The EB-5 Immigrant Investor Program provides a valuable opportunity for foreign investors to obtain U.S. permanent residency by making a qualifying investment that creates jobs. While the program has enabled thousands to immigrate successfully, not every applicant receives approval. An EB-5 visa rejection can be a significant setback, often involving substantial financial loss, emotional stress, and wasted time.
Many rejections stem from avoidable issues such as incomplete documentation, unverified source of funds, or non-compliant projects. Understanding the most common reasons for EB-5 rejections—and the long-term effects they can cause—is critical for investors and their advisors. Proper planning and guidance can prevent many of these pitfalls, improving the chances of a smooth and successful immigration process.
In this article, we explore the most common causes of EB-5 visa rejection and their impacts, and provide guidance on how to avoid them.
What is the EB-5 Visa Program?
The EB-5 visa program was created by the U.S. Congress in 1990 to stimulate the economy through job creation and capital investment by foreign investors. The program enables eligible immigrant investors and their immediate families (spouse and unmarried children under 21) to become lawful permanent residents of the United States.
To qualify for the EB-5 visa, applicants must meet specific investment and job creation requirements:
- Investment Amount: A minimum of $1,050,000 or $800,000 in a Targeted Employment Area (TEA)
- Commercial Enterprise: Investment must be made in a new commercial enterprise
- Job Creation: The investment must create or preserve at least 10 full-time jobs for U.S. workers
- Lawful Funds: Investors must prove that their funds come from lawful sources and trace the path of the investment
The investor receives a two-year conditional green card if the conditions are met. After two years, they must file a petition (Form I-829) to remove the conditions and become permanent residents.
Common Reasons for EB-5 Visa Rejection
Despite its straightforward premise, the EB-5 process is complex and has potential pitfalls. Here are the most frequent reasons for EB-5 visa rejection:
1. Insufficient Documentation
Documentation is the backbone of a successful EB-5 visa petition. USCIS requires comprehensive evidence at every stage of the process. Missing, inconsistent, or poorly prepared documentation is a leading cause of rejection.
Applicants must submit tax returns, bank statements, employment records, business licenses, and affidavits to prove the source of funds and job creation strategy. Any discrepancy or omission can raise red flags and lead to a denial.
For example, submitting a business plan without detailed job creation projections or failing to include notarized affidavits for gifted funds can undermine the petition. Consistency across all submitted documents is vital.
2. Unlawful Source of Funds
The EB-5 program requires that investment funds come from legal sources. USCIS expects investors to provide a clear and documented path from the funds’ origin to their transfer into the U.S. enterprise.
Funds earned through illegal activities or lacking documentation are grounds for immediate denial. Even if the source is legal, such as a business sale or inheritance, failure to document the transfer and its legitimacy can result in rejection.
USCIS looks for:
- Tax returns
- Employment records
- Loan documents
- Gift letters
- Bank statements showing transfers
Failure to supply this chain of evidence can halt the petition.
3. Ineligible EB-5 Projects
Investing in a non-compliant or unqualified project is a significant risk. The selected commercial enterprise must meet EB-5 requirements and comply with USCIS standards.
Many investors choose regional centers for indirect job creation and lower involvement. However, not all centers are legitimate or in good standing. If a regional center loses USCIS designation or engages in fraudulent practices, associated petitions can be denied.
USCIS reviews the enterprise’s business model, management structure, job creation projections, and economic analysis. The petition is vulnerable if the project lacks feasibility, compliance, or job creation potential.
4. Failure to Meet Minimum Investment Requirements
The EB-5 program mandates a specific investment threshold, currently $800,000 for TEA projects and $1,050,000 for others. Applicants must prove they met this requirement in full.
Issues can arise from currency fluctuations, miscalculations, or failure to include transaction fees. The petition can be rejected if the final amount invested exceeds the requirement, even by a small margin.
Applicants must account for:
- Currency exchange rate risks
- Legal and administrative fees
- Transfer verification
Ensuring the full required amount reaches the U.S. enterprise is non-negotiable.
5. Failure to Demonstrate Job Creation
The EB-5 program is central to creating at least 10 full-time jobs for U.S. workers. Applicants must provide a business plan outlining how the investment will create or preserve these jobs within two years.
Rejections occur when:
- Business plans lack credible job creation modeling
- There are no supporting economic impact studies
- The enterprise fails to generate employment
- Investors attempt to count non-qualifying jobs (part-time or foreign workers)
A strong business plan should follow the Matter of Ho standard and provide specific timelines, staffing projections, and economic analysis.
