Earlier this year, we published the 2018 edition of our annual EB-5 white paper, “The Changing Tides of EB-5: 2018 EB-5 Industry Trends & Insights.” Today we take a closer look at one of the more significant findings from this year’s report: the rapidly shifting makeup of the EB-5 investor pool.
For the first time in the modern history of the program, mainland Chinese-born applicants constituted less than 50% of the EB-5 investor pool in the last quarter of 2017. Unfortunately, this trend has continued throughout the past year, with Chinese applications representing less than 25% of all inflows in the two most recent quarters for which we have data.
There is one clear reason for the shift: USCIS limits the number of EB-5 visas available to citizens of any one country in a given year, and the resulting supply/demand imbalance has led to a wait list of more than a decade for new Chinese EB-5 petitioners. For many interested parties, the wait has simply become too long, and they have turned their attention to other, more accommodating visa programs in other countries.
However, there is a silver lining here. As Chinese investment has declined, alternative markets in Africa, Latin America and elsewhere in Asia continue to gain steam.
In some countries (e.g., India), the increased interest stems from a growing affluent class as well as concerted marketing efforts by EB-5 issuers over the past few years. In others, unfortunately, the ramp-up in I-526 petitions is likely due to a push more than a pull: Venezuela and Turkey, for example, are in the midst of their own still-escalating humanitarian crises, which are creating strong incentives for emigration.
EB-5 is an industry characterized by continual evolution, and we see this shift as just one more piece of the story. Overall, we predict that the trend of EB-5 market diversification will continue, strengthening the industry despite uncertainty in China.
Many more insights await you in this year’s white paper, “The Changing Tides of EB-5: 2018 EB-5 Industry Trends & Insights.” Download your copy today!