Report to Congressional Committees

United States Government Accountability Office

GAO

April 2005 IMMIGRANT 

INVESTORS 

Small Number of 

Participants 

Attributed to Pending 

Regulations and Other 

Factors 

GAO-05-256 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

www.gao.gov/cgi-bin/getrpt?GAO-05-256.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact Paul Jones at 

(202) 512-8777 or jonesp@gao.gov. 

Highlights of GAO-05-256, a report to 

congressional committees 

April 2005

IMMIGRANT INVESTORS 

Small Number of Participants Attributed 

to Pending Regulations and Other 

Factors 

The number of visas granted under the EB-5 category has been a small 

fraction of the approximately 10,000 allocated annually by the authorizing 

legislation. According to State Department records, a total of 6,024 visas 

have been issued to immigrant investors and their dependents since 1992. As 

of June 2004, 653 investors (not including dependents) had met this 

immigration category’s requirements and received permanent legal resident 

status. 

Number of Visas Issued by Year, Fiscal Years 1992 through 2004 

Total = 6,024

0

500

1,000

1,500

2,000

10,000

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

596

464 548

934

1,570

819

252 231 188 147 78 71 126

Year

Number of visas issueda

Total annual visa allocation per year

Number of visas allocated per year

Source: GAO analysis of State Department data.

The amount of visas issued per year has been 

significantly lower than the amount allocated per year

a

Since decisions for applications are not necessarily rendered the same year they are received, 

numbers of visas issued in a year may be from applications submitted in prior years. 

The immigration officials and lawyers who represent immigrant investors 

that we interviewed attribute the low participation to the rigorous 

application process and the uncertainty of meeting the requirements that can 

result in the permanent residency benefit. They also cited, as a potentially 

negative impact on future applicants, the failure to issue implementing 

regulations to adjudicate hundreds of EB-5 permanent residence 

applications that have left investors in conditional resident status—some for 

as long as 10 years. In 2002, Congress mandated that the regulations be 

issued by March 2003. The regulations were initially drafted but continue to 

be under review by the Department of Homeland Security. DHS cited many 

difficult and competing demands associated with establishing the new 

department and meeting its mission challenges as reasons the regulations 

have not been completed. 

About 83 percent of investors and their dependents who were granted 

permanent resident status through the EB-5 category are from Asia. EB-5 

participants have invested an estimated $1 billion in a variety of businesses 

(e.g., hotels/motels, manufacturing, restaurants, real estate, and farms). GAO 

estimates that 41 percent of the businesses were established in California. 

In 1990, Congress established an 

investor visa category, referred to 

as EB-5, whereby immigrants are 

granted conditional residence and 

after 2 years, permanent residence 

status in the United States if they 

invest in a commercial enterprise 

that will benefit the U.S. economy 

and create at least 10 full-time jobs. 

The Basic Pilot Program Extension 

and Expansion Act of 2003 (P.L. 

108-156) mandates that GAO 

provide certain information 

regarding the EB-5 employment 

category. In response to the 

mandate, this report provides 

information on immigrant

participation, including the number 

of participants, their countries of 

origin, and the number who sought 

U.S. citizenship. Also, this report 

includes information about the 

types of business established and 

where they were established. 

What GAO Recommends

To better achieve the economic 

benefits of the EB-5 visa category, 

GAO recommends that the 

Secretary of the Department of 

Homeland Security finalize and 

issue regulations necessary to 

provide final adjudication to those 

cases dependent on these 

regulations. 

In commenting on our 

recommendation, DHS stated that 

the regulations have been, and 

remain a priority within the 

department.
Page i GAO-05-256 Immigrant Investor Program 

Letter 1

Results in Brief 2 

Background 4 

EB-5 Participation Is a Small Fraction of the Visa Allocation 7 

Immigrant Entrepreneurs with Permanent Resident Status Have 

Invested an Estimated $1 Billion in a Variety of Businesses, 

Primarily in California 16 

Conclusions 19 

Recommendation 20 

Agency Comments and Our Evaluation 20 

Appendix I Objectives, Scope, and Methodology 22 

Objectives 22 

Overview of Our Scope and Methodology 22 

Number of Immigrant Investors and Country of Origin 23 

Immigrant Investors and Their Businesses 23 

Processing of Immigrant Investor Visa Applications at the Two 

USCIS Service Centers and Criteria Used for Approvals and 

Denials 27 

Views of Immigration Lawyers 27 

Data Reliability 27 

Appendix II Immigrant Investor Program Application Process 29 

Immigrant Investors’ Initial Application 32 

Application for Conditional Resident Status 35 

Application to Change Conditional Residency Status to Permanent 

Residency Status 36 

Application for U.S. Citizenship 38 

Appendix III Comments from the Department of Homeland 

Security 39 

Appendix IV GAO Contacts and Staff Acknowledgments 41 

GAO Contacts 41 

Staff Acknowledgments 41 

Contents 
Page ii GAO-05-256 Immigrant Investor Program 

Tables 

Table 1: Number of EB-5 Visas Issued, by Country of Origin, Fiscal 

Year 1992 through 2004 15 

Table 2: Estimated Number of Immigrant Investors Who Have 

Sought U.S. Citizenship, Fiscal Years 1992 through June 

200416 

Table 3: Types and Estimated Number of Businesses Established 

by Immigrant Investors with Permanent Resident Status, 

Fiscal Years 1992 through June 2004 17 

Table 4: States Where Immigrant Investors Established Business 

Operations, Fiscal Years 1992 Through June 2004 18 

Figures 

Figure 1: EB-5 Application Process 6 

Figure 2: Number of Visas Issued by Year, Fiscal Years 1992 

Through 2004 8 

Figure 3: EB-5 Application Processing Flow 30 

Abbreviations

AAO Administrative Appeals Office 

CLAIMS Computer Linked Application Information Management 

 System 

DHS Department of Homeland Security 

DOJ Department of Justice 

EB-5 employment-based visa category, fifth preference 

INS Immigration and Naturalization Service 

IVAMS Immigrant Visa Allocation Management System 

MFAS Marriage Fraud Amendment System 

RFE request for evidence 

USCIS U.S. Citizenship and Immigration Services 

This is a work of the U.S. government and is not subject to copyright protection in the 

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reproduce this material separately. 
Page 1 GAO-05-256 Immigrant Investor Program 

April 1, 2005 

The Honorable Arlen Specter 

Chairman 

The Honorable Patrick J. Leahy 

Ranking Minority Member 

Committee on the Judiciary 

United States Senate 

The Honorable F. James Sensenbrenner, Jr. 

Chairman 

The Honorable John Conyers, Jr. 

Ranking Minority Member 

Committee on the Judiciary 

House of Representatives 

To promote job creation and encourage foreign investment in the 

United States, Congress created an additional employment-based 

immigrant visa category (preference benefit) as part of the Immigration 

Act of 1990, P.L. 101-649, as amended. This category, commonly 

referred to as EB-5, allows immigrant investors to receive conditional 

resident status in the United States for a 2-year period upon the 

investment of $1 million (or $500,000 in targeted employment areas) in 

a U.S. business that creates at least 10 full-time jobs. If the investors 

meet the requirements, they can apply for permanent legal resident 

status. The EB-5 immigrant investor category began in 1992 and is 

administered by the U.S. Citizenship and Immigration Services (USCIS), 

a component of the Department of Homeland Security (DHS). Under 

the authorizing legislation for the EB-5 category, approximately 

10,000 immigrant investor visas may be issued each year.1

The Basic Pilot Program Extension and Expansion Act of 2003 

(P.L. 108-156), mandates that we provide certain information regarding 

the EB-5 category. In accordance with the mandate, this report provides 

information on 

 

1

Under the law, this preference category allots up to 7.1 percent of the worldwide level 

of immigration (approximately 10,000 visas annually) to qualified investors and their 

spouses and children. The allocation is not a target or a goal. See 8 U.S.C. §1153(b)5. 

United States Government Accountability Office

Washington, DC 20548 
Page 2 GAO-05-256 Immigrant Investor Program 

• the level of participation, including (1) the number of individuals 

who have received immigrant investor visas in each year since the 

category’s inception, (2) their country of origin, and (3) the number 

of immigrant investors who have sought U. S. citizenship, and 

• the businesses established by immigrant investors, including (1) the 

types established, (2) their locations and whether they remained in 

the same location, and (3) the number of jobs created. 

To perform our work, we reviewed applicable laws, including the 

Immigration Act of 1990 and the 21st Century Department of Justice 

Appropriations Authorization Act (P.L. 107-273 (2002)), as well as 

studies, analyses, and other relevant literature covering the EB-5 

category. Also, we reviewed USCIS and Department of State policies 

and guidelines related to EB-5. We analyzed State Department data to 

determine the number of visas issued under the EB-5 employment 

category from 1992 through June 2004 as well as the immigrant 

investors’ and their dependents’ countries of origin. USCIS electronic 

databases do not include information on where immigrant investors 

established their businesses, the extent to which the businesses 

remained in the original location, the types of businesses established, 

the number of jobs created, or the number of immigrant investors who 

applied for U.S. citizenship. Therefore, to obtain this information, we 

conducted a manual review of a random probability sample of 90 case 

files. We also interviewed USCIS headquarters officials in Washington, 

D.C., as well as USCIS service center officials in California and Texas to 

obtain information about immigrant investor application processing 

procedures and their opinions on other EB-5 issues. Further, to obtain 

perspectives on the EB-5 category from nongovernmental sources, we 

interviewed four immigration lawyers in the private sector who were 

knowledgeable about the EB-5 application process. We did not 

independently corroborate the opinions provided by USCIS officials 

and immigration lawyers that we interviewed. Our selection of 

immigration lawyers was based primarily on the recommendations of 

the American Immigration Lawyers Association. We conducted our 

work from March 2004 to February 2005 in accordance with generally 

accepted government auditing standards. Appendix I presents more 

details about our objectives, scope, and methodology. 