6. Errors in Filing I-526 or I-829 Petitions
The I-526 and I-829 petitions are the cornerstones of the EB-5 visa process. Errors in completing these forms—such as incorrect information, missing signatures, or incomplete evidence—can lead to rejection.
Common mistakes include:
- Using outdated versions of the forms
- Omitting required exhibits
- Submitting inconsistent personal or financial information
- Failing to respond to Requests for Evidence (RFEs)
USCIS has strict guidelines and deadlines. Any error can result in denial or rejection without an opportunity to correct it.
7. Improper Use of Regional Centers
While regional centers offer convenience and reduced investor involvement, they also introduce third-party risk. If a regional center is not compliant with USCIS regulations or loses its designation, associated petitions are at risk.
Due diligence is critical. Investors must:
- Verify the center’s USCIS approval status
- Review its compliance history
- Evaluate the success of past projects
A regional center’s misconduct, financial instability, or litigation history can trigger denial even if the investor fulfilled their obligations.
8. Failure to Maintain Lawful Status
If an investor is already in the U.S. under a different visa (like F-1 or H-1B), they must maintain lawful status throughout the EB-5 process. Any visa overstay, status violation, or unlawful presence can make the applicant ineligible for adjustment of status.
Even minor issues, such as failing to enroll in school under an F-1 visa or unauthorized employment, can lead to denial.
Applicants must:
- Maintain a valid immigration status
- Avoid any lapses or violations
- Consult legal counsel before travel or changes
Ensuring complete and consistent documentation can be daunting. Engaging a skilled legal team like the Law Offices of Sweta Khandelwal can help avoid these pitfalls.
Effects of EB-5 Visa Rejection
A rejected EB-5 visa petition doesn’t just close the door on U.S. residency—it can have far-reaching consequences:
1. Delayed Immigration Plans
An EB-5 rejection can derail long-term immigration plans. Applicants counting on the EB-5 to secure a green card for themselves and their family must now face extended timelines, legal complexities, and uncertainty.
Delays may cause those with children approaching 21 to “age out” and lose eligibility. This can severely impact business relocation, children’s education plans, and long-term residency goals.
2. Loss of Investment Capital
Many EB-5 investments are illiquid and carry risk. If the visa is denied, recovering the invested capital becomes challenging, especially if the business is ongoing or underperforming.
Most regional centers do not guarantee returns or capital refunds. A denial may result in the investor losing a substantial portion of their investment.
3. Impact on Future Immigration Applications
Visa rejection becomes part of the applicant’s immigration record. Future applications for a tourist visa, work permit, or other green card may face greater scrutiny.
If the rejection involved fraud, misrepresentation, or illegal funds, it may result in permanent inadmissibility. Legal remedies, such as waivers, may be required to apply again.
4. Legal Complications and Costs
Appealing or refiling an EB-5 petition involves significant legal costs. Investors may need to hire attorneys, prepare new documentation, and respond to RFEs or Notices of Intent to Deny (NOIDs).
The financial burden of starting over and the original investment loss can be devastating. Legal representation becomes essential, adding to the expense.
5. Emotional Stress and Uncertainty
Beyond money and legal issues, EB-5 visa rejection can be emotionally draining. Families who planned a new life in the U.S. may face heartbreak, confusion, and anxiety about the future.
Career plans, children’s education, and the dream of U.S. residency are put on hold, often indefinitely. For many, the psychological impact can be just as severe as the financial one.
Rejection vs Denial: What’s the Difference?
While “rejection” and “denial” may sound similar, they carry significantly different implications in the context of immigration, especially with an EB-5 visa application. Understanding the distinction between the two is critical, shaping your next steps and legal options.
What is a Rejection?
A rejection occurs before USCIS reviews the substance of your EB-5 petition. It typically happens when there are technical or procedural errors in your application. Common reasons for rejection include:
- Missing or unsigned forms
- Incorrect filing fees
- Incomplete documentation
- Submitting outdated USCIS forms
In these cases, your petition is returned without being entered into the adjudication process. The good news is, since USCIS hasn’t yet examined the merits of your case, a rejection doesn’t reflect negatively on your eligibility. You can typically fix the issue and resubmit the petition without legal consequences, although it may delay your timeline.
What is a Denial?
