On December 7, 2012, Mr. Charles Oppenheim, head of the Visa Control Office of the U.S. Department of State, reiterated during an EB-5 webinar that EB-5 immigrant investors born in mainland China might establish a backlog after April 2013. This was based on the usage of EB-5 visa quotas published by the U.S. Department of State for 2011 and 2012, where a total of 3,463 EB-5 immigrant visas were used worldwide in 2011, with Chinese applicants accounting for 2,408; in 2012, a total of 7,641 were used worldwide, with China accounting for 6,124 visas.
According to U.S. immigration law, if the overall demand for a particular visa category exceeds the overall quota for that category, statutory limits will be triggered, leading to backlog issues for certain countries/regions.
On December 9, 2013, one of the most renowned and professional immigration attorneys in the EB-5 field, Kate Kalmykov, published an article stating:
"It is well known that the U.S. Immigration and Nationality Act limits the number of visas issued each year. However, although Chinese investors can obtain 10,000 EB-5 visa quotas annually, after deducting the 600 specified in the 1992 Chinese Student Protection Act, the actual number of EB-5 visas available to Chinese applicants is only 9,400. Moreover, the remaining 9,400 visas are not solely for individual EB-5 investors; they also include derivative applications resulting from the investors. Therefore, based on one EB-5 investment, the more family members that submit EB-5 applications, the fewer visa quotas remain for that year. Assuming a couple of investors has one child, the annual visa quota can only accommodate 3,100 families. Given the current popularity of the EB-5 program, 3,100 families are clearly insufficient to meet the needs of numerous investors.
Although the EB-5 visa quota has never reached its limit in the past, this situation is not expected to last long, as the number of EB-5 visas issued by the U.S. Citizenship and Immigration Services has been significantly increasing in recent years. For example, in 2012, 7,640 of the 10,000 quotas were used, while in 2013, this number rose to 8,564 (according to the latest data from the immigration agency). Additionally, the U.S. Citizenship and Immigration Services has indicated that as of 2014, approximately 6,500 I-526 applications are awaiting adjudication. If each EB-5 investor applies for U.S. visas for themselves, their spouse, and children, then half of the 2014 visa quota has already been consumed. Therefore, it is highly likely that there will be a retrogression in visa backlogs in 2014.
Visa backlog retrogression is actually caused by a large accumulation of visa applicants. Because of this accumulation, investors' applications must be processed in the order they were submitted. The submission time referred to here is the "priority date." Although applicants can submit such priority immigration applications at any time, they may be unable to apply for consular interviews or adjust their status (i.e., the actual green card application) before their priority date arrives due to the accumulation of applications. The Department of State publishes the priority dates for the month on its visa bulletin, and applicants who submit their applications before this priority date can process their green card applications through the immigration visa process outside the U.S. or apply for adjustment of status within the U.S."
If a backlog does occur, it will impact Chinese applicants in the following ways:
1. Longer application times. EB-5 applications consist of a first step conditional green card application (I-526 application) and a second step of submitting a removal of conditions application (I-829 application) after obtaining the conditional green card within 21 months. The first step of the conditional green card application is further divided into: the first phase of the EB-5 applicant's qualification application and the second phase of the immigrant visa application. In the absence of an EB-5 backlog, regardless of the priority date of the EB-5 applicant, they can immediately enter the second phase of the immigrant visa application after obtaining I-526 approval from the immigration agency. However, if there is a backlog, although mainland Chinese EB-5 applicants can still submit their conditional green card applications at any time, they must wait for their priority date to arrive before they can enter the second phase of the immigrant visa application after obtaining I-526 approval. This waiting time may not be too long at first, but it will reflect a new trend in visa quota allocation, which will likely result in longer waiting times for green card backlogs for investors born in China.
2. For applicants within the U.S. during the backlog period, maintaining legal non-immigrant status will become an issue. One of the important reasons for international students to apply is to quickly resolve their green card status in the U.S. to work and travel freely. Since they already hold legal non-immigrant status in the U.S., they can choose to apply for adjustment of status directly in the U.S. to obtain a conditional green card, without having to return to China for an interview at the U.S. Consulate in Guangzhou—this is contingent upon maintaining legal status in the U.S. at the time of submitting I-485. However, if a backlog occurs, applicants must still maintain legal status during the waiting period. If their F-1 or H-1B status expires, they may have to leave the U.S. and wait for their green card in China.
3. The impact of backlogs on the operation time of EB-5 investment projects, funding timelines, job creation timelines, and other related issues. Due to immigration law stipulations, before applicants submit their removal of conditions application (i.e., I-829 application), the funds must remain in the investment project and be non-retractable. If there is a backlog, it means that investors' funds must remain in the project until their priority date arrives, and only after the removal of conditions application is completed can they withdraw their investment. This inadvertently increases the time that funds are frozen. Furthermore, immigration law requires that before applicants submit their removal of conditions application (i.e., I-829 application), each investor's funds must create more than 10 job opportunities. If there is a backlog, it means that during this period, they cannot lay off or reduce the number of employees, which will inevitably increase project operating costs. Additionally, many regional center projects have loan agreements with third parties for job creation, such as 5 or 6-year loan agreements. However, if the loan agreement for the regional center project expires, and mainland Chinese EB-5 investors are still unable to submit their removal of conditions application due to waiting for the backlog, will the loan be repayable? How will the immigration agency handle this situation? These remain unknowns. Therefore, EB-5 regional center projects and conventional projects will face many new issues regarding company planning, funding timelines, job creation timelines, and various legal agreements.
In summary, like all other immigration visa categories with backlog issues, since the priority date is determined by the submission of the I-526 application, it is advisable for investment immigration applicants to submit their I-526 applications as soon as possible to obtain an earlier priority date to mitigate the aforementioned impacts.
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