The number of visas granted under the EB-5 category has been 

considerably less than the approximately 10,000 designated annually by 

the authorizing legislation. According to State Department data, a total 

Results in Brief 
Page 3 GAO-05-256 Immigrant Investor Program 

of 6,024 visas have been issued to alien entrepreneurs and their 

dependents since 1992. The annual number of visas issued peaked at 

1,570 in 1997 and, since then, has declined. Our analysis of USCIS data 

indicates that as of June 2004, an estimated 653 investors (not including 

dependents) had met the EB-5 requirements and received permanent 

legal residency. The USCIS officials and immigration lawyers that 

represent EB-5 participants that we interviewed attribute the low 

participation to a series of factors that led to uncertainty among 

potential investors. These factors include an onerous application 

process; lengthy adjudication periods; and the suspension of processing 

on over 900 EB-5 cases—some of which date to 1995—precipitated by a 

change in USCIS’s interpretation of regulations regarding financial 

qualifications. 2 In 2002, Congress mandated in the 21st Century 

Department of Justice (DOJ) Appropriations Authorization Act 

(P.L. 107-273) that USCIS issue regulations to implement congressional 

directives by March 2003 to address these pending cases. According to 

USCIS officials, they initially drafted the regulations. However, the 

regulations have been under review and revision primarily between 

USCIS and the Department of Homeland Security, Office of General 

Counsel, since March 2003. Many difficult and competing demands 

associated with establishing the new Department of Homeland Security 

and meeting its mission and management challenges were cited by DHS 

as a reason the regulations have not been issued. 

Our analysis indicates that about 83 percent of applicants approved for 

the EB-5 category are from Asia, including Taiwan, South Korea, and 

China. We estimate that about 38 percent of the immigrant investors 

who have met the EB-5 requirements and been approved for permanent 

residence applied for U.S. citizenship, although seeking citizenship is 

not a requirement. 

Immigrant investors invested in a variety of business types that have 

generally remained at their initial locations. The immigrant 

entrepreneurs invested primarily in hotels or motels, manufacturing 

companies, real estate companies, domestic sales companies, farms, 

 

2

At this time, USCIS functions were carried out by the Immigration and Naturalization 

Service (INS), an agency within the Department of Justice. As of March 1, 2003, INS 

ceased to exist, and its functions were transferred to the U.S. Customs and Border 

Protection (CBP) and Immigration and Customs Enforcement (ICE) within the 

Department of Homeland Security’s Directorate of Border and Transportation Security 

as well as USCIS. See Homeland Security Act of 2002, P.L. 107-296 (2002). 
Page 4 GAO-05-256 Immigrant Investor Program 

import/export companies, restaurants, and technology companies. We 

estimate that 41 percent invested in businesses in California. Very few 

investors relocated their businesses to a state other than the one listed 

on the investor’s initial EB-5 application. Specifically, of the 653 

investors who have met the EB-5 requirements and been approved for 

permanent residence, we estimate that 644 (or 99 percent) of the 

businesses remained in the same state. We also estimate that from fiscal 

year 1992 through June 2004, immigrant entrepreneurs who completed 

the EB-5 benefit requirements and attained permanent legal residency, 

invested about $1 billion. 

We could not determine a reliable estimate of the number of jobs 

created by immigrant investors because, during the application review 

process, USCIS adjudicators only ensure that each business created the 

minimum requirement of at least 10 jobs but do not apportion the 

creation of additional jobs between EB-5 investors and non-EB-5 

investors. For example, if there are non-EB-5 investors involved or the 

investment is part of a greater overall business expansion, USCIS 

credits the individual immigrant investor with all the jobs created, 

rather than trying to determine exactly how many jobs are attributable 

to the immigrant investor’s portion of the investment. 

Delay in issuing implementing regulations has left hundreds of visa 

holders in limbo for as long as 10 years, contributing to a negative 

perception of the employment-based category and potentially limiting 

investment in the United States.3

 Therefore, we recommend that the 

Secretary of the Department of Homeland Security finalize and issue 

the regulations necessary to provide final adjudication in these cases. 

In commenting on our recommendation, DHS stated that the 

regulations have been and remain a priority within DHS, they are 

working to resolve complex issues regarding the EB-5 implementing 

regulations, and they are working with the Department of Justice. 

Under the authorizing legislation for EB-5, approximately 10,000 visas 

may be issued each year to investors and their dependents. One 

category sets aside 3,000 visas for investors making investments in 

 

3

According to USCIS, the majority of the investors and their dependents can retain 

conditional resident status while their application for permanent resident status is 

pending, but they have to apply for an extension every year. 

Background 
Page 5 GAO-05-256 Immigrant Investor Program 

targeted employment areas.4 Another category sets aside an additional 

3,000 visas each year for a special pilot program.5

 This visa category is 

for alien entrepreneurs who make qualifying investments in a business 

located within a “regional center.”6 The remaining EB-5 visas are 

available to immigrant investors who do not invest in a targeted area or 

a regional center. Any of the approximately 10,000 immigrant investor 

visas not issued remain unused and do not carry over to subsequent 

years. 

Figure 1 provides an abbreviated description of the application process 

immigrant investors must follow to be approved for the EB-5 category, 

obtain conditional resident status to establish the business, and 

complete the EB-5 requirements to attain permanent resident status. 

While not shown, after 5 years from the date conditional resident status 

is granted, the investor may apply to become a naturalized U.S. citizen.7

 

4

8 U.S.C. 1153(b)(5)(B). Section 8 C.F.R. § 204.6(e) defines a targeted employment area 

as an area that, at the time of the investment, is either a rural area or an area that has 

experienced unemployment of at least 150 percent of the national average rate. 

5

In 1992, P.L. 102-395 required the Secretary of State, together with the Attorney 

General, to establish this pilot program with an original allocation of 300 visas. In 1997, 

Congress expanded the number of permitted visas from 300 to 3,000 per year and in 

2003, extended the program to October 1, 2008. Department of Commerce, Justice, and 

State, the Judiciary, and Related Agencies Appropriations Act of 1998, P.L. 105-119 

(1997) §116 (a); and the Basic Pilot Program Extension and Expansion Act of 2003, P.L. 

108-156, §4(b). 

6

Section 8 C.F.R. § 204.6(e) defines a regional center as any economic unit, public or 

private, that is involved with the promotion of economic growth, including increased 

export sales, improved regional productivity, job creation, and increased domestic 

capital investment. A regional center seeking USCIS approval must submit a proposal 

showing how it plans to focus on a geographical region within the United States and to 

achieve the required growth. 

7

Under the Immigration and Nationality Act, a legal permanent resident who has resided 

continuously in the U.S. for five years is eligible to apply for citizenship. 8 U.S.C. § 1427. 
Page 6 GAO-05-256 Immigrant Investor Program 

Figure 1: EB-5 Application Process 

a

Immigrant investors may choose to immigrate from abroad by applying for a visa at the U.S. 

consulate in their home country. If the U.S. consulate denies the visa, no further action is taken. 

Adjudicators may request additional 

supporting documents, if needed.

In order to be approved for the program, 

immigrant investors submit an 

application (Form I-526, Immigrant 

Petition by Alien Entrepreneur) to the 

appropriate USCIS service center along 

with evidence that

· at least $1 million (or at least $500,000 

in targeted employment areas) from 

lawful sources has been or will be 

invested in the commercial enterprise;

· the commercial enterprise will create at 

least 10 full-time positions for qualified 

employees; 

· the investor will be actively engaged in 

the management of the enterprise; and,

· the investment benefits the U.S. 

economy.

USCIS adjudicators review the application 

and supporting documentation provided 

and make approval and denial decisions. 

Once approved for the program, the 

alien entrepreneur applies for 

conditional residence by submitting 

Form I-485. Conditional residence 

allows the immigrant investor to reside 

in the United States for 2 years. 

Prior to the end of the conditional 

period, the investor must apply for 

permanent residence by submitting 

Form I-829 (Petition by Entrepreneur 

to Remove Conditions) to USCIS 

along with evidence that the

· investor invested the appropriate 

amount of capital in a commercial 

enterprise;

· enterprise and the investor's 

investment was sustained for the 2-

year conditional period; and, 

· enterprise created and sustained 

10 full-time jobs.

The investor is granted 

permanent resident 

status. USCIS does not 

track any further 

progress of the investor 

or the business 

enterprise beyond this 

final approval. 

Adjudicators may request additional 

supporting documents, if needed. 

1

2

5

6

7

3

Alien removal

process begins

End of

process

Application

approved?

Application

approved?

Application

approved?

The immigrant investor's 

conditional status 

is terminated.

8

Application for EB-5 Program Application for conditional resident status Application for permanent resident status

Yes

No

Yes

No Yes

No

Adjudicators may request additional 

supporting documents, if needed. 

USCIS adjudicators review the application 

and supporting documentation provided and 

make approval and denial decisions. 

USCIS adjudicators review the application 

and supporting documentation provided and 

make approval and denial decisions. 

4

Source: GAO analysis of US CIS data.
Page 7 GAO-05-256 Immigrant Investor Program 

Appendix II presents additional details about EB-5 processing 

procedures and the criteria USCIS uses to make approval and denial 

decisions. 

The participation of immigrant investors (and their dependents) has 

been well below the annual EB-5 visa category cap of approximately 

10,000. Our analysis of State Department and USCIS data show that, as 

of June 2004, 6,024 visas have been issued to immigrant investors 

including their dependents and an estimated 653 investors (excluding 

dependents) had met the EB-5 requirements and been approved for 

legal permanent resident status. Most immigrant investors who have 

been approved for the EB-5 category came from Asia. 

According to State Department data, a total of 6,024 visas have been 

issued to immigrant investors and their dependents under the EB-5 

category since its inception in 1992 through fiscal year 2004. 

Approximately 10,000 EB-5 visas per year (potentially 130,000 visas 

through fiscal year 2004) have been authorized to be issued to 

individuals and their dependents if the principal investor agrees to 

make the required investment, establish a business in the United States, 

and create at least 10 full-time jobs. According to USCIS, there is no 

way to determine the number of potential applicants or the number of 

applicants who have applied for the category. Figure 2 shows that the 

number of visas approved under EB-5 since 1992 is a small fraction of 

the approximately 10,000 per year visa allocation set by its authorizing 

legislation. 

