An Immigration Attorney’s Perspective: Why EB-5 Investors Cannot Just Buy a Green Card

by David Hirson and Winnie Ng

Many people, including some legislators, have viewed EB-5 as a “cakewalk” with little scrutiny where wealthy investors simply queue up for a fast-track green card.  Although this is far from true, their viewpoint is understandable if they have not experienced the process first-hand.  This is the reason new investors often ask us the following questions. 

 I.               Is EB-5 the Fastest Way to Get a Green Card?

 a.     Stage One: Form I-526, Petition by Alien Entrepreneur

Compared to other Employment-Based Immigrant Visa categories, EB-5 currently has the longest processing time.  While current average processing time for all other EB (employment-based) categories’ initial petition is between four to 10 months, EB-5’s initial petition (I-526) has a current average processing time of over 14 months.  In reality, many petitions take over 24 months to adjudicate.

Due to this long adjudication delay, many investors have resorted to filing writ of mandamus actions in court in an attempt to force adjudication.  While this is often the only way for these investors to ensure a response from USCIS, this process is costly and time consuming.

 b.     Stage Two: Consular Processing (CP)/Adjustment of Status (AOS)

Unlike other EB visa categories where approved petitioners can directly apply for permanent residency in the United States, EB-5 petitioners with approved petitions can only apply for a two-year conditional permanent residency in the United States.  Before the expiration of their conditional permanent residency, they must apply for removal of condition.

Consular Processing

Investors and derivative family members residing abroad need to file DS-230 or DS-260 with the National Visa Center (NVC) in order to obtain EB-5 visas for admission to the United States.  After the applications are reviewed by the NVC, they are sent to the U.S. Consulate where the applicants reside to process and schedule an interview.  For Chinese investors, their cases are sent to the U.S. Consulate in Guangzhou.  Oftentimes, cases are lost between NVC and the Consulate.  Some cases take over a year before investors receive an appointment at the Guangzhou Consulate.

Due to the current retrogression for Mainland China, investors with approved petitions must review the visa bulletin to determine if their priority date is current before they can file their DS-230 or DS-260 with the NVC. 

Beginning October 2015, the visa bulletin that determines availability of immigrant numbers divided the priority dates for EB visas into two bulletins.  Bulletin A publishes “Application Final Action Dates for Employment-Based Preference Cases,” which determines when applicants can obtain visas for admission into the United States.  Bulletin B publishes the “Dates for Filing of Employment-Based Visa Applications,” which determines when applicants can file their visa applications with the NVC for consular processing.

For Mainland China investors, which make up 85 percent of all EB-5 investors, the Final Action Date has been approximately two years after the investors’ date of initial I-526 filing.  As such, even if they were fortunate to receive an I-526 approval in less than 14 months, they must wait for approximately two years before they can obtain EB-5 visas for admission into the United States. 

Other visa categories such as EB-1 do not have retrogression for any countries.  As such, EB-5 is clearly not the fastest way to obtain a green card.  In fact, up to this point, investors would only receive conditional permanent resident status upon admission to the United States.  For other employment-based visa categories, applicants would receive full green card status upon admission.

Adjustment of Status

Investors and derivative family members holding valid non-immigrant status in the United States can submit Form I-485 to apply for adjustment of status to conditional permanent resident status within the United States. 

Adjustment of status is usually a much faster process than consular processing for all visa categories.  However, since October 2015, applicants need to check the USCIS website to determine whether their eligibility to apply for adjustment of status is based on the Final Action Date (Visa Bulletin A) or Filing Date (Visa Bulletin B).  With retrogression for Mainland China, EB-5 investors and derivative family members are again subject to the uncertainty of when they can submit their I-485 applications to adjust status.

c.     Stage Three: Form I-829, Petition by Entrepreneur to Remove Conditions

Upon entry into the United States with an EB-5 immigrant visa or upon approval of the I-485 application, the EB-5 investor and derivative family members will be granted conditional permanent residence for two years.  Within 90 days before the expiration of their conditional permanent resident status, the investors must file for removal of conditions (I-829) by proving that their investment has created at least 10 qualified jobs for U.S. workers.

Current published average processing time for I-829 adjudication is approximately 15 months.  However, like the processing time for I-526, actual I-829 processing time may take much longer than the published time. One group of cases has been pending for over 10 years with no resolution in sight.

d.     Short Answer:

A brief overview of the three main stages of the EB-5 process can reveal that EB-5 is not a “shorter-cut” to a green card than any other EB visa category.  In fact, EB-5 investors experience longer delays in processing times and an extra stage (I-829) before they can obtain permanent residency or full green card.

II.             Is it Easy to Get an EB-5 Green Card?  What Level of Scrutiny Is Involved at Each Stage? 

a.     Stage One: Form I-526, Petition by Alien Entrepreneur

The I-526 petition is comprised of two main components: project documents and investor’s documents, which include proof of lawful source of funds documents.  While the law only requires a preponderance of evidence or “more likely true than not” standard, USCIS adjudicators often use a much higher level of scrutiny when reviewing the I-526 petitions.  As such, both components require a great deal of attention and preparation to ensure that they will pass the scrutiny of the adjudicator.

The Project 

Before a project’s documents are submitted to USCIS for review, they usually would have already gone through due diligence review: by the sponsoring regional center’s representatives, immigration attorneys who ensure their compliance with EB-5 law, securities attorneys who ensure their compliance with Securities Law, business attorneys and economists who ensure that the projections in the documents are accurate and reasonable, agents who decide to market the project to investors, and finally, the petitioning investors themselves who decide whether to make an equity investment into the project which would invest their money with little interest and a risk of losing the whole investment amount throughout the lengthy the EB-5 process. 

In addition to multiple layers of due diligence review, government agencies would conduct due diligence investigations and site visits any time from filing of an approval of an investment in a commercial enterprise until the adjudication of the first I-829 removal of condition for the project.  The most recently proposedEB-5 bill (as of December 15, 2015) would have required USCIS to perform at least one site visit to each new commercial enterprise and job-creating entity, which would include a review for evidence of direct job creation.  The Securities Exchange Commission (SEC) also conducts investigations on projects based on investigations or reports. 

The Investor

Even if the project passes the scrutiny of adjudicator and the government investigation team, an investor’s I-526 petition may still be denied if the adjudicator finds issues with the investor’s source of investment funds.

USCIS imposes a high standard of review that is difficult for many investors to attain.  For example, many banks in China do not easily print bank statements for clients and have restrictions on how far back they can issue bank statements.  Moreover, many countries also have strict currency control laws that make it extremely difficulty to transfer funds abroad. 

Some adjudicators measure the source of funds report based on U.S. standards and find that the records provided are inadequate or not lack credibility.  However, they may not fully understand how difficult it is for investors to obtain what adjudicators think are simple documents.  For example, it is extremely difficult to obtain a Notarial Certificate in China.  Intensive background review is required before such a certificate can be issued.  This is much more difficult than the simple signature of a notary public in the United States.

The standard of review for source of funds is often much higher than the standard of review for other visa categories.  Because of this high standard of review, source of funds issues often deter investors from filing I-526 petitions.

b.     Stage Two: Consular Processing (CP)/Adjustment of Status (AOS)

In this stage, the scrutiny focuses on the investor and derivative family’s personal eligibility to immigrate.  Like any other immigrant visa category, all applicants must gather and submit

criminal, military and medical documents to show, by a preponderance of evidence, that they will not be a threat to the United States and do not carry any communicable disease.  

For Consular Processing, NVC meticulously reviews the forms to ensure accuracy.  Any inconsistencies in the application, supporting documents, or previously submitted documents during Stage One may cause delays and heightened investigations. After the application passes the scrutiny of NVC, the Consulate conducts a second layer of review of the documents and then a third review at the interview. 

For Adjustment of Status within the United States, USCIS similarly conducts an in-depth review of the applicant’s background and history before approving the application. 

Overall, obtaining either an EB-5 visa to enter the United States or an approval to adjust status in the United States is not easy – certainly not any easier than for other visa categories.

c.     Stage Three: Form I-829, Petition by Entrepreneur to Remove Conditions

The preponderance of evidence standard also applies to this stage. Similar to Stage One, in practice, adjudicators often apply a much higher stand of review to I-829 petitions.

The I-829 petition requires the investor to prove that his/her investment funds have created at least 10 qualified full-time jobs for U.S. workers. In the direct investment or non-regional center context, a full-time job is defined as 35 hours per week.  Common proofs of employment include payroll records, Form I-9s and e-Verify.  For regional center investments, the investor must show that the assumptions used in the econometric report that established the direct (note that economists’ definition differs from above), indirect and induced jobs have been in fact created by proving that the assumptions are now true.  An econometric report must be prepared with documentation to support the assertions in the report.  Failure to prove that the required number of jobs have been created, or will be created in a reasonable time, will lead to denial of the I-829 petition.

The investor must also prove that his/her initial investment funds have not, in whole or in part, been returned to him/her.  Any return of dividends must be returns on the investment and are not returns of the investment.  Thus, the project must keep detailed records of all the investment funds from the time of investment to I-829 adjudication and show that the investment funds have been used to create the qualified jobs.

As discussed in Stage One, government agencies would conduct investigations and site visits to ensure that the jobs have in fact been created. 

d.     Short Answer

 It is not easy to obtain an EB-5 green card.  A very high level of scrutiny is applied to each of the three stages, in addition to the document scrutiny discussed earlier.  The U.S. government departments and agencies involved in the review process include the USCIS, U.S. Customs and Border Protection (CBP), U.S. Immigration and Customs Enforcement (ICE), Department of State, Department of Justice, Department of the Treasury, Federal Bureau of Investigation (FBI), Central Intelligence Agency (CIA), and the International Criminal Police Organization (INTERPOL).

III.           Why Is a Green Card Not Guaranteed?

The law does not permit the investment to be guaranteed by the assets of the enterprise and requires the investment to be at-risk throughout the duration of the EB-5 process, which is until final adjudication of the investors’ I-829 petition. 

The law does permit projects to insure the investment and to have third party guarantees that are not based on the assets of the enterprise in which the EB-5 investor is investing.  These do not conflict with EB-5 law.  However, any insurance and third party guarantees become valueless if the guarantors go out of business.  As such, according to unofficial positions taken by USCIS, each case will be judged on its merits for compliance and that all guarantor third parties except for the federal government create some level of risk. 

With the delays in processing time and visa backlog for Mainland Chinese investors, the investors’ investments may remain at-risk for over 7 years.  If their I-829 petitions are denied, not only will they be ineligible to obtain a permanent green card; they may lose their investment capital.  This is a considerable risk that investors take.  As such, investors usually make their choice of investment after significant consideration and due diligence research.

Despite significant due diligence review by multiple parties, no one can guarantee that an investor will obtain a green card at the end of the EB-5 process because it is uncertain whether the investment funds will create the required number of jobs until investor applies for removal of condition in five or more years after initial investment.

IV.           What Other Potential Challenges Do EB-5 Investors Face?

a.     Political Change

Until a permanent law is passed for the EB-5 Regional Center Program, the program’s expiration is a real possibility.  The recent September 30, 2015 sunset date for the regional center program is a good example of the challenges faced by EB-5 investors.  Investors were unsure whether the program would sunset and cause them to lose their chance to receive a green card even if they have already filed their petitions.  Investors were also worried that a new bill’s requirements would retroactively affect their filed petitions. These issues will remain a concern through the current extension deadline of September 30, 2016.

Even though the 1990 EB-5 Program is permanent law, new legislation can still affect certain aspects of the law, such as minimum investment amount, definition of targeted employment area, and source of funds standard.  Although unlikely, Congress can repeal and terminate the 1990 EB-5 Program.

Current and potential EB-5 investors should be aware of these risks. 

b.     RFEs and NOIDs

Despite all the hard work and effort by the project, investors, attorneys, agents, source of funds companies and translation companies to prepare the best petitions possible, USCIS may still issue requests for evidence (RFEs) and notices of intent to deny (NOIDs).  Investors should not be surprised if their petitions receive an RFE or NOID.  If analyzed and dealt with carefully by experienced immigrant counsel, responses to the RFE or NOID can usually overcome any lingering doubts adjudicators have.  Even though this process may take an additional few months, most petitions would eventually be approved.  Recent approval rate for I-526 petitions have been approximately 85 percent and over 90 percent for I-829 petitions.

c.     Slow AAO review

If the investor’s petition is denied at any stage, the investor can request administrative review.  However, this requires an additional month to possibly years of waiting for the review to be completed.  

This review usually focuses on certain nationalities, countries visited or residence, education, training, and individual occupations.  It is also a much higher level of review for activities such as human and drug trafficking, money laundering, support of and actual terrorist activities, and other crimes.

d.     Dishonesty and Failures

While there are now and then unscrupulous, agents, middlemen/woman, project developers, regional center operators and the professional service providers in the EB-5 arena, this is not uncommon among other industries.  In any industry, there will be some bad actors.  Although this is a challenge future legislation will likely seek to correct through greater enforcement measures, the number of bad actors or failures are very few proportionate to the number and sizes of the projects.


The EB-5 visa is perhaps the most difficult employment-based visa to obtain.  In addition to investing the requisite amount of capital, the investors have to prove that their investment created the requisite number of qualified jobs for U.S. workers in order for them to attain their green card.  This is a long and difficult process.  If potential investors want a quick way to obtain a green card, then they should look into another visa category instead of EB-5.

David Hirson

David Hirson

David HirsonDavid Hirson, founder of David Hirson & Partners, LLP, is an EB-5 investment immigration attorney with over 30 years experience practicing immigration law.