A denial means that your petition was reviewed but did not meet the required legal or evidentiary standards set by USCIS. Denials are far more serious than rejections and may arise from:
- Insufficient or flawed job creation documentation
- Inadequate investment amount or structure
- Inability to verify the lawful source or path of funds
- Non-compliant business plans or project inconsistencies
In such cases, USCIS provides a formal notice explaining the reasons for denial. This decision stays on record and can impact future immigration filings if not adequately addressed.
Why the Difference Matters
The response to a rejection is usually straightforward—correct the error and refile. However, a denial often requires a strategic response, such as:
- Filing a Motion to Reopen or Reconsider
- Submitting an appeal to the Administrative Appeals Office (AAO)
- Seeking alternative visa pathways or reapplying with more substantial evidence
By understanding whether your case was rejected or denied, you and your immigration attorney can take the most effective and timely action to protect your immigration goals and investment.
How to Avoid EB-5 Visa Rejection
Mitigating the risk of EB-5 visa rejection begins with a proactive approach grounded in thorough documentation, legal compliance, and strategic planning. The following best practices can significantly enhance the likelihood of approval and protect your investment.
1. Hire an Experienced EB-5 Immigration Attorney
Retaining a qualified EB-5 immigration attorney is perhaps the most critical step in ensuring the success of your petition. The EB-5 program is complex, involving not only immigration law but also corporate, tax, and securities compliance. A seasoned attorney will provide personalized guidance through each phase of the process.
Your attorney will help ensure that:
- All documentation aligns with USCIS evidentiary standards.
- The lawful source and path of investment funds are established.
- Petitions are filed accurately, with no procedural oversights or missed deadlines.
An experienced attorney will also help you respond effectively to Requests for Evidence (RFEs) or Notices of Intent to Deny (NOIDs), which is often a decisive factor in avoiding outright denial.
2. Conduct Proper Due Diligence on Projects
Whether you’re investing in a direct enterprise or a regional center project, due diligence is critical. Many EB-5 petitions are denied because the investor selects a non-compliant or financially unstable project.
Key due diligence steps include:
- Reviewing project history: Investigate whether the project or regional center has a proven track record of I-526 and I-829 approvals.
- Evaluating financial soundness: Analyze the project’s financials, including profit forecasts, third-party audits, and capital structure.
- Assessing job creation models: Confirm the project can create at least 10 full-time jobs per investor, as per USCIS guidelines.
- Engaging independent experts: Economists and legal advisors can validate whether the project’s claims meet EB-5 criteria.
Comprehensive due diligence reduces the risk of project-related denials and ensures your investment is secure.
3. Verify the Lawful Source and Path of Funds
USCIS requires EB-5 applicants to present a transparent and well-documented financial trail showing that investment funds were legally obtained. Failure to demonstrate this is a leading cause of petition rejections.
To prepare:
- Gather historical income documentation: Include employment records, salary slips, business profits, dividend statements, and tax returns.
- Document gifts and loans: If funds are gifted or loaned, provide notarized agreements, proof of donor/lender income, and transfer receipts.
- Track the flow of funds: Document each step from the source to the final EB-5 investment, covering international wire transfers, currency conversions, and bank accounts involved.
The more precise and organized this paper trail is, the more confident USCIS will approve your petition will be approved.
4. Ensure Compliance with Job Creation Requirements
USCIS mandates that each EB-5 investment create at least 10 qualifying full-time jobs for U.S. workers. Inadequate or unsubstantiated job creation plans are common grounds for rejection.
To satisfy this requirement:
- Develop a comprehensive business plan: This should clearly outline how, when, and where the jobs will be created.
- Use economic modeling: For regional center projects, include impact analysis using USCIS-accepted models (such as RIMS II or IMPLAN).
- Describe job positions in detail: Include job titles, roles, locations, and anticipated timelines for hiring.
- Include contingency plans: Show that the business can meet job creation targets even in adverse market conditions.
By offering a structured and credible hiring roadmap, your petition will present a stronger case for approval.
5. Review All Petitions Carefully Before Submission
Filing errors—even minor ones—can be fatal to an EB-5 petition. USCIS strictly adheres to its administrative procedures and often rejects submissions with missing signatures or outdated forms.
Before submission:
- Use the latest USCIS forms and check version dates.
- Ensure accuracy and consistency across all data points (e.g., names, dates, investment figures).
- Please include all required exhibits, such as business plans, job creation forecasts, fund source records, and transfer confirmations.
- Confirm that proper signatures and government fees are attached.
- Have an attorney review the petition to identify any red flags or inconsistencies.
Taking time to review the petition significantly reduces the chance of denial on procedural grounds.
6. Keep Your Immigration Status in Good Standing
Applicants in the U.S. under a different visa category must maintain valid immigration status throughout the EB-5 application process. Falling out of status can disqualify your petition even if all other criteria are met.
Key considerations include:
- Avoid unauthorized work or study that violates the terms of your current visa.
- Consult an immigration attorney before traveling abroad, changing visa categories, or filing an extension.
- File all required updates and renewals on time to avoid gaps in status.
- Maintain records of all visa-related documentation, including I-94 entries, employment authorizations, and status approvals.
Good standing supports your EB-5 eligibility and helps ensure a seamless transition if you apply for an Adjustment of Status (AOS).
Partnering with experts like those at The Law Offices of Sweta Khandelwal can significantly enhance your likelihood of a successful petition.
What to Do After an EB-5 Visa Rejection
Receiving a rejection notice can be disheartening, but it doesn’t necessarily mark the end of your EB-5 journey. Depending on the reason for the denial, you can take several constructive next steps to rectify the issue or reapply successfully.
1. Refile the Petition
Rejection often results from fixable issues, such as insufficient documentation, minor errors, or missing exhibits. Refiling the I-526 petition after correcting the identified deficiencies is a straightforward way to continue the EB-5 process.
Refiling may be appropriate if:
- The investment funds and source documentation are now complete.
- You have chosen a new, compliant EB-5 project.
- You’ve addressed previous errors in job creation estimates or business plans.
This route is handy when rejections are based on technicalities rather than ineligibility. Just ensure the new petition is thoroughly reviewed and significantly improved.
2. File a Motion to Reopen or Reconsider
If you believe the USCIS decision was based on a misunderstanding of facts or misapplication of the law, you may file a motion to reopen or reconsider.
- A Motion to Reopen allows you to submit new, previously unavailable evidence.
- A Motion to Reconsider argues that the decision was legally incorrect, based on evidence already on record.
These motions must be filed within 30 days of receiving the denial notice and should be prepared by a skilled immigration attorney. They’re particularly effective in cases involving procedural oversight or incomplete review by USCIS.
3. Appeal to the Administrative Appeals Office (AAO)
For complex denials involving legal interpretation or disputes over eligibility, you may file a formal appeal with the AAO. This is a more time-intensive process, but it provides an opportunity to challenge USCIS’s decision on a broader legal platform.
Filing an appeal is appropriate when:
- The denial involves an ambiguous regulatory interpretation.
- You believe your petition met all EB-5 requirements.
- There was an apparent legal error in the original review process.
AAO appeals must also be filed within 30 days of the denial and require extensive legal argumentation, so expert legal representation is vital.
4. Consult an Attorney for Next Steps
No two EB-5 cases are identical, and a customized strategy is essential after a rejection. Consulting a specialized EB-5 immigration lawyer allows you to assess your options objectively and confidently move forward.
A knowledgeable attorney can:
- Analyze the denial notice in detail.
- Advise whether refiling, appealing, or switching to another visa category is optimal.
- Provide insights into project credibility and compliance.
- Help ensure that your next attempt, whether with EB-5 or an alternative route, is set up for success.
Sometimes, switching to other immigrant investor or employment-based categories may be more appropriate depending on your circumstances.
Conclusion
The EB-5 visa offers an incredible opportunity, but success hinges on careful preparation and legal compliance. From documentation and source of funds to project selection and job creation, each element must meet strict USCIS requirements.
A rejection can delay immigration plans, cause financial loss, and create legal headaches. However, many risks can be avoided with proper support and due diligence.
If you’re considering the EB-5 path, partner with experts to guide you through the complexities and help you build a strong, compliant, and successful petition.
Contact The Law Offices of Sweta Khandelwal—a top-rated immigration law firm based in the Bay Area, California, with offices in San Jose and Palo Alto. Led by Sweta Khandelwal, an immigration attorney with over 18 years of experience, the firm specializes in business and investment immigration, including EB-5 visas. Whether you need help tracing your source of funds, preparing a compliant business plan, or responding to a USCIS request, the Law Offices of Sweta Khandelwal provide the expert guidance you need for a successful outcome.
Disclaimer
Please note that the prices listed for visa services are estimates and may vary in real-time. We recommend consulting the official government websites or other authoritative resources for the most up-to-date pricing information. These estimates do not constitute a guarantee of costs, and fees may change without notice.
