Impact of the Lapse in EB-5 Regional Center Program on Investors, Investments and Job Creation
by Invest In the USA
Not only is the current lapse in statutory authorization of the EB-5 Regional Center Program (the Program) preventing regional centers from generating new foreign direct investment to aid in the nation’s economic recovery, it’s also putting EB-5 investments already in place and committed to job-creating projects at stake.
With their legal immigration process put on hold indefinitely due to the lapse of the Program, immigrant investors who have already invested in the U.S. through an approved regional center could withdraw their EB-5 application and capital investment, potentially leading to tens of thousands of lawsuits and putting economic funding and job creation at risk.
Our analysis shows that the current lapse of the Program has affected more than 32,500 committed immigrant investors with an I-526 petition on file, putting at least $15 billion in capital investment and over 485,800 American jobs potentially in jeopardy.
Committed EB-5 Investors & Families Affected
Under the current lapse in authorization of the Program, USCIS has halted their adjudication of all I-526 petitions filed by EB-5 investors affiliated with regional centers. IIUSA estimates that over 12,500 EB-5 investors had a pending I-526 petition as of June 30 when the Program expired. Historically, according to the Department of State, 93.4% of the EB-5 visa numbers have been used by applicants who invested through a regional center. That is, nearly 11,680 EB-5 investors with an I-526 petition on file will not receive any adjudication on their EB-5 cases during the lapse of the Program and experience delays in their legal immigration process (see Table 2).
In addition, the July, August and September Visa Bulletins noted that EB-5 visa numbers are “unauthorized” for issuance to all applicants who are associated with the Program (the “I5” and “R5” categories). As a result, visa applicants with an approved I-526 petition currently are not able to receive any EB-5 visa number after the Program’s expiration on June 30. Based on the data from USCIS and Department of State, IIUSA estimates that nearly 20,840 EB-5 investors whose I-526 petitions have been approved are not able to continue in their legal immigration process due to the lapse of the Program (see Table 3).
Overall, it’s our estimate that more than 32,500 EB-5 investors who have invested in a job-creating project through an approved regional center are affected by the current lapse of the Program. These committed investors and their family members are facing an indefinite delay in their legal immigration process until the Program is reauthorized by Congress.
Capital Investment & Job Creation at StakE
Each one of these EB-5 investors who are affected by the lapse of the Program has already committed at least $500,000 capital investment to an economic development project in the U.S. By our estimates, approximately 300 of these investors have invested at least $900,000 through a regional center after the EB-5 regulatory reform raised the minimum investment amount between November 21, 2019 and June 22, 2021.
We estimate that more than $4.76 billion in capital investment has been or in the process to be injected into the U.S. economy from EB-5 investors with a pending I-526 petition when the Program expired on June 30. In addition, EB-5 investors whose I-526 petitions have been approved have already generated over $10.4 billion, funding a variety of job-creating projects through regional center across the country. Together, more than $15 billion in capital investment has been committed by the EB-5 investors who are affected by the current lapse of the Program (see Table 4). These investments are at stake if the Program is not reauthorized by Congress.
Furthermore, these EB-5 investments save and create jobs for American workers. In fact, the Department of Commerce concluded that each unit of EB-5 investment is expected to create 16 jobs when it’s used in conjunction with other financing sources. That is, more than 485,800 American jobs would be generated by the EB-5 investment associated with the immigrant investors whose legal immigrant process is affected by the lapse of the Program. Now these jobs are at stake.
Lastly, the vast majority of EB-5 projects are funded by a combination of EB-5 investment and other financing sources such as bank loans, developer equity, etc. In addition, EB-5 investors are required to pay taxes to the federal, state and local governments on their worldwide income. The role of EB-5 investment in a project’s capital stack and the tax benefits from immigrant investors both indicate that the economic consequence associated by the EB-5 applicants affected by the lapse of the Program are well beyond the amount of EB-5 investment or the number of American jobs at stake, and potentially could be tens of billions. It’s imperative for Program to be reauthorized by Congress in order to prevent the significant economic loss from happening.
 Since USCIS has not released the I-526 quarterly statistics for Q3 FY2021 when this analysis is written, we estimated the number of I-526 petitions pending as of June 30 (the end of Q3) by adding our estimated number of new I-526 petitions filed in Q3 FY2022 (476 petitions) to number of pending I-526 petitions as of the end of Q2 (13,044 cases), then subtracting the estimated number of I-526 adjudication during Q3 (1,017 petitions). Our estimate does not account of the number of I-526 cases withdrew during Q3 FY2021.
 Due to data scarcity, we have to rely on approximation to estimate the number of investors fall into this category. Specifically, according to USCIS, 21,503 EB-5 applicants with an approved I-526 petition were waiting visa availability because of the backlog. These investors are affected by the lapse and not able to receive any EB-5 visa numbers even through they are not used by other applicants. In addition, based on the average I-526 approval volumes, we estimate that 809 I-526 cases have been approved but the petitioners have not yet received their conditional legal permanent residency before the Regional Center Program expired due to processing time.