If there is consensus within the EB-5 community, it is that we have too few EB-5 visas. Efforts before Congress, federal courts, and the Executive under varied theories to expand visa capacity have not yet yielded fruit, though the efforts will continue. In the meantime, without a change in the law, a court order, or executive action, a meaningful dent in the EB-5 visa backlog can be made this fiscal year. How? USCIS can simply do its job of deciding cases. More specifically, it can further refine its “visa availability” approach to prioritize petitions filed by nonimmigrant status-holders, many of whom are Indian nationals in H-1B status. Secondly, USCIS can prioritize adjustment of status applications (Form I-485) filed by nonimmigrants, including worldwide EB-5 investors in F, E, and L status, to ensure adjudication in FY 2021. Doing so will liberate years’ worth of EB-5 visas, optimizing allocation of precious numbers. Without such efforts, thousands of EB-5 visas will again be wasted this fiscal year.
As background, large numbers of visas went unused in fiscal year (FY) 2020due to Covid-19 related consular closures. The Immigration and Nationality Act (INA) reallocates unused visa numbers in the following year. Under the INA, the 121,500 unused visas from the family-sponsored quota spilled over to the employment-based quota at the start of FY 2021. This process resulted in an all-time high employer-based visa limit of 161,500in FY 2021from the normal 140,000inOctober 2020, the start of FY 2021. Under the INA, the EB-5 category receives its 7.1% share of the spillover or about 8,620 additional visas in FY 2021. Added to the normal annual EB-5 limit of 9,940, we have an unprecedented total of about 18,500 EB-5 visas in FY 2021.
However, many of these visas are poised to go unused this fiscal year, as they went unused last fiscal year.MostEB-5 visas are issued by consular posts abroad. Continuing Covid-19 related consular closures mean that the blessing of extra EB-5 visas will not reach the parched landscape. If this persists, the gains from FY 2020’s spillover will be lost.¹
Apart from consular re-openings over which we have little say, there is one solution: allocatingEB-5 visas via adjustments of status.
While we have precise data from the U.S. State Department (DOS) regarding the number of EB-5 visa applicants at NVC,2we do not have USCIS data regarding the number of EB-5 adjustment applicants at USCIS. However, DOS estimates show that there would be about 33,940 visa applicants based on the Form I-526 inventory at USCIS. If we omit Chinese and Vietnamese applicants excluded from priority processing under the visa availability approach, there would be 18,000 visa applicants. By far the largest portion of these 18,000 is Indian investors at almost 5,000 applications. Although I cannot cite to data, I would guess that a majority of Indian EB-5 investors are in the U.S. and can adjust status. If USCIS prioritizes non-visa backlogged petitions as it says it will, and if USCIS further prioritizes EB-5-based Form I-485 applications, we will have done the best we can to ensure all the precious EB-5 visas are allocated optimally during this anomalous time.
I believe special circumstances support USCIS prioritizing EB-5-based adjustment of status applications. This is because when EB-5 visas go unused in a fiscal year, they can never come back to EB-5. Under the INA, unused EB-5 visas “fall up” to EB-1; unused EB-1 visas fall down to EB-2; unused EB-2 visas fall down to EB-3.³ Unused EB-3 visas do not fall further down to EB-4 where they may eventually replenish EB-5. Instead, unused EB-3 visas “fall across” to family-sponsored visas.⁴
This solution feels right and good. Many Indian EB-5 investors are EB-2 and EB-3 Indian nationals trying to manage the decades-long, if not century-long visa backlog for Indians in these categories. Many have spent entire adulthoods in the U.S., completing degrees, raising families, and rising in their professions. Many are physicians serving in the Covid-19 frontlines, where green card mobility would serve the public good. Prioritizing EB-5 cases for adjustment-eligible investors serves the compelling U.S. government interest in optimizing visa usage, an interest the INA expresses in preserving unused visas.
Finally, optimizing visa usage this year with adjustments will reduce worldwide demand in future years. This would reserve more visas for backlogged Chinese and Vietnamese investors, cutting their backlog spanning a decade-plus for Chinese investors. Reducing the visa backlog is, of course, the first step toward reviving EB-5 demand. With a total of merely 61 petitions filed in the second and third quarters of FY 2020, sensibly reviving EB-5 demand is industry priority one.
Unlike other backlog fixes bill that would pit one group’s interest against another in the zero-sum quota game, this solution harms none and benefits all. If ever there was a visa numbers solution embodying Pareto optimality, this is it.
