Time May be Running Out for China EB-5 (Investors)
December 22, 2014
Late in the previous fiscal year, something happened for the first time: the EB-5 investor immigrant visa category’s quota of 10,000 annually was reached. Once the visas allocated to this visa category run out, (which is what happens when the quota is reached) annual per-country limits are designed to come into effect. This outcome has not been properly planned for and would have serious consequences for the many local economies that benefit from international investment. Luckily, the quota was reached at the very end of the fiscal year, after the State Department (DOS) released its official monthly visa bulletin saying that the visas would be available until the very end of the year based on its calculations. With its hands somewhat tied, DOS decided to act as if though it had more visas to give out by borrowing some from the following fiscal year’s supply.
Because of this, DOS has not yet instituted the per country limits. However, the problem has nowhere near resolved itself. In fact, this is evidence that the clock has almost run out on EB-5 investment immigrants from (The People’s Republic of) China. This is because almost 80% of the people who receive visas under the EB-5 category are from China. In order to prevent an oversubscription of visas, there will most likely soon be a priority date cut-off introduced for Chinese immigrants, but likely not for anywhere else (though this may happen too). (This translates to an introduction of a “waiting period” for the visa to Chinese immigrants.)
The EB-5 category is for those wishing to move to the United States to invest. The process is slightly different than usual employment based immigration. In most cases, the immigrant must invest $1,000,000 dollars in U.S. enterprise and create or save at least ten jobs. (The immigrant may only have to invest $500,000 if they are doing so in a high-unemployment area.) Comprehensive business plans and proof of irrevocable investment and risk must be prepared before petition submittal. For immigrants wishing to move to the U.S. to work (and not to invest), they must prove to the U.S. Department of Labor that they are not displacing American workers by either lowering the average wages or taking a job that one of them is seeking. In the case of investors, they must show that they are helping American workers by improving the job market with their investment.
Once the evidence for this is secure and ready to be submitted (hopefully having been prepared by a competent immigration law firm), an I-526 may be filed. Upon approval of this petition, the alien and his or her family may apply for conditional green cards, unless a “priority date” cut-off is introduced. The priority date represents the date the I-526 was filed, and will be printed on form I-797, which is used for receipt and approval notices. When a priority date is introduced, the immigrant will have to wait until the DOS’ monthly visa bulletin prints a date (in this category) that is on or after the immigrant’s given priority date. The date listed on the visa bulletin can be thought of as the most recent place in line to which the government is issuing visas.
This all may seem fine, but there is a serious problem To begin with, the waiting period could be much longer than anticipated. While there may be only 8,000 people petitioning from China (out of the 10,000 available visas), these people will have family members. Because the wait time will be newly introduced, people may assume that the wait time will be somewhere from six months to two years. But if every Chinese investor brings only two family members, there will be around 21,000 visas to be issued from fiscal year 2014 from China alone. So if it will take up to three years for all of 2014’s investors and their families to be given visas, how long will it take for those that petition in 2015?
While extensive wait periods are nothing new in U.S. immigration, the nature of the I-526 (that gets the EB-5 process started) makes it very unfriendly to wait times. This is because filing it requires that the investment money be irrevocably invested. Further, once again, the green card one can immediately apply for when there is no further waiting is conditional; it is only valid for two years. The immigrant may only apply for a non-conditional green card if the investment sustains ten jobs over that two year period. But once the money is originally invested, priority date waiting period or not, those ten jobs must be continually sustained over the entire period (of priority date waiting time plus the two years) in order for the immigrant to be eligible for the eventual unconditional green card. However, the immigrant may not be in the country actively overseeing the investment until the conditional green card has been issued.
This would make investment immigration very unattractive for Chinese nationals, who compromise the vast majority of EB-5 applicants. Substantial improvements will require congressional intervention, either to rework the process or to add new visas. However, the political climate, especially on immigration, is such that this is not likely to happen. These immigrants may look for other ways to enter the country that don’t have as much of a wait time, or look elsewhere to place their money. The only advice we can give to Chinese nationals looking to invest here in order to immigrate is to do so as soon as possible before the wait time is instituted. Here at The Law Firm of Shihab and Associates, we are very experienced at processing EB-5 cases as fast as possible. Waiting only a few weeks now could mean waiting for a few years and getting caught in a vicious cycle of government regulations.