EB-5: At 2023 Half-Year-Mark, I-526 Petition Volume Already Exceeds 2022 Total – But Denial Rates Remain Elevated

Varvara Latyntseva
Riga

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The United States Citizenship and Immigration Services (USCIS) has published EB-5 program petition statistics for the second fiscal quarter of 2023 (USCIS’ fiscal year runs from October 1st to September 30th – thus, Q2 relates to the period from January 1st – March 30th). 

Normally, it would be interesting to compare the data to the previous year but, because the Regional Center EB-5 program in Q1 and Q2 of 2022 was experiencing a technical lapse, we have decided to look at 2022 as a whole and Q1-2 2023. 

Petition I-526

The data reflect a sharp rise in new applicants for the EB-5 program in FY2023:

The volume of I-526 petitions reviewed by USCIS in Q2 is almost double that of  Q1, but it is still very low if we take into consideration the number of pending petitions. By the end of Q2, there were 12,819 petitions awaiting adjudication. A total of 535 new petitions were submitted in Q2 2023, a number more or less in line with the number submitted in Q1 2023 when 556 petitions were filed. 

The denial rate, which increased dramatically in 2022, remains exceptionally elevated: In Q2, the denial rate for I-526 represented 55% of all petitions reviewed. This means that USCIS rejected more than half of all applicants who invested funds and had been waiting, on average, for 50 months for adjudication. For comparison, in the last GAO report, which covered the years 2016 to 2021, the rate of denial for I-526 applicants was only 13%.  

According to the same GAO report, USCIS does not track internally the reasons for denials, so it is hard to determine what the main reasons were for such a high spike. However, we may assume that among the reasons are poor quality projects, inexperienced immigration lawyers offering cheaper services, Vietnam currency control issues, and more power in the hands of USCIS after the RIA came into effect.

Additionally, the long processing times may have resulted in some applicants dropping out of consideration. Also, in some cases where USCIS asks for additional documents, these may be challenging to procure because of the time that has passed since the funds were initially received. Moreover, in November 2019, which saw a large number of petitions filed ahead of the minimum investment increase, USCIS received many poorly prepared petitions, which no doubt had a negative impact on denial rates.

Petition I- 829

These data reflect a number of applicants who started their process years ago and are now at the stage of receiving a Permanent Green Card. 

The number of new applications (352) was significantly higher than in Q1, when only 81 investors had submitted their requests. The number of processed petitions had not changed significantly. Denial rates have also increased for I-829 applications: In 2016 - 2021, the rate was only 5% but, by Q2 2023, it had reached almost 20%.

Regional Center petitions

Several categories of petitions in USCIS report pertain to the Regional Centers. Among these are the old (pre-RIA) ones, I-924 and I-924A, which are for initial registration and annual certification form. The other Regional Center petitions are the new I-956 forms, implemented after RIA 2022 for registration of the Regional Center (including the ones filed for re-registration), the I-95F for each new EB-5 project, the I-956G annual statement, and the I-956H, the bona fides for personnel of Regional Centers and projects. 

Two observations are evident from the Regional Center petition data:

First, 287 regional centers submitted their annual certification form I-956G, which means that at the moment, there are 287 active Regional Centers (despite the USCIS' page showing 640 Regional Centers).

Second, 50 new EB-5 projects were introduced in Q2 2023, and 82 have been filed since the RIA implementation. In total, therefore, 132 new EB5 projects have appeared since the implementation of the new EB-5 program regulations in March 2022. The update does not contain information about how many of them were actually approved, which means it was a very low number. The remainder of them are still pending USCIS review.

I956K - Filings by International Third Party promoters and Migration Agents

It is also interesting to see in the report that only 38 international promoters have filed I-956K petitions, all of which are still pending review. As a reminder, RIA legislation introduced a new requirement for all foreign companies promoting EB-5 projects outside the US to be registered with USCIS. USCIS only published the registration at the beginning of Q2 2023, in January 2023.

Consequently, any international promoter who was in business could file it in the following February or March. It is, therefore, perplexing to see only 38 such forms filed in accordance with the new requirements, especially since USCIS requires the submission of form I-956K by legal entities and the main personnel who work directly with EB-5 investors.

During the last public EB-5 engagement in April 2023, USCIS confirmed that, for now, there is no official webpage where you can review promoters or migration agents with an active registration status. However, USCIS has promised to look into this, so perhaps in a few years we will see it online. 

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