EB-5 Participation Is a 

Small Fraction of the 

Visa Allocation 

The Number of Immigrant 

Investors Is Far Fewer 

than the Number of 

Allocated Visas 
Page 8 GAO-05-256 Immigrant Investor Program 

Figure 2: Number of Visas Issued by Year, Fiscal Years 1992 Through 2004 

a

Since decisions for applications are not necessarily rendered the same year they are received; 

the number of visas issued in a year may include applications submitted in prior years. 

USCIS officials and immigration lawyers that represent EB-5 

participants attributed the low participation to a series of factors that 

contributed to uncertainty among potential investors. These factors 

included the suspension of processing of hundreds of EB-5 applications 

in 1998 and the subsequent issuance of several precedent setting 

decisions intended to clarify how adjudicators should interpret EB-5 

regulations. 

USCIS officials cited several possible contributing factors as reasons 

for the low participation and approval rates as follows: 

• Rigorous nature of the EB-5 application process versus other 

employment-based visa applications: According to agency officials, 

many potential immigrants may have other options to achieve lawful 

permanent resident status that are less difficult to qualify for, less 

expensive, and more certain. For example, other employment based 

immigrant visas do not require a substantial investment of money to 

establish a business and hire employees. Also, other employment 

visas, such as those for professionals with advanced degrees or 

priority workers including persons who have a well-documented and 

extraordinary ability in the sciences, arts, education, business, or 

athletics, may be easier for immigrants to obtain because the 

Factors Contributing to 

Low Participation 

USCIS Views 

Total = 6,024

0

500

1,000

1,500

2,000

10,000

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

596

464 548

934

1,570

819

252 231 188 147 78 71 126

Year

Number of visas issueda

Total annual visa allocation per year

Number of visas allocated per year

Source: GAO analysis of State Department data.

The amount of visas issued per year has been 

significantly lower than the amount allocated per year
Page 9 GAO-05-256 Immigrant Investor Program 

immigrant’s employer is responsible for completing the application 

and complying with the applicable USCIS regulations. 

• Lack of expertise among adjudicators: USCIS officials said that 

prior to 1998, EB-5 adjudicators were not sufficiently trained to 

properly adjudicate EB-5 applications, which typically involve 

complex business and tax issues. After the additional guidance 

(discussed below) was issued, USCIS officials changed the EB-5 

training curriculum to provide adjudicators with training that 

addressed the complexities of EB-5 applications and helped to 

ensure that appropriate decisions would be rendered in accordance 

with applicable statutes, regulations, and agency policy. According 

to agency officials, the improved training may have resulted in fewer 

applications being approved and, therefore, contributed to a lower 

approval rate. 

• Uncertainty of the outcome of adjudication: The statute provides 

for a 2-year conditional residence period but does not guarantee 

investors lawful permanent resident status at the end of the period. 

The required investment and employment creation must be 

established to the satisfaction of USCIS prior to approving the 

investor for permanent legal resident status. Potential investors may 

be deterred by the uncertainty that USCIS may determine that they 

did not meet the EB-5 terms. Agency officials said that the 1998 

changes in the USCIS interpretation of the EB-5 regulations 

(discussed below) have contributed to this uncertainty. Further, the 

undetermined status of hundreds of EB-5 applications waiting for 

promulgation of new regulations may have a negative effect on 

attracting new applicants. Also, a history of federal litigation 

prompted by the precedent decisions where the courts have taken 
Page 10 GAO-05-256 Immigrant Investor Program 

various positions may have contributed to uncertainty regarding the 

future interpretation of EB-5 law and regulations.8

• Public awareness and media attention: Publicity regarding EB-5 

(also discussed below) has been negative and may have contributed 

to decreased interest in the EB-5 visa category and a resulting drop 

in the number of alien entrepreneurs applying for 

EB-5. 

All of the immigration lawyers we interviewed said that although 

immigrants still want to participate in the EB-5 category, the suspension 

of adjudications of hundreds of investors’ applications has deterred 

participation. They also cited subjectivity within the adjudication 

process and the length of time it takes for USCIS to adjudicate the 

various petitions as having contributed to the decline in EB-5 

participation. As a result the U.S. is not realizing the full economic 

potential of EB-5. Specifically, these lawyers noted the following: 

• Requirements may be too restrictive: Overly restrictive and 

sometimes ambiguous requirements are a significant deterrent to 

participation by potential immigrant entrepreneurs. The 1998 

decisions made it even harder to obtain approvals of EB-5 

applications and have resulted in investors looking for other 

alternatives, such as other employment-based visa options that are 

not contingent on capital investment and job creation. Further, 

qualifying a person for EB-5 status is one of the most complicated 

subspecialties in immigration law. A sophisticated knowledge of 

corporate, tax, investment, and immigration law are required. In 

 

8

There has been extensive litigation in the courts regarding the government’s denial of 

applications for both participation in the EB-5 category and permanent resident status 

upon completion of the category’s requirements. In R.L. Investment Limited Partners 

and Wanxuan Zou v. INS, 86 F. Supp. 2d 1014 (D.C. Hawaii 2000) (RLILP), affirmed 273 

F.3d 874 (9th Cir. 2001), the court upheld the government’s denial of an application for 

an EB- 5 application for the program that was virtually identical to certain applications 

approved before the issuance of the precedent decisions. In Chang v. U.S., 327 F.3d 911 

(9th Cir. 2003), however, the court held that INS could not automatically apply its more 

restrictive interpretation retroactively to investors who had already received 

conditional resident status and who were trying to have those conditions removed. 

Instead, the court ruled that the agency must allow these investors an opportunity to 

show how such a retroactive application would hurt them. The court noted that the 

immigrant investors in Chang were not similarly situated to the RLILP plaintiffs, 

because, in Chang, prior to the issuance of the precedent decisions, their applications 

for the EB-5 category had already been approved and the investors had made significant 

commitments. 

Immigration Lawyers’ Views 
Page 11 GAO-05-256 Immigrant Investor Program 

many cases it may be more practicable for investors to come to the 

United States through other visa categories or pursue immigrant 

investor programs in other countries such as Australia and Canada. 

• Rigorous documentation requirements: The documentation USCIS 

requires from investors seeking entry through the EB-5 category is 

extensive. Potential investors are repeatedly required by the EB-5 

adjudicators to provide additional evidence, making the process 

more difficult. The process of requesting and receiving additional 

evidence can add up to 4 months’ processing time for each request. 

• Lack of clear guidance: Some parts of the statute governing the 

EB-5 category are subjective and open to adjudicator interpretation. 

For example, one of the EB-5 requirements is that the business must 

“benefit the U.S. economy.” However, the statute provides no 

guidance on what types of investments meet this criterion. Thus, 

adjudicators are generally left to their own judgement as to the 

value, or benefit, of the proposed investment. 

• The lack of timeliness in processing and adjudicating 

applications: The lawyers said that, in their experience, it takes 

from 5 to 7 years for their clients to complete a program that is often 

advertised as a 2-year conditional residency program. 

According to USCIS officials, one factor that has contributed to 

reluctance of aliens to participate in the EB-5 employment category can 

be traced to program changes in 1998. The changes resulted from a 

series of events beginning in 1996 and 1997. During this period State 

Department consular officers and then Immigration and Naturalization 

Service (INS) EB-5 adjudicators began questioning the financial 

arrangements in some EB-5 applications. As a result, the INS General 

Counsel examined a sample of cases exhibiting the questionable 

financial arrangements and on the basis of this review determined that 

hundreds of EB-5 applications that had been approved contained the 

following financial characteristics: 

• The businesses were financed with debt and not equity investments 

in the new business. 

• The immigrant investor was not personally at risk for the required 

investment of money. 

• The full statutory amount of capital was not made available for use 

by the business for employment creation or business operations. 

Precedent-Setting Decisions 
Page 12 GAO-05-256 Immigrant Investor Program 

• The promissory note used to meet the minimum capital requirement 

did not have a fair market value equivalent to the statutorily required 

investment amount. 

• The guaranteed payment on the immigrant investor’s cash 

contribution in the plan was allowed to be used to make payments 

on the promissory notes, resulting in an insufficient infusion of new 

capital into the business. 

In December 1997, the INS General Counsel issued an opinion finding 

that the financial characteristics involving the debt arrangements and 

other mechanisms designed to limit the investors’ risk did not comport 

with the statute and regulations governing EB-5. Further, the General 

Counsel concluded that INS was not bound by its previous decisions in 

adjudicating these EB-5 applications (i.e., Form I-526) and that it could 

revoke previously approved applications containing the business 

arrangements at issue.9

 As a result of this opinion, adjudicators were to 

determine if previously approved EB-5 applications comported with the 

law and identify which applications, if any, should be revoked. Also, the 

INS General Counsel opinion recommended that INS establish 

guidelines for adjudicating applications with the aforementioned 

business arrangements as well as future applications. 

In March 1998, INS suspended EB-5 processing on about 900 cases with 

an approved EB-5 application (i.e., Form I-526) and a pending 

application for permanent resident status (i.e., Form I-829) that 

reflected the business arrangements at issue. The suspension was to 

allow INS to develop guidance on how adjudicators should interpret the 

EB-5 regulations. As part of this process, the Administrative Appeals 

Office (AAO) selected a sample of the applications in question and 

adjudicated them using the INS General Counsel’s legal opinion and 

other case law.10 On the basis of its review of these applications, AAO 

 

9

The opinion concluded that INS failed to understand the true nature of the investment 

plans it reviewed and that it, therefore, misapplied its own statute and regulations. The 

opinion reasoned that the fact that INS had, in the past, favorably adjudicated a number 

of petitions involving the business plans at issue did not, as a matter of law, prevent INS 

from denying future petitions involving such plans. Memorandum, David A. Martin, 

General Counsel, December 19, 1997, reprinted in 75 Interpreter Releases 332, 343, 345 

(March 9, 1998). 

