Robert C. Divine is the Vice President of IIUSA and the Chair and Shareholder of the Immigration Group at Baker Donelson Bearman Caldwell & Berkowitz.
Dear IIUSA Members:
Last Saturday (the announcement date was August 23, 2014), the announcement that EB-5 visas from Mainland China cannot be obtained for the remainder of the fiscal year felt like a low-intensity "drill," and there will be more such "stings" for Chinese applicants next year. First, let us remember what aspects the announcement will not affect: it will not affect the processing of I-526 or I-829 cases, it will not affect immigrant applicants who are not born in Mainland China, and it will not even affect applicants from Mainland China after next month. But we need to consider what this implies.
The announcement reflects that nearly 10,000 EB-5 visas distributed by Congress each year are about to be exhausted by the end of next month in this fiscal year. Data from the immigration bureau in August 2014 shows that approximately 4,000 applications were approved in the first three quarters. This may well align with the demand for 10,000 visas, including family members of investors. The data also shows that the number of applications per quarter has increased to 3,000, or 1,000 per month, which is at least double the annual visa quota. The immigration bureau reports that there are currently 10,375 applications pending review, and it is expected that about 75% of these applications will be approved. This means that as long as the immigration bureau speeds up the approval of I-526, the State Department will have to take early measures at the beginning of each new fiscal year to avoid the immigration bureau and various consulates issuing too many EB-5 visas and green cards. So far, the excess demand for EB-5 visas has been "hidden" in the backlog of I-526 applications at the immigration bureau. However, once the immigration bureau improves its processing efficiency, the State Department will have to take on the responsibility of controlling the supply of visas.
One point that everyone knows and needs to remember is that, for the foreseeable future, the visa quota issue will only affect investors born in Mainland China (and these investors do not have accompanying spouses born in other countries according to special visa allocation rules). This is because: (1) the number of applications from China accounts for 80% of the total applications; (2) immigration law imposes a 7% limit on each country. The 7% quota for China has already been exhausted by the Chinese Student Protection Act of 1992, which deducts the number of visas allocated to Chinese applicants from the 700 EB-5 visas allocated to China each year. Therefore, Mainland Chinese EB-5 applicants are actually only using the visa quota that has not been exhausted by applicants from other countries. Last year, fewer than 1,700 visas were used by other countries, leaving a significant surplus for Mainland China, and this situation does not seem to change quickly. Therefore, the State Department needs to estimate how many visas will be used by other countries and then allocate the remaining visa quota to Mainland Chinese applicants in the order of approved I-526 submissions.
This year, the phenomenon of EB-5 visas being exhausted is slowly approaching, and the State Department had to suddenly announce that "there are no excess visa quotas for Mainland China for the remainder of this fiscal year". On October 1, the new fiscal year will begin, and new visa quotas will be released, but it is possible that by January next year or later, we will see a "priority date" appear in the "Visa Bulletin" for Mainland China, meaning that applicants with approved I-526 can apply for adjustment of status with the immigration bureau or attend an interview at the consulate if their submission date is before this priority date. Since most approved applicants submitted their I-526 over a year ago, this can reflect the review cycle of USCIS, and we have reason to believe that the priority date will be set more than a year before the publication of the priority date table. Now let us look at the possible scenarios for the priority date table:
The priority date that appears next year will not have a very intense impact, but this impact will gradually expand as the demand for visas continues to exceed supply. When the priority date is earlier than the submission date of the investor's I-526, it will only affect the process of the investor using the approved I-526 to apply for a green card, and will not affect USCIS's processing of I-526 and I-829. The delay in obtaining the temporary green card will have the following impacts:
Ageing Out: This issue is somewhat complex, but the bottom line that Chinese investors need to know is to