EB-3 Other Workers (Unskilled) - Current DOL Processing Times

The link to this blog will be provided in all cases where EB-3 candidates request information about the status of a pending application - PERM or PWD potentially impacting them - on file with the U.S. Department of Labor. Personalized updates are not possible. Please check here first rather than emailing or messaging us in future months. The DOL releases processing statistics for the prior month 5-10 days after it ends and we will make every effort to update our write-ups within a few days of that. We will discuss the processing times that are currently posted below and can be found at: https://flag.dol.gov/processingtimes

First, PERM processing times are about 8 months currently. The data below shows this. The median processing time is about 249 days from filing. In October (month 10 of the year), they were up to February (month 2) cases. Obviously, when a case was filed within the month of February makes a key difference here - someone filed February 28th should expect their case processed a month later than someone whose was filed on February 1st.

Wage determination request processing time are often mistaken for PERM processing data or otherwise misinterpreted for some reason. As of October 31, 99+% of wage determinations filed in December had been processed and nearly all of the January through March ones had along with a sizable minority of Aprils. However, the key to these data point is to look at the bigger picture. What this says is “if the prevailing wage impacting my case was requested in March and I have no heard yet, I should expect to hear very very soon; if it was in April or even may there is somewhere from a very good to ok chance that we will hear in November.” THIS IS NOT PERM DATA, though. This only involves wage determination requests.

A final note is that the DOL releases quarterly data because it is required to by law an accountability measure to Congress and the taxpayers who fund its operation. The quarterly data is absolutely not released as a mechanism by which PERM candidates/beneficiaries can reliably track their cases.

Rural Projects: The Next Boom

As we wait for the policy announcements on how the new EB-5 and regional center rules will play out, it is becoming increasingly clear to that there is going to be a feeding frenzy among Chinese investors for something like 1,500 to 2,000 units in rural EB-5 projects. This is because the new law seems to create a set-aside of 20% of the annual visa allotment for rural projects. Because this both hasn’t been done in the past, there will need to be a new line in the visa bulletin for EB-5 rural (or, I suppose, two lines EB-5 rural RC and EB-5 rural non-RC). With the China queue proceeding at a slow pace due to massive oversubscription, I think we can all expect a huge short-term demand for EB-5 rural investment units among Chinese families, either with or without existing cases already on file. Ultimately demand will fizzle when the queue is established, but I expect we will see 3 years’ of the rural quota gobbled up within a few months of the program’s restart date, whether that’s in May or there’s a comment period before the new rules are fully implemented and petitions can be filed again.

Ruby Law Group represents a number of rural projects in the market today or about to come to market. If you have a rural project that you’re interested in funding via EB-5, now is the time to get moving - there’s a boom coming, but it will be over as quickly as it arrived.

EB-5 Regional Center Reauthorization - Legislative Update - February 2022

I went to bed early last night and silenced my phone notifications, which turned out to be a good thing, because I woke to a bevy of messages about a draft bill tack-on that is potentially going to be added to the spending bill that needs to be voted on around February 18, 2022. Let’s get into what the draft legislation says and, perhaps more importantly, whether it will actually be passed into law.

Will the bill pass?

This is the key question. I’ve had and am having calls with either senators offices or people who have access to them. Right now, people are saying 50/50. Personally, I think that sounds low and that number will rise steadily if -and this is the key part - it becomes likely that a comprehensive spending bill will pass on or shortly after February 18.

Why would a bill not pass February 18?

If there’s no compromise with certain key players in the Senate, you could just see another Continuing Resolution to fund the government through the end of the fiscal year (meaning no tack-on legislation like RC reauthorization).

What does the bill say?

1. The investment amount is going up. We always knew that was coming. Now the parameters are set. $700,000 for a TEA project, $850,000 for a non-TEA.

2. TEA definition tweaked, for both urban and rural. This was expected and the current compromise legislation probably resolves this more favorably for the industry than we were expecting.

3. Rural TEA’s boosted. 20% of visas will be set aside only for projects in rural areas. This is massive for rural projects. Of course, to hit the quota, we’d need more investments and have something done to alleviate the China backlog, but now is not time for that - perfect is the enemy of good.

4. Structural changes on issues like redeployment and program integrity. These do not immediately impact investors or projects so we will not worry about those here.

5. Priority given to public works projects. LOL. No government or PPP is gonna want to deal with the administrative hurdles that go into developing an EB-5 project when they can issue bonds at sub-4%. It makes no economic sense whatsoever, but if this gets another senator’s vote on the matter, sure, go for it man.

Who could mess this up?

The EB-5 lobbying groups that spend the most time in public and try to present themselves as the face of the industry have an absolutely abysmal track record - the current lapse of the regional center program being the biggest example, but it goes back a decade and they are simply not effective surrogates for the people developing projects. They fouled up the last reauthorization. During the lapsed period, several groups have put out statements showing that - somehow, still - they just don’t “get it” with respect to what’s going to be needed to get any reauthorization. So based on their past track record, there’s obviously still time for them to screw this all up for the rest of us.

I want to invest at the $500,000 level, when do I need to do it by?

No one knows for sure, but obviously the most conservative route to guarantee you’ll be fine at that level would be to have your I-526 received by USCIS by mid-month. Any passed legislation will be signed into law by the President and take effect quickly. USCIS may request time to put out guidance on a new law and hold acceptance of I-526’s based on the new law aside for a certain period of time, but that will not extend the $500,000 TEA-based investment currently available via the direct route.

EB-5 Direct Projects - How to Analyze them?

The past several months have been the first months in more than 15 years when smaller, direct EB-5 projects have dominated the market. While the regional center program may return in the coming months, it also may not. Regardless, it seems as if a new day in EB-5 is dawning. In the past, regional center projects offered very little immigration risk (due to enhanced job counting possibilities) and the perception of little financial risk. Today, it seems like many of the projects we see in the marketplace offer tremendous amounts of both immigration and financial risk. In analyzing all of this, we usually suggest prospective investors start with these core questions:

1. Is this a fair deal? What is the potential financial upside and is that commensurate with the risk of losing up to $500,000?

2. What, if any, assets underlie the investment? This is very important and it is why real estate was always favored among regional center projects - because it is unlikely it will go to zero. There’s absolutely nothing necessarily wrong with investing in a service-related business, but the upside should match the risk.

3. What is the project structure and who is in charge?

4. What is the business model? Exactly what is the company selling, how much will it cost to scale, and at what point do you reach break-even?

5. What are the sources of funding?

6. How do the projections look? Where did they come from? How reliable are they?

7. Employment creation - what jobs are being created and how many? Does this look and feel reliable?

8. What is the payback plan? Again, this comes back to #1 and #2 somewhat - how will the project get you your money back?

A final note of caution I would say to any prospective investor - and I say this as someone who has been a partner in many EB-5 projects - is that a PPM does not protect you, it protects the company offering the investment. It’s a very important document, but what it is really doing is tell you all the reasons you cannot sue the offeror of the investment if things go poorly, telling you all the ways you might lose your money. It is important you understand these things, but the key to analyzing an EB-5 project is not that document; it’s the Business Plan and financial data. That is where I would tell any investor focusing his or her energy in analyzing whether they want to proceed with any project.