EB5 Investors Magazine - Page 46

The Retrogression Confronting the Challenges of a Chinese Visa Backlog in 2015 and Beyond by David Hirson and Cletus M. Weber The inevitable visa backlog for China-born EB-5 investors and their family members has been rumored for some time, but concerns finally became reality when Charles Oppenheim of the U.S. Department of State (DOS) recently predicted that, around June 2015, the DOS will need to impose an initial two-year visa backlog for EB-5 investors born in mainland China. Also, as described in more detail below, Oppenheim further predicted that this waiting line for Chinese EB-5 investors will continue to grow in years to come. This article explains the visa backlog problem and how it will affect EB-5 investors, EB-5 regional centers, project developers and the EB-5 industry on the whole, as Chinese investors adjust to the new delays in visa processing and/or U.S. law is changed. The accompanying articles explain calculating child “age out” issues under the related Child Status Protection Act (CSPA), and provide guidance on strategies for practitioners working with mainland China-born EB-5 investors. 44 U.S. visa allocation system The U.S. visa allocation system is complex and technical, but simply put, 10,000 visas are allocated annually for the EB-5 category and applicants from all countries are treated equally until it appears that the entire annual allocation will be used up during a particular fiscal year. When that happens, applicants from over-subscribing countries (technically speaking, countries that use more than 7 percent of the worldwide total) must wait for a future year’s allocation to be available before they can obtain a green card. This allows applicants from other countries to apply for and obtain green cards without additional delay. Until the past fiscal year, worldwide EB-5 visa demand never required a cap on any one country’s visa usage, but visa usage in the current fiscal year, and foreseeable fiscal years, is expected to continually reach 10,000. Because investors from mainland China use so many EB-5 visas, they will face a growing backlog in waiting to obtain a green card. In overseeing the EB-5 visa allocation system, the DOS must use (or reallocate to other visa categories through technical rules) all 10,000 visas—but never more than that. To decide which applicants can obtain green cards in what order, the DOS establishes a queue by assigning each investor a “priority date,” which is the date that U.S. Citizenship and Immigration Services (USCIS) receives the investor’s I-526 petition. Once the DOS establishes a cut-off date in the EB-5 category, only investors with approved I-526 cases and priority dates before the cut-off date are eligible to proceed with consular processing (CP) or adjustment of status (AOS). As predicted for the 2015 fiscal year, China is the only country that will be subject to delays while waiting for visa numbers. Investors from all other countries can continue to process without additional delay. EB5 INVESTORS MAGAZINE