EB-5 I-526 petition requirements & recent processing times
I-526 petition investor petition requirements
For an immigrant investor hoping to obtain a Green Card through the EB-5 program, the path begins with choosing an investment project and then filing Form I-526, the Immigration Petition by Alien Investor.
The I-526 petition must show that the immigrant has invested or is in the process of investing the required capital. The required investment is $1.8 million, or $900,000 if the project is located in a Targeted Employment Area (TEA).
Investment is made in a New Commercial Enterprise
The investment capital must go into a New Commercial Enterprise (NCE). An NCE is any U.S. for-profit enterprise established after November 29, 1990.
When investing in the EB-5 Regional Center Program, the NCE is the fund in which the immigrant invests. In general, the fund will take the form of either a Limited Liability Company (LLC) or Limited Partnership (LP).
In the context of a direct EB-5 investment — that is, an investment not made through a regional center — the NCE is the business wherein the immigrant invests and which will create the required jobs for U.S. workers.
EB-5 investment must be 'at risk'
USCIS requires that the immigrant investor’s funds be deemed “at risk” and irrevocably committed to the NCE. Note that the at-risk requirement still allows an investor to mitigate the risk of their EB-5 investment; third-party due diligence is an essential element of intelligently assessing the risk of an investment.
Lawful source & path of funds
The funds used by an immigrant for an EB-5 investment must be lawfully earned and follow a lawful path. Source of funds could come in the form of salary, earnings, investment or business distributions, sale or mortgage of assets or personal property owned by the immigrant investor, or gifts from third parties (provided those funds were also lawfully obtained).
Regarding source of funds, in 2020, a landmark legal ruling occurred: an appeals court upheld a previous court ruling that said that an EB-5 investor can use cash from an unsecured loan for their investment capital — despite USCIS not allowing this as a source of funds for the past several years. Then, on April 14, 2021, USCIS approved the Zhang I-526 petition with an unsecured sources of funds, the same petition it had been fighting in court.
Active management of the NCE
USCIS requires that the immigrant investor participate in the active management of the NCE. This requirement can be satisfied either through day-to-day management of the NCE, which is required with a direct investment, or assisting in the formulation of the NCE’s business policy (i.e. having voting rights and exercising same).
Regional center investment: no day-to-day management
Investors in the Regional Center Program have the advantage of not needing to actively manage their business. For an EB-5 enterprise that is organized, say, as a Limited Partnership, investors generally have the same rights and duties typically accorded to any limited partner under the respective state’s Limited Partnership Act.
The same holds true of the immigrant investor if the NCE was formed as a Limited Liability Company. For the purpose of the EB-5 investment, this level of involvement, i.e. as a Limited Partner in an LP or as a Member in an LLC, is deemed sufficient by USCIS.
EB-5 job creation requirements
An EB-5 investor is required to create 10 full-time U.S. jobs and this must be documented in the business plan of the I-526 petition. Credible evidence can be in the form of a third-party Economic Impact Analysis.
The number of jobs that are estimated to be created through the EB-5 investor’s capital investment is based upon a comprehensive business plan and a detailed economic analysis.
For either direct or regional center investments, the required jobs must be created within two years after the petitioner receives their conditional permanent residency.
The types of jobs that are allowed depend on whether the investor has made a direct investment or an investment through the Regional Center Program.
Direct investment job creation
For direct investments, 10 direct, full-time (not less than 35 hours per week) positions must be created by the EB-5 investor. The EB-5 investor, and his or her family and any non-immigrant alien do not qualify towards this number.
At the time of the I-526 petition, if the positions have not yet been created, the NCE’s business plan must contain a thorough description of the NCE’s hiring plan that will show the positions that would be created with that investment and when those positions would be filled.
Regional center job creation
For investors in the Regional Center Program, job creation is more flexible; the 10 full-time U.S. jobs can include direct, indirect (supplier industry jobs) or induced full-time (jobs created in the local economy as a result of spending by employees of the investment project).
I-526 processing times
Historical I-526 processing trends
Historically, this number has changed quite significantly. Using the Historical National Average Processing Times as reported by USCIS we can see the recent fluctuations in the fiscal years 2016 through 2020:
2016 - 15.9 months
2017 - 18.8 months
2018 - 22.2 months
2019 19.8 months
2020 13.1 (stats as of July 2020)
The recent 2020 I-526 stats present very positive news for investors. The recent improvement by USCIS makes many stakeholders wonder if the EB-5 program — one predicated on creating U.S. jobs — has been mandated to improve performance given the current economic situation when job creation is valued at a premium.
Why USCIS provides different statistics and how to read them
Potential immigrant investors should note that the agency’s “Check Case Processing” reports don’t reflect what we see in the USCIS Historical National Averages.
Check Case Processing reports offer much higher numbers that might be off-putting to someone considering the program; but these numbers don’t reflect the average reality. In these reports that offer time period, the first number is the time it takes to process half of the applications (the median) and the second number is the time it takes to process 93% of the cases. Thus, by definition, the Check Case Processing range reflects delayed processing cases.
COVID-19 has temporarily slowed down processing
It must be noted that the pandemic has greatly impacted USCIS processing of I-526 and other petitions. Processing numbers during the height of the crisis do not reflect normal processing. And after much of the nation is vaccinated and normalcy returns, we should expect much better EB-5 processing from the agency.
New leadership & legislation should improve EB-5 processing in 2021 and beyond
There are a few more factors that point to much better processing for EB-5 in the near future. First, the new Biden administration is far more immigration friendly than the previous Trump government. Second, the new Homeland Security Secretary, Alejandros Mayorkas, was a former leader of USCIS and is familiar with and supportive of EB-5. Leadership that believes in immigration in general and EB-5 in particular should make a substantive difference to processing efficiency.
Also, the EB-5 Reform and Integrity Act 2021 will not only reauthorize the program for five years, but mandate that USCIS charges the fees necessary to ensure an average of four months to process a Form I-526 with a Targeted Employment Area (TEA) investment, and eight months for a standard investment.
What to do if your I-526 adjudication is taking too long
Keep in mind the numbers USCIS publishes are averages. But if you have filed your I-526 and your case is outside the average processing time, you should speak with your immigration lawyer. You or your lawyer could send an email inquiry to the IPO office. If your lawyer believes your case is unreasonably delayed, a writ of mandamus may be the next step.
An I-526 petition is the first application that an EB-5 investor must file and must demonstrate, with a credible business plan, that the program’s requirements will be fulfilled: capital investment; a lawful source and path of funds; required job creation; the investment will be “at risk"; etc.
While average I-526 processing times increased in the recent past, 2020 started out very well — until COVID-19 hit in full force. But as normalcy returns, new leadership and new legislation should significantly improve I-526 processing in 2021 and beyond.