With rising demand for the US EB-5 program, industry experts expect processing times to speed up soon. “Since the US government is prioritising the hiring of additional staff in response to the current backlog of pending EB-5 applications, we sense newly filed applications will be processed in around 24 months from today,” says Shai Zamanian, Legal Director of The American Legal Center, the leading EB-5 experts in the Gulf region.
The EB-5 program, also known as the Immigrant Investor Program, is a US government initiative that offers foreign investors the opportunity to obtain US Green Cards by investing in American businesses. Through the program, investors are required to invest at least $800,000 in a new commercial enterprise that will create or preserve a minimum of ten full-time jobs for US workers.
Successful applicants and their families receive Green Cards allowing them to freely live, work and travel in the US. The EB-5 program has been in place since 1990 and has helped in attracting billions of dollars in foreign investment to the US.
Much like other industries, the EB-5 program witnessed a disruption during the spread of Covid-19. The pandemic caused government offices to close and stop processing pending applications. In December of last year, the United States Citizenship and Immigration Services (USCIS), the US government agency responsible for administering the EB-5 program, released its Fiscal Year (FY) 2022 progress report. The report states that during the Covid pandemic in April and May of 2020, USCIS revenue dropped by 40 per cent, leading to low cash reserves.
This in turn led to USCIS initiating a hiring freeze and issuing furlough notices to 70 per cent of its workforce. According to the report, with the rebound of revenue in June 2020, “furlough notices were revoked, but adjudication capacity was severely impaired by the continued hiring freeze, workforce attrition, and $500 million in budget cuts that included reducing contract worker staffing at the National Benefits Center by over 1,000 positions. These contract workers play a critical role in preparing cases for adjudication by our USCIS workforce.”
In addition to layoffs due to the pandemic, the EB-5 program was disrupted due to Congress’s failure to timely reauthorise the Regional Center Program prior to its sunset date on June 30, 2021. The EB-5 Regional Center program was created by Congress in 1992 and is the preferred route for EB-5 investors as they can take advantage of a passive investment but still avail the benefits and obtain Green Cards for themselves and their family members.
In the past, the EB-5 Regional Center Program was automatically renewed but because it was decoupled from the Congressional budgetary process, it required a further act from Congress to be reauthorised in June 2021. Due to the program’s suspension, investors could not file new EB-5 applications, which translated into less revenue for USCIS. As this agency is primarily funded through the filing fees paid by applicants, the sunset of the program had a considerable impact on its operations. The adverse economic impact of the pandemic coupled with the sunset of the program led to USCIS staff being cut by at least half.
The EB-5 Regional Center Program was reignited with passage of the Reform and Integrity Act in March 2022. The resumption of the program led to a surge in the number of EB-5 applications filed by investors, which incentivised USCIS to hire more staff for adjudication of EB-5 applications. During the October 2022 EB-5 National Stakeholder Engagement hosted by USCIS, the Immigrant Investor Program Office (IPO) announced that it is prioritising the filling up of vacancies and onboarding of newly hired staff.
“While these announcements were made in late 2022, it will take some time for new staff to be properly trained and therefore it takes time to turn the engine back on,” says Zamanian. “The good news is that we are seeing more approvals for clients that filed in 2019. Approvals are slowly but surely accelerating.”
According to the USCIS FY 2022 progress report, USCIS is striving towards further “operational improvements to achieve greater efficiency and improve customer service throughout the agency.” With this bright outlook for future processing times, it is expected that new investors filing for their US Green Cards through the EB-5 program will not be greatly affected by the current backlogs and will benefit from timely processing of their applications. “With more officers in place, we expect processing times to neutralize in due course,” says Zamanian.