10AAO is the appellate body that considers cases under the appellate jurisdiction of the 

Associate Commissioner for Examinations. As such, AAO can overrule, modify, and 

distinguish a prior precedent. 

Hundreds of Prior Approved 

Applications Have Been on 

Hold for Years 
Page 13 GAO-05-256 Immigrant Investor Program 

determined that the financial arrangements included in hundreds of 

applications did not comport with the statute and EB-5 regulations. 

Therefore, in June and July 1998 AAO issued what has become known 

as “precedent-setting decisions” that clarify how adjudicators should 

interpret EB-5 regulations.11 From this point forward, adjudicators were 

required to follow the new interpretation of the EB-5 regulations as 

described in these decisions when adjudicating EB-5 applications. 

In August 1998, INS removed the hold on application processing and 

EB-5 adjudicators determined that most of the suspended applications 

should be denied. However, according to USCIS officials, the majority 

of the denial letters were never processed and the cases remained 

pending. 

By 2002, those investors whose cases were pending continued to 

remain in conditional resident status waiting for action by USCIS. 

According to USCIS officials, there has been an increase in litigation 

stemming from delays in issuance of the implementing regulations. 

Many of the affected aliens have filed legal actions against the 

department. Further, investors who were affected by the changes 

resulting from the 1998 decisions lobbied Congress for help. In 2002, 

Congress addressed the pending applications through a provision in the 

21st Century Department of Justice Appropriations Authorization Act12

requiring USCIS to implement regulations that would allow those 

immigrant investors whose initial EB-5 application was approved 

between January 1995 and August 1998 to address deficiencies in their 

applications for permanent residence and amend them to comply with 

USCIS’s new interpretation of the EB-5 regulations. Although the 

implementing regulations were to be issued within 120 days of the 

passage of the act (March 2003), as of March 2005, DHS had not issued 

the regulations. 

According to USCIS officials, they initially drafted regulations that 

would allow the department to implement congressional directives in 

the 2002 act. These draft regulations have been under review and 

 

11Under INS regulations, decisions relating to the administration of immigration law 

may be designated as precedents in future proceedings. Precedent decisions are binding 

on all service employees in the administration of the INA. They are to be published and 

made available to the public. 8 C.F.R. § 103.3(c). 

12P.L. 107-273 (2002). 
Page 14 GAO-05-256 Immigrant Investor Program 

revision primarily between USCIS and the Department of Homeland 

Security, Office of General Counsel, since March 2003. A spokesman for 

the DHS Office of General Counsel stated that the size and complexity 

of the government reorganization necessary to establish the new 

Department of Homeland Security and the resulting need to prioritize 

among competing demands with limited staff has delayed work on the 

new EB-5 regulations. Further, the DHS Office of General Counsel said 

that there are outstanding issues regarding the promulgation of the 

regulations but that these issues are considered to be ongoing internal 

department deliberations which they would not discuss. 

Until implementing regulations are established, the 2002 act does not 

allow USCIS to deny any of the applications on hold for permanent 

residency or place any applicant in removal proceedings. As a result, 

according to USCIS officials, some immigrant investors have been in 

the United States for over 10 years without completing the EB-5 

requirements and being granted permanent legal resident status. 

Further, immigration lawyers that we interviewed told us that failure to 

issue the new regulations has deterred potential investors from 

participating and caused hardships for some of the investors forced to 

remain in conditional resident status. For example, to maintain their 

conditional residency in this country, investors who had their cases 

suspended must obtain an extension of their legal resident 

documentation annually (commonly referred to as their green card) 

from USCIS. According to these immigration lawyers, this in itself is not 

an easy process. 

Most EB-5 investors have immigrated from Asia. As table 1 shows, 

39 percent of the EB-5 visas have been issued to individuals from 

Taiwan. Overall, 83 percent of immigrant investor visas were issued to 

individuals from Asia. 

Most Immigrant Investors 

Are from Asia 
Page 15 GAO-05-256 Immigrant Investor Program 

Table 1: Number of EB-5 Visas Issued, by Country of Origin, Fiscal Year 1992 

through 2004 

Country (or geographical 

area) of origina

Number Percentage of total 

Asiab 

Taiwan 2,323 39

South Korea 839 14

China (mainland) 752 12

 Hong Kong Special Administrative 

Region (S.A.R.) 

395 7

 India 130 2

 Japan 66 1

 All other Asia 476 8

Total for Asia 4,981 83

All other countries by geographic area 

Europe 546 9

South America 143 2

Africa 122 2

North/Central Americac 214 4

Australia/New Zealand 18 d 

Total 6,024 100

Source: GAO analysis of Department of State data. 

a

Immigrant visas are numerically limited by category and by country of origin, which in most cases 

is a person’s country of birth rather than his or her current citizenship. 

b

Turkey is included as part of Asia. 

c

North America excludes the United States but includes Canada, Greenland, Mexico, all the 

countries of Central America, and the island countries and dependencies of the Caribbean. 

d

Less than 0.5 percent. 

As previously mentioned, seeking U. S. citizenship is not a requirement 

of the EB-5 category. Also, USCIS does not track the status of 

immigrant investors once they have completed the EB-5 requirements 

and been approved for permanent residence. However, as shown in 

table 2, we estimate that 38 percent of approved immigrant investors 

had applied for U.S. citizenship, 61 percent had not applied, and 

Immigrant Investors May 

or May Not Apply for U.S. 

Citizenship 
Page 16 GAO-05-256 Immigrant Investor Program 

1 percent were ineligible to apply, as of the time of our review.13 Our 

methodology for these estimates is explained in appendix I. 

Table 2: Estimated Number of Immigrant Investors Who Have Sought U.S. 

Citizenship, Fiscal Years 1992 through June 2004 

 

 Estimated 

number 

Estimated 

percentages

Applied for U.S. citizenship 247 38

Did not apply for U.S. citizenship 399 61

Ineligible to apply for U.S. citizenshipa 7 1 

Total 653 100

Source: GAO review of USCIS files. 

a

This estimate results from one case in our sample in which the alien was ineligible to apply for 

U.S. citizenship because she had previously renounced her citizenship. She reentered the United 

States as an immigrant through the EB-5 category. 

Over the life of the EB-5 employment category immigrant investors 

have established a variety of businesses and on the basis of the sample 

of cases we reviewed, we estimate that a total of $1.04 billion was 

invested through 2004 by immigrant investors who have been granted 

permanent residency. Of the estimated 653 investors who have met the 

EB-5 requirements and been approved for permanent residence, most 

maintained their business in the same state during the 2-year 

conditional period, with 41 percent establishing their businesses in 

California. USCIS officials did not have reliable data indicating the total 

number of jobs created solely as a result of investments by EB-5 

participants. 

Hotels and motels make up an estimated 19 percent of all businesses 

created by immigrant investors granted permanent resident status 

(123 of 653 businesses). We classified the various types of businesses 

into 10 broad categories. Table 3 shows the estimated number of 

businesses established in each category. To provide additional insights 

into the types of businesses established under EB-5, we also recorded 

for each broad category, where applicable, the types of products 

 

13All percentage estimates from the sample have been rounded to the nearest percent 

and have margins of error of plus or minus 10 percent unless otherwise noted. 

Immigrant 

Entrepreneurs with 

Permanent Resident 

Status Have Invested 

an Estimated $1 

Billion in a Variety of 

Businesses, Primarily 

in California 

Immigrant Investors 

Established a Variety of 

Businesses by Investing an 

Estimated $1 Billion 
Page 17 GAO-05-256 Immigrant Investor Program 

manufactured, sold, imported or exported, or produced as well as the 

types services offered. 

Table 3: Types and Estimated Number of Businesses Established by Immigrant Investors with Permanent Resident Status, 

Fiscal Years 1992 through June 2004 

Business category Examples of business category components 

Estimated 

number 

Estimated 

percentage

of total

Hotel/motel 123 19

Manufacturing Clothing, cabinets, computer equipment, convertible beds, 

corrugated boxes, food, furniture, health supplements, knit goods, 

rubber and plastics, telephone equipment, textiles, woven bags 

116 18

Real estate Property management, development, construction 94 14

Domestic sales Clothing, airplane parts, artificial turf, granite, new cars, 

pharmaceuticals, toys, hair salons, retail food stores 

65 

10

Farms Almonds, fish, fruit 58 9

Import/export Airplane parts, clothing, gems/jewelry, home appliances, 

household decorator goods, seafood, textiles 

58 9

Restaurants 44 7

Retirement homes 22 3

Technology Computer services, long-distance telephone service provider, 

wireless cable television development 

22 3

Other businesses Car wash, child care center, meat processing plant, nightclub, 

nursing home, security broker 

51 8

Total 653 100

Source: GAO review of USCIS files. 

To provide a measure of the EB-5 category’s benefit to the U.S. 

economy, we obtained information about the dollars invested by 

immigrant investors. On the basis of the case files we reviewed, we 

estimate that the total of investments made by the 653 immigrant 

investors granted permanent resident status from fiscal year 1992 

through June of 2004 is $1.04 billion. Using a 95 percent confidence 

level, we estimate that the investment amount is between $784 million 

and $1.3 billion.14

 

14Additional money was invested by alien entrepreneurs who ultimately did not 

complete the EB-5 benefit process or have yet to have their petition for permanent legal 

resident status approved. We did not obtain investment data on immigrant investors 

who had not met all of the EB-5 requirements at the time of our review. 
Page 18 GAO-05-256 Immigrant Investor Program 

We estimate that 41 percent (265 of 653) of immigrant investors with 

permanent resident status established their businesses in California. 

Table 4 shows the states where approved immigrant investors 

established their businesses as well as our estimate of the number of 

businesses established in each state. 

Table 4: States Where Immigrant Investors Established Business Operations, 

Fiscal Years 1992 Through June 2004 

State 

Estimated

number

Estimated percentage

of total

California 265 41a

Maryland 71 11

Arizona 53 8

Florida 44 7

Virginia 44 7

Washington 35 5

Michigan 26 4

Colorado 18 3

Hawaii 18 3

Nevada 18 3

Georgia 9 1

Minnesota 9 1

Nebraska 9 1

New Jersey 9 1

Texas 9 1

Utah 9 1

Vermont 9 1

Totals 653 100

Source: GAO review of USCIS files. 

Note: Estimated numbers and percentages may not total because of rounding. 

a

The confidence interval in this case exceeds plus or minus 10 percent and is 30 percent to 

51 percent. 

We also found that few immigrant investors with permanent resident 

status relocated their businesses during the 2-year conditional period. 

Of the 653 approved investors, we estimate that 99 percent, or 

644, maintained business operations in the same state throughout the 

2-year conditional period. Specifically, we estimate that 

Immigrant Investors with 

Permanent Resident Status 

Established Business 

Operations Predominantly 

in California, and the 

Businesses Seldom 

Relocated 
Page 19 GAO-05-256 Immigrant Investor Program 

• 79 percent, or 515, of the immigrant investors’ businesses remained 

in same city and state;15

• 20 percent, or 129, of the immigrant investors’ businesses remained 

in the same state, but moved to a new city;16 and 

• 1 percent, or 9, of the immigrant investors’ businesses moved to a 

new city and state. 

We could not determine how many jobs immigrant investors have 

established because of the way USCIS credits the number of jobs 

created by an investor’s business. During the adjudication process, 

USCIS adjudicators ensure that each business creates the minimum 

requirement of at least 10 full-time jobs. But if there are non-EB-5 

investors involved or the investment is part of a greater overall business 

expansion, USCIS credits the single EB-5 investor with the total of all 

jobs created even though many of the jobs are not the result of his 

portion of the investment.17 In one such example, USCIS credited a 

single immigrant investor with creating 1,143 jobs based on a 

$1.5 million investment. While this investment did not create all 

1,143 jobs, for adjudicative purposes, when the immigrant investor is 

the only one seeking the immigration benefit, all jobs are attributed to 

that investor, even if the capital of others is fueling the enterprise. In 

this example, the immigrant investor’s capital infusion was only a small 

part of a multimillion dollar expansion of an existing business that 

involved multiple franchises and other non-EB-5 investors. 

At the time the 1998 precedent decisions were published, more than 

900 EB-5 participants’ applications were placed on hold, resulting in 

immigrant investors residing in the United States for as long as 10 years 

 

15As a result of data limitations, the confidence interval for this estimate exceeds plus or 

minus 10 percent and is 68 percent to 88 percent. 

16As a result of data limitations, the confidence interval for this estimate exceeds plus or 

minus 10 percent and is 11 percent to 31 percent. 

178 C.F.R. 204.6(g)(2) states that the number of full-time positions created for qualifying 

employees shall be allocated solely to those alien entrepreneurs who have used the 

establishment of the new commercial enterprise as the basis of a petition on Form I526. No allocation need be made among persons not seeking classification under 

section 203(b)(5) of the act or among non-natural persons (e.g., corporations), either 

foreign or domestic. 

The Number of Jobs 

Created by Immigrant 

Investors Could Not Be 

Estimated 

Conclusions 
Page 20 GAO-05-256 Immigrant Investor Program 

under conditional residency status. According to immigration lawyers, 

the failure to issue the new regulations is creating hardships for the 

investors whose cases are on hold and has been a deterrent to new 

investors, thereby limiting the economic benefit to the United States. 

USCIS cannot act on the pending applications for permanent resident 

status or place any of those applicants in removal proceedings until the 

required regulations are promulgated. Despite a congressional mandate 

in 2002 that USCIS and DHS provide implementing regulations by 

March 2003 to address the pending applications, the regulations have 

not been issued. Drafted regulations have been under review between 

USCIS and DHS since March 2003. DHS officials stated that the 

transformations of legacy agencies into its department and related 

management and mission demands have contributed to the delay in 

issuing the regulations. However, they could not provide any assurance 

when the regulations would be issued. 

Given the undetermined status and potential hardships imposed on 

hundreds of EB-5 applicants awaiting the promulgation of 

implementing regulations and that 2 years have passed since Congress 

required DHS to issue regulations for adjudicating these EB-5 

applications, and to better achieve the economic benefits of the EB-5 

category, we recommend that the Secretary of the Department of 

Homeland Security finalize and issue these regulations. 

We provided the Department of Homeland Security and the Department 

of State with a draft of this report for review and comment. The 

Department of State had no comments on the draft. In commenting on 

our recommendation, DHS stated that the regulations have been, and 

remain, a priority within DHS and that it is working with the 

Department of Justice to resolve complex issues regarding the EB-5 

implementing regulations. 

DHS also identified recent steps taken by USCIS to improve the 

administration of the EB-5 foreign investor program. Steps cited were 

the creation of the Investor and Regional Center Unit and plans to set a 

standard for timeliness in processing EB-5 cases. 

According to DHS, the Investor and Regional Center Unit will establish 

a nationwide and coordinated program and will have oversight for all 

policy and regulation development, field guidance, form design, case 

auditing, and training regarding the EB-5 program. DHS said it believes 

Recommendation 

Agency Comments 

and Our Evaluation 
Page 21 GAO-05-256 Immigrant Investor Program 

this new unit will strengthen and protect the integrity of the program by 

guarding against past abuses and promoting the intent of Congress to 

encourage investment and increase employment within the United 

States. 

DHS said the objective of the timeliness standard is to provide a reliable 

time frame from filing and adjudicating the petition to enter the 

program through to the targeted adjudication of the subsequent petition 

to remove conditions on the investor’s residency. 

DHS referred to the creation of the regional centers as a significant 

change to the EB-5 category. However, the first EB-5 regional center 

was approved in 1993, and the vast majority of regional centers were 

approved prior to 1998. Also, the option for a foreign investor to make a 

reduced investment of $500,000 in a targeted employment area, a rural 

area, or an urban area of less than 20,000 people is not unique to the 

regional centers. Foreign investors in regional centers are credited with 

jobs created directly or indirectly as a result of their investment 

whereas foreign investors in the regular EB-5 process must create at 

least 10 jobs directly in their commercial enterprise. The full text of 

DHS comments are provided in appendix III. 

We are sending copies of this report to interested congressional 

committees and subcommittees. We will also make copies available to 

others on request. In addition, this report will be available at no charge 

on GAO’s Web site at http://www.gao.gov. 

If you or your staff have any questions about this report or wish to 

discuss the matter further, please contact me at (202) 512-8777 or Bill 

Crocker at (202) 512-4533. Other key contributors to this report are 

listed in appendix IV. 

Paul L. Jones 

Director, Homeland Security and Justice 
Appendix I: Objectives, Scope, and 

Methodology 

Page 22 GAO-05-256 Immigrant Investor Program 

As mandated by the Basic Pilot Program Extension and Expansion Act of 

2003 (P.L. 108-156), we reviewed the fifth employment-based visa category 

(EB-5) for immigrant investors that was created in 1992 and is currently 

administered by U.S. Citizenship and Immigration Services (USCIS), a 

component of the Department of Homeland Security.1

 Specifically, this 

report provides information on 

• the level of participation, including (1) the number of individuals who 

have received immigrant investor visas in each year since the EB-5 

category’s inception, (2) their country of origin, and (3) the number of 

immigrant investors who have sought U.S. citizenship, and 

• the businesses established by immigrant investors, including (1) the 

types of commercial enterprises established, (2) the businesses’ 

locations and whether they remained in this location, and (3) the 

number of jobs created by the immigrant investors’ businesses. 

We reviewed applicable laws, including the Immigration Act of 1990 

(P.L. 101-649 (1990)) and the 21st Century Department of Justice 

Appropriations Authorization Act (P.L. 107-273 (2002)), as well as studies, 

analyses, and other relevant literature covering the EB-5 category. Also, 

we reviewed USCIS and Department of State policies and guidelines 

relating to EB-5. 

To obtain information on our objectives, we reviewed a random 

probability sample of 90 approved EB-5 cases (discussed in more detail 

below). We also conducted interviews and site visits with USCIS 

headquarters officials as well as service center officials in California and 

Texas—the two USCIS service centers that process immigrant investor 

applications. Further, to obtain perspectives from nongovernmental 

sources, we interviewed four immigration lawyers in the private sector 

 1

Aliens are allowed to enter the United States under immigrant and nonimmigrant visas. 

Immigrant visas are for those who wish to obtain permanent resident status in the United 

States and are categorized as either family or employment visas. Within each category, 

USCIS established a preference whereby certain visas are processed before others. For 

example, the first priority of employment-based visas (EB-1) refers to those deemed by 

USCIS to be priority workers—that is, a person who has a well-documented and 

extraordinary ability in the sciences, arts, education, business, or athletics. EB-5 refers to 

the fifth employment-based preference category. Nonimmigrant visas are for those aliens 

(such as students or those traveling for business or pleasure) who wish to enter the United 

States on a temporary basis. 

Appendix I: Objectives, Scope, and 

Methodology 

Objectives 

Overview of Our 

Scope and 

Methodology 
Appendix I: Objectives, Scope, and 

Methodology 

Page 23 GAO-05-256 Immigrant Investor Program 

who were knowledgeable about the EB-5 category. We did not 

independently corroborate all of the opinions provided by USCIS officials 

and immigration lawyers that we interviewed. Our selection of 

immigration lawyers was based primarily on the recommendations of the 

American Immigration Lawyers Association. 

More details about the scope and methodology of our work are presented 

in the following sections. 

USCIS’s Computer Linked Application Information Management System 

(CLAIMS), the initial source of data entry for information from EB-5 

applications, has a documented history of unreliability.2

 Therefore, we 

obtained information on the number of immigrant investor visas and 

country of origin from an alternative source—the Department of State’s 

Immigrant Visa Allocation Management System (IVAMS). The State 

Department is required by statute to maintain a complete, current, and 

accurate accounting of the number and origin of aliens within all visa 

categories. 

We obtained State Department data to determine the number of visas 

issued (to both alien entrepreneurs and their dependents) under the 

EB-5 category by year since the its inception in 1992 through fiscal year 

2004. We also analyzed the data by the country of origin to determine the 

countries with the most visas issued. 

Because reliable data for addressing these objectives were not available in 

electronic format from either USCIS or the State Department, we 

conducted a file review of EB-5 cases that had been approved for 

permanent residence. Because of the labor-intensive nature of the case file 

review, it was not feasible to individually review the files for all approved 

immigrant investors since the EB-5 category’s inception in 1992. As a basis 

for selecting a sample, we obtained from USCIS an electronic list of all 

EB-5 participants who have received permanent residence approval since 

 2

GAO, Homeland Security: Risks Facing Key Border and Transportation Security 

Program Need to Be Addressed, GAO-03-1083 (Washington, D.C.: Sept. 19, 2003); 

Homeland Security: INS Cannot Locate Many Aliens because It Lacks Reliable Address 

Information, GAO-03-188 (Washington, D.C.: Nov. 21, 2002); and Immigration Benefits: 

Several Factors Impede Timeliness of Application Processing, GAO-01-488 (Washington, 

D.C.: May 4, 2001). 

Number of Immigrant 

Investors and Country 

of Origin 

Immigrant Investors 

and Their Businesses 
Appendix I: Objectives, Scope, and 

Methodology 

Page 24 GAO-05-256 Immigrant Investor Program 

the category’s inception in 1992 and selected a simple random probability 

sample from these approved applicants. We identified the sample cases 

from the agency’s Marriage Fraud Amendment System (MFAS)—an 

electronic database used to manage and process EB-5 applications for 

permanent residence.3

 MFAS tracks EB-5 participants by name, file 

number, home address, and other information. 

At the time of our sample selection of case files, the MFAS database 

reflected 1,893 EB-5 cases. Of these, according to USCIS data, 804 had an 

approved application for permanent legal resident status (Form I-829). 

Another 866 EB-5 cases were shown to have applications for permanent 

legal residency in pending status. The remaining 223 cases were primarily 

shown to be denied, closed, or otherwise terminated. 

We planned to draw our sample from the population of 804 approved case 

files. An initial review of the data showed that 93 files belonged to 

dependents, so we eliminated these files from consideration leaving a total 

population of 711 approved immigrant investors. Of the 711 approved 

investors, we randomly selected a probability sample of 111 case files for 

review. 

The physical files are not maintained in one location. Some files may be at 

the Texas or California service centers, while others may be located at one 

of the 33 USCIS district offices across the country, while still others may 

be located at the USCIS records storage facility in Missouri. Therefore, 

USCIS officials agreed to locate and retrieve the files we randomly 

selected as our sample and ship them to the Texas Service Center for our 

review. In examining the files as they were retrieved, still more files that 

the USCIS database showed were investors were actually dependents of 

investors. 

From our probability sample of 111 immigrant investor files, we identified 

8 ineligible files (4 of these files belonged to dependents and 4 did not 

contain a Form I-829). From the remaining 103 files in the sample, we 

obtained 90 usable files. This represented an overall response rate of 

87 percent. USCIS was not able to provide the remaining 13 files during 

the course of our fieldwork. We were able to get information from all 

 3

According to USCIS officials, the Marriage Fraud Amendment System is used to process 

EB-5 applications because, like those immigrating upon marriage, EB-5 participants must 

undergo a conditional period prior to being granted permanent residence status. 
Appendix I: Objectives, Scope, and 

Methodology 

Page 25 GAO-05-256 Immigrant Investor Program 

90 usable files on most of the items we measured. For some items, we 

were not able to get information from a small proportion of the 90 usable 

files. In conducting our analysis, we assumed that missing information 

would be similar to information we obtained on the items we measured. 

Our estimates may be biased to the extent that the information differs. The 

response rates to individual items varied among items. Considering the 

error rate in the MFAS database regarding the proportion of files that were 

actually dependents and not investors, we estimated that the total 

population of approved immigrant investors is approximately 653. 

With our probability sample, each member of the population had an equal 

and nonzero probability of being selected. Each sampled application was 

subsequently weighted in the analysis to account for selection 

probabilities and nonresponse. Because we followed a probability 

procedure based on random selections, our sample is only one of a large 

number of samples that we might have drawn. Since each sample could 

have provided different estimates, we express our confidence in the 

precision of our particular sample’s results as a 95 percent confidence 

interval. This is the interval that would contain the actual population value 

for 95 percent of the samples we could have drawn. As a result, we are 

95 percent confident that each of the confidence intervals in this report 

will include the true values in the sample population. 

All percentage estimates from the sample have been rounded to the 

nearest percent and have margins of error of plus or minus 10 percent 

unless otherwise noted. The 95 percent confidence interval for the 

estimated total of $1.04 billion invested ranges from $784 million to 

$1.3 billion. 

We used a data collection instrument in our file review to record 

information from the following USCIS forms filed by the EB-5 applicants: 

• Form I-526 (Immigrant Petition by Alien Entrepreneur) is an 

application submitted to USCIS by an entrepreneur who is applying for 

the EB-5 category. 

• Form I-485 (Application to Register Permanent Residence or Adjust 

Status) is an application submitted to USCIS by an immigrant who is 

residing in the United States and who wishes to obtain permanent 

resident status. If USCIS approves this form, the immigrant is issued a 

conditional green card. In the case of the EB-5 category, USCIS places 

a 2-year condition on the resident status to give the investor sufficient 
Appendix I: Objectives, Scope, and 

Methodology 

Page 26 GAO-05-256 Immigrant Investor Program 

time to establish his business in accordance with the EB-5 

requirements. 

• Form I-829 (Petition by Entrepreneur to Remove Conditions) is 

submitted to USCIS by a conditional resident who obtained such status 

through the EB-5 category and who wishes to apply for permanent 

resident status as a result of satisfying all the EB-5 requirements. 

• Form N-400 (Application for Naturalization) is an application submitted 

by immigrants who wish to become U.S. citizens. 

For a small proportion of the 90 case files, some data items were not filled 

in. In those few cases we assumed that the missing data, if filled in, would 

be proportional to similar data available in the universe of case files. 

Therefore, our estimates may be biased to the extent that the actual data, 

if available, may have differed. 

Where immigrant investors established their businesses and whether the 

businesses remained in these localities was determined from the business 

addresses listed on two forms that applicants file during the EB-5 process. 

We recorded the city and state of the business at (1) the time the applicant 

applied for the EB-5 category using the Form I-526 and (2) the time the 

applicant applied for permanent residence using the Form I-829. Using 

these business addresses, we determined the cities and states where 

applicants established their businesses when they applied for EB-5 status 

and whether the applicants’ businesses remained in these locations while 

completing the EB-5 requirements. Our analysis is limited by the fact that 

this conditional period typically lasts 2 years and does not cover the time 

period after immigrants have been approved for permanent residency. 

Using this information, we statistically projected the tendency of all 

businesses established by EB-5 applicants to remain in their original 

locations. 

We determined the types of commercial enterprises established, the 

dollars invested, and the number of jobs created based on the information 

supplied by applicants on Form I-829 (Petition by Entrepreneur to Remove 

Conditions) and various supporting documents (such as bank statements, 

federal or state income tax returns, quarterly tax statements, payroll 

records, and employment tax documents). 

Where Immigrant 

Investors Established 

Business Operations and 

whether the Business 

Remained in That Location 

Types of Commercial 

Enterprises Established, 

Investment Amounts, and 

Number of Jobs Created 
Appendix I: Objectives, Scope, and 

Methodology 

Page 27 GAO-05-256 Immigrant Investor Program 

USCIS computerized systems (CLAIMS) had data on the number of 

EB-5 applicants who have been approved for permanent U.S. citizenship. 

However, as mentioned previously, information in the CLAIMS database 

was not always accurate. Therefore, during our file review, we determined 

if applicants sought U.S. citizenship by the presence of a Form N-400 

(Application for Naturalization) in the file and whether this application 

was approved by USCIS. We statistically projected these results. 

To determine how immigrant investor visa applications were processed, 

we interviewed USCIS managers and EB-5 adjudicators; reviewed relevant 

statutes, policy guidance, and training manuals; and visited the USCIS 

service centers in California and Texas. During the site visits, we paid 

particular attention to differences, if any, between the two service centers 

regarding processing procedures and the criteria used for approvals and 

denials. 

To obtain perspectives on the EB-5 category from nongovernmental 

sources, we interviewed four immigration lawyers in the private sector 

who were knowledgeable about EB-5 application process. Our selection of 

interviewees was based primarily on the recommendations of the 

American Immigration Lawyers Association. Because we interviewed a 

nonprobability sample of immigration lawyers, the views and opinions of 

these lawyers cannot be regarded as representative of the views and 

opinions of all immigration lawyers. 

To assess the reliability of State Department data on the number of 

individuals who have received visas under the Immigrant Investor 

Program and their country of origin, we interviewed knowledgeable 

agency officials about the data and electronically tested the data to 

identify obvious problems with completeness or accuracy. On the basis of 

these steps, we determined that the State Department visa data were 

sufficiently reliable for the purposes of this report. 

To examine the reliability of the data contained in USCIS EB-5 files, we 

conducted independent checks of selected data from 20 immigrant 

investor files that were pending USCIS review by undertaking online 

Number of Immigrant 

Investors Who Have 

Sought Permanent U.S. 

Citizenship 

Processing of 

Immigrant Investor 

Visa Applications at 

the Two USCIS 

Service Centers and 

Criteria Used for 

Approvals and 

Denials 

Views of Immigration 

Lawyers 

Data Reliability 
Appendix I: Objectives, Scope, and 

Methodology 

Page 28 GAO-05-256 Immigrant Investor Program 

searches on the respective firms in the Lexis-Nexis and Dunn and 

Bradstreet databases. We also visited four of the investor businesses and 

interviewed the alien entrepreneurs who had met the EB-5 requirements 

and been approved for permanent residence to verify the veracity of the 

information contained in the files that we used in the report. We also 

interviewed knowledgeable agency officials about the data. To ensure 

accurate recording and entry of the EB-5 file data into our database, each 

entry was double-checked against the relevant case file by an analyst who 

had not initially entered the data. We determined that the EB-5 case file 

data were sufficiently reliable for the purposes of this report. 
Appendix II: Immigrant Investor Program 

Application Process 

Page 29 GAO-05-256 Immigrant Investor Program 

To participate in the Immigrant Investor Program—or EB-5 employment 

category----an individual must seek and obtain approval from the U.S. 

Citizenship and Immigration Services.1

 Participation in the program occurs 

after approval at three major steps in the application process. 

• First, the immigrant investor applies for the EB-5 category (while either 

residing abroad or residing in the United States) by submitting USCIS 

Form I-526. 

• Second, the immigrant investor applies for conditional resident status 

after the Form I-526 is approved either by submitting a Form I-485 or 

by filing paperwork with the State Department. After obtaining 

conditional resident status, immigrant investors have a 2-year 

probationary period to establish their business and meet the EB-5 

requirements. 

• Finally, the immigrant investor applies for permanent resident status by 

submitting USCIS Form I-829. When eligible, immigrant investors may 

apply for U. S. citizenship. However, this is not a requirement of the 

program. 

Figure 3 shows the application process for the Immigrant Investor 

Program. 

 1

Aliens are allowed to enter the United States under immigrant and nonimmigrant visas. 

Immigrant visas are for those who wish to obtain permanent resident status in the United 

States and are categorized as either family or employment visas. Within each category, 

USCIS established a preference whereby certain visas are processed before others. For 

example, the first priority of employment-based visas (EB-1) refers to those deemed by 

USCIS to be priority workers—that is, a person who has a well-documented and 

extraordinary ability in the sciences, arts, education, business, or athletics. EB-5 refers to 

the fifth employment-based preference category. Nonimmigrant visas are for those aliens 

(such as students or those traveling for business or pleasure) who wish to enter the United 

States on a temporary basis. 

Appendix II: Immigrant Investor Program 

Application Process 
Appendix II: Immigrant Investor Program 

Application Process 

Page 30 GAO-05-256 Immigrant Investor Program 

Figure 3: EB-5 Application Processing Flow 

End for 

denied 

petitions

Alien submits 

Form I-526 and 

supporting documents 

to USCIS service center

Does 

the alien 

submit 

Form I-290B

to USCIS 

service 

center?

No

File to 

storage

Form I-290B 

dismissed 

(most petitions)

USCIS EB-5 adjudicator forwards

Form I-290B, Form I-526, 

and supporting documents to

USCIS Administrative

Appeals Office (AAO)

Yes

USCIS 

AAO 

adjudicator 

reviews documentation 

and dismisses, rejects, 

remands, or 

sustains the 

appeala

Alien may start 

process again by 

filing a new 

application

Form I-290B 

 remanded to 

service center (rare)

Form I-290B 

 sustained (rare)

Start

Form I-485 

denied 

(rare)

I-485 

adjudicator 

reviews all

documentation and

makes approval,

denial, or referral 

decision

Form I-485 referred 

to district office for 

interview (rare)

USCIS 

district 

office adjudicator 

interviews petitioner 

and makes approval 

or denial 

decision

Form I-485 

denied

Form I-485 

approved 

(most petitions)

On 

Form I-526, 

alien chooses 

processing 

location

Alien submits 

Form I-485 and 

supporting documents 

to USCIS service center

Form I-485 

approved

Alien chooses to 

apply for an immigrant 

visa abroad

Alien chooses to 

adjust status in the 

United Statesb

USCIS

EB-5 

adjudicator 

reviews all

documentation and

makes approval 

or denial 

decision

Form I-526 

denied

Form I-526 

approved

Form I-290B 

rejected for 

untimely filing 

(rare)

Process begins again 

with USCIS EB-5 

adjudicator reviewing

the petition and

approving or denying it

A

B

C

Source: GAO analysis of USCIS and Department of State data.

D
Appendix II: Immigrant Investor Program 

Application Process 

Page 31 GAO-05-256 Immigrant Investor Program 

Legend of USCIS forms: 

Form I-526 (Immigrant Petition by Alien Entrepreneur) 

Form I-485 (Application to Register Permanent Residence or Adjust Status) 

Form I-829 (Petition by Entrepreneur to Remove Conditions) 

USCIS issues 

Form I-551 to alien

Alien’s residence 

status is terminated.

USCIS begins 

removal proceedings

USCIS EB-5 

adjudicator forwards 

Form I-526 to the 

State Department 

for processingc

Consular officer issues 

sealed visa packet to 

alien. Alien enters the 

United States to begin 

EB-5 investment

2 years

pass

Does 

the alien 

submit Form 

I-829?

Alien’s residence 

status is terminated. 

USCIS issues 

notice to appear. 

Removal process 

begins

No

Yes

Alien submits 

Form I-829 and 

supporting documents 

to USCIS service center

USCIS 

EB-5 

adjudicator reviews

documentation and

makes approval

or denial

decision

USCIS EB-5 adjudicator

prepares a memorandum of 

recommendation of denial and 

forwards it to the district 

with jurisdiction over the alien’s 

place of residence

Form I-829 

denied

District office 

prepares a denial 

letter and notice to 

appear and mails 

them to the alien

Conditions are removed

from the alien’s green card. 

Alien is a lawful permanent 

resident with no further

obligation to the EB-5

Program. USCIS no longer

tracks the immigrantd

Five years from 

 the Form I-485 approval 

date, a lawful permanent 

resident can apply to 

become a naturalized 

United States citizen

Form I-829 

approved

To

removal

process

To

removal

process

A

B

C

State sends visa 

application 

package to alien, who 

completes package 

and is interviewed by 

consular officer 

in country of residence

Consular 

officer 

approves or 

denies 

the visa

Process 

ends

Visa denied 

(rare)

Visa 

approved 

(most)

D
Appendix II: Immigrant Investor Program 

Application Process 

Page 32 GAO-05-256 Immigrant Investor Program 

Form I-290B (Notice of Appeal to the Administrative Appeals Office) 

Form I-551 (Alien Registration Card) 

a

The Administrative Appeals Office adjudicator can deny (dismiss) the appeal, approve (sustain) the 

appeal by overturning the service center’s decision, return (remand) the appeal to the service center if 

new issues surface during the appeal review, or reject the appeal if it is not submitted by the deadline. 

b

Adjustment of status refers to the USCIS procedure allowing individuals in the United States to apply 

for permanent residence by filing Form I-485. 

c

The Department of State’s National Visa Center is the central processing point for immigrant visas 

issued abroad. 

d

Lawful permanent residents are immigrants who are legally allowed to reside permanently in the 

United States. 

Processing of immigrant investor applications occurs at two of USCIS’s 

service centers—the California Service Center, located in Laguna Niguel, 

California, and the Texas Service Center, located in Dallas, Texas. 

Adjudicators review the pertinent forms and make approval and denial 

decisions at each step in the process. We found that both the California 

and Texas service centers use the same processing procedures and review 

criteria when reviewing immigrant investor applications. The following 

narrative provides more detail on the information adjudicators consider 

when reviewing EB-5 applications. 

The initial application Form I-526 must be accompanied with additional 

documentation supporting (1) the business proposal, (2) the investment of 

money, (3) the number of full-time jobs to be created, and (4) the 

applicant’s management role in the business. 

• Business proposal—The application should clearly outline and 

describe the type of business, where it is to be located, how it is to be 

financed, the investor’s banking relationships, and information about 

the business (e.g., its customer base, number of employees, and source 

of inventory or raw materials). Although the immigrant investor is not 

required to submit specific supporting documents, USCIS officers will 

likely require a comprehensive business plan or other documents 

outlining the business proposal with Form I-526. Also, if the business 

already exists, articles of incorporation, a set of audited financial 

statements, or, if in the proposal stage, pro forma financial statements 

should be part of the proposal package. 

Immigrant Investors’ 

Initial Application 
Appendix II: Immigrant Investor Program 

Application Process 

Page 33 GAO-05-256 Immigrant Investor Program 

• Investment of money—Documents supporting the investment must 

show evidence that the investor has the funds to meet the program’s 

requirement, $1 million (or $500,000 for investment in targeted 

employment areas).2

 Speaking anecdotally, an adjudicator said this 

requirement is often the weakest part of the proposal. The documents 

need to show the source of the funds and that the immigrant investor is 

personally at risk for the money. In addition, the investor must show 

that the money is from legitimate sources, such as a lending institution. 

Investors may also be expected to provide copies of past income tax 

returns, including tax returns from their country of origin, to show 

their history of financial resources. Other documents supporting this 

section of the proposal would include personal bank statements; sales 

documents if, for example, the money was being obtained from the sale 

of other property; documents showing the transfer of money; and 

letters of reference from financial institutions. An officer noted that 

many of the applications he sees do not adequately document the 

investment criterion. For example, many investors find it difficult or 

are unwilling to show the source of funds. Also, some immigrant 

investors structure the financing arrangements so that the financial risk 

is to the business and not the immigrant investor himself. Finally, some 

immigrant investors fail to show investment or proposed investment of 

the required amount of funds. 

• Creation of jobs—Immigrant investors must document that the 

proposed business venture will generate at least 10 full-time jobs. 

Current regulations allow for job sharing. However, the number of fulltime positions must still equal 10. If the business is operating at the 

time the application is submitted, the immigrant investor should 

provide documentary evidence of employment with submission of 

payroll records, state employment records, and copies of Internal 

Revenue Service Form I-9, Employment Eligibility Verification, for each 

employee. 

• Applicant’s role in the business—Immigrant investors must be actively 

involved in managing their businesses. Documentation proving this role 

would include, for example, copies of board minutes appointing the 

immigrant investor to a management position, copies of stock 

certificates, copies of tax records, or copies of articles of 

incorporation. 

 2

Section 8 C.F.R. § 204.6(e) defines a targeted employment area as an area that, at the time 

of the investment, is either a rural area or an area that has experienced unemployment of at 

least 150 percent of the national average rate. 
Appendix II: Immigrant Investor Program 

Application Process 

Page 34 GAO-05-256 Immigrant Investor Program 

According to USCIS officials, because of the wide differences in the types 

and sizes of businesses involved, there is no single checklist or procedure 

to follow in reviewing petitions. However, as noted above, adjudicators 

stressed that the review of the application focuses on a feasible plan for 

the business, the immigrant investor’s investment in the business meeting 

the required dollar amount, the creation of the required number of jobs, 

and the immigrant investor’s role in the management of the business. A 

significant part of the training for adjudicators for reviewing petitions for 

this program centers on knowledge of business principles. 

Throughout the application review process, if deficiencies in the petition 

or supporting documents are noted, the adjudicator summarizes them in a 

memo, a request for evidence (RFE), which is sent to the investor after the 

initial review is completed. The immigrant investor is granted 12 weeks 

plus 30 days to respond to the RFE. While waiting for the response, the 

case is placed on hold. Once the RFE is returned to USCIS with the 

information needed, the adjudicator completes the review of the petition. 

According to USCIS officials we interviewed, most Forms I-526 require 

that an RFE be sent to the investor. 

If an application is to be denied, the adjudicator prepares a letter (signed 

by the service center director) describing the reason for denial and mails it 

to the investor. The letter details the specific reasons for the denial 

decision and cites the applicable sections of 8 C.F.R. § 204.6 (the 

regulations governing adjudications of Form I-526) that the investor’s 

petition violated. 

If the immigrant investor’s application is denied, the investor may appeal 

the decision by filing Form I-290B, Notice of Appeal to the Administrative 

Appeals Office, to the service center that made the unfavorable decision. 

The appeal is forwarded to the AAO at USCIS headquarters for review. 

AAO adjudicators use the same criteria when reviewing immigrant 

investor applications as those used by service center adjudicators. The 

AAO unit may approve, deny, or remand the case to the service center, or 

reject the case if the appeal is filed untimely. If the appeal is denied, there 

are no further appeal rights within USCIS. The only remaining appeal 

option for the immigrant investor is through the U.S. court system. If the 

appeal is remanded, the AAO directs the service center adjudicator to 

review the case again. The remanded case would be reviewed again 

following the same procedures as if it were initially received. 

If the immigrant investor application is approved, the Form I-526 allows 

the immigrant investor to indicate his preferred option for applying for a 
Appendix II: Immigrant Investor Program 

Application Process 

Page 35 GAO-05-256 Immigrant Investor Program 

conditional 2-year visa. One option is applicable if the immigrant investor 

is already in the United States under some other legal status. In this case, 

the immigrant investor may apply for “Adjustment of Status,” with 

submission of Form I-485. The second option, consular processing, is 

available if the immigrant investor applied from abroad or chooses to go 

abroad and obtain a visa from the State Department. 

As previously mentioned, immigrant investors can choose how they wish 

to obtain their conditional resident status either by completing Form 

I-485 and submitting it to USCIS or by completing a State Department visa 

application at a U.S. consulate abroad. 

After the immigrant investor application is approved, the immigrant 

investor submits Form I-485 and supporting documents to the applicable 

USCIS service center. This procedure allows an eligible applicant to 

become a lawful permanent resident of the United States without having 

to go abroad and apply for an immigrant visa. The application process for 

Form I-485 is not exclusive to the Immigrant Investor Program because it 

is used to apply for adjustment of status under all types of visas. 

The adjudicator in reviewing the Form I-485 and accompanying 

documentation (e.g., medical records, biographical information, the 

Federal Bureau of Investigation background check results, and the 

Form I 526, in the case of immigrant investors) may require an interview 

prior to application approval or denial. An adjudicator may request an 

interview for reasons such as evidence of criminal activity or unlawful 

residence status. USCIS policy requires that district offices handle all faceto-face contact, so these cases are referred to the USCIS district office 

with jurisdiction over the area where the investor applicant resides. After 

the interview, the district office makes a determination to approve or deny 

the Form I-485. If the Form I-485 is denied, the process is terminated and 

alien removal proceedings begin. If Form I-485 is approved, the investor is 

issued a conditional Form I-551, Alien Registration Card, which allows the 

investor 2 years’ conditional residence to establish the business and meet 

the EB-5 requirements. 

Throughout the review process, if deficiencies in the petition or 

supporting documents are noted, the adjudicator summarizes these 

questions in a memo, an RFE that he sends to the immigrant investor. The 

immigrant investor is granted 12 weeks plus 30 days to respond to the 

RFE. While waiting for a response, the case is placed on hold. Once USCIS 

Application for 

Conditional Resident 

Status 

Form I-485 Processing 
Appendix II: Immigrant Investor Program 

Application Process 

Page 36 GAO-05-256 Immigrant Investor Program 

receives the response to the RFE, the adjudicator finalizes the review and 

makes the approval, denial, or referral decision. 

Investors who choose to apply for an immigrant visa abroad use consular 

processing. With consular processing, the investor does not submit an I485. Under this procedure, the State Department forwards a visa 

application to the immigrant investor, who completes the application and 

submits it to the U.S. consular office in the country of residence. A U. S. 

consular officer interviews the immigrant investor and determines 

whether to approve or deny the application. If the application is denied, 

the process is terminated and the immigrant investor is not allowed to 

enter the United States. If the visa is approved, the investor is issued travel 

documents that are presented to U. S. immigration authorities upon arrival 

in the United States. 

With approval of a conditional visa (either with an approved Form I-485 or 

through consular processing), the immigrant investor is granted 2 years of 

conditional residency. During the conditional period, immigrant investors 

are expected to initiate their business venture (if they have not already 

done so) and meet the expectations set out in their approved Form I-526. 

Within 90 days immediately preceding the second anniversary of the date 

that the immigrant investor was granted conditional status, the investor is 

to submit Form I-829. Otherwise, if immigrant investors do not file the 

application within the required time period, they will lose their conditional 

status, and removal proceedings will begin requiring the immigrant to 

leave the United States. 

With the petition to remove conditions, the applicant must provide 

evidence that the enterprise met the terms of the originally approved Form 

I-526. Filing this application extends the investor’s conditional status for 

1 year while the petition is processed. The Form I-829 must be 

accompanied by evidence that the immigrant investor made (or is in the 

process of making) the required investment and created (or will create 

within a reasonable time) 10 full-time jobs. The immigrant investor must 

also show that these actions were sustained during the 2-year conditional 

period. This evidence should 

• verify that the investor invested or was actively in the process of 

investing the required capital (either $1 million or $500,000) in a 

commercial enterprise; 

Consular Processing 

Application to Change 

Conditional 

Residency Status to 

Permanent Residency 

Status 
Appendix II: Immigrant Investor Program 

Application Process 

Page 37 GAO-05-256 Immigrant Investor Program 

• show that the investor sustained the enterprise and the investment in 

the business throughout the period of conditional permanent 

residence; and 

• verify the number of full-time employees at the beginning of the 

investment and at present. 

The immigrant investor should include other available documentation if it 

is relevant to the commercial enterprise. 

Throughout the review process, if deficiencies in the petition or 

supporting documents are noted, the adjudicator summarizes these 

questions in an RFE that he sends to the immigrant investor. The 

immigrant investor is granted 12 weeks plus 30 days to respond to the 

RFE. Once the USCIS receives the response to the RFE, the adjudicator 

finalizes the review and approves or denies the application. According to 

USCIS officials we interviewed, most Form I-829s require that an RFE be 

sent to the immigrant investor. 

If the adjudicator determines that the case should be denied, a 

memorandum of recommendation of denial is sent to the USCIS district 

office with jurisdiction over the immigrant investor’s residence. The 

memorandum is a detailed description of why the adjudicator believes that 

the petition should be denied. The memorandum details the specific 

reasons the petition should be denied and cites the applicable sections of 

8 C.F.R. § 216.6 (the regulations governing adjudications of Form I-829) 

that the investor’s petition violated. 

Once the district receives the memorandum of recommendation of denial, 

a district office adjudicator prepares the denial letter (based on the 

memorandum), which is signed by the district director. Once the 

immigrant investor receives the letter, removal proceedings begin. The 

immigrant investor may appeal the denial before the immigration judge 

who presides over the investor’s removal proceedings. If the immigration 

judge does not overturn the USCIS decision, the immigrant investor’s only 

other appeal option is through the U.S. court system. If the adjudicator 

approves Form I-829, the immigrant investor is granted permanent 

resident status, indicating the immigrant investor is a lawful permanent 

resident with no further obligations under EB-5. USCIS no longer tracks 

the immigrant investor after he or she becomes a lawful permanent 

resident. 
Appendix II: Immigrant Investor Program 

Application Process 

Page 38 GAO-05-256 Immigrant Investor Program 

Five years from the date of approval of the Form I-485 or the date the 

investor entered the United States (if the investor chose consular 

processing), the immigrant investor is eligible to apply for citizenship if the 

Form I-829 is approved. If the investor wants to become a naturalized U.S. 

citizen, a Form N-400, is submitted to USCIS, and if it is approved, the 

immigrant investor is granted citizenship. Immigrant investors are not 

required to apply for citizenship. 

Application for 

U.S. Citizenship 
Appendix III: Comments from the Department 

of Homeland Security 

Page 39 GAO-05-256 Immigrant Investor Program 

Appendix III: Comments from the 

Department of Homeland Security 
Appendix III: Comments from the Department 

of Homeland Security 

Page 40 GAO-05-256 Immigrant Investor Program 
Appendix IV: GAO Contacts and 

Staff Acknowledgments 

Page 41 GAO-05-256 Immigrant Investor Program 

Paul L. Jones, (202) 512-8777 

William W. Crocker III, (202) 512-4533 

In addition to the above, James D. Ashley, David P. Alexander, Leo M. 

Barbour, Grace A. Coleman, David S. Dornisch, Ann H. Finley, Kimberly 

Michael, Miguel A. Salas, Jerome T. Sandau, and Ellen Wolfe made key 

contributions to this report. 

Appendix IV: GAO Contacts and Staff 

Acknowledgments 

GAO Contacts 

Staff 

Acknowledgments 

(440281) 
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