early on. This includes lawful status, tax payments, family and community ties, work history, health insurance, and good faith in following immigration laws.
“Applicants should expect USCIS to place greater emphasis on discretionary factors and overall immigration history,” said Rana Jazayerli, Esq. of Jazayerli Law LLC.
“For EB-5 investors, strong, favorable equities may include substantial capital investment, job creation, lawful maintenance of status, tax compliance, business activity, family ties, and broader economic contributions to the USCIS,” Veremiyenko-Campos said. “Congress specifically created the EB-5 category to encourage foreign investment and economic development, which should be considered as favorable.”
EB-5 attorneys navigating concerns surrounding ongoing I-485 applications
Some lawyers say clients want to know whether their pending I-485 applications are safe. They also want guidance on whether to keep their current U.S. visa status and if concurrent filing strategies are still a good option.
“Most of my EB-5 clients are doing or were planning to do AOS, so everyone is very concerned about this memo and the related USCIS public statements suggesting that AOS should be limited to ‘extraordinary’ situations,” Veremiyenko-Campos said.
Wong said the announcement is definitely affecting his practice immediately. “Some of my clients ask us to speed up I-485 applications, and some ask to hold on to the underlying petitions. The inquiries also include whether they need to go back to their countries immediately. Some concerns whether they can come back with AP because they are now in a foreign country.”
“Assuming that USCIS implements the new guidance, clients need to pay attention to maintenance of lawful status,” Demirovic Chinchoy cautioned. “Discretionary equities; travel planning; documentary consistency; and the possibility of processing IVs at a Consulate.”
Gallic concluded. “For now, many practitioners are advising clients not to panic, continue maintaining status where possible, and be prepared to document favorable equities supporting adjustment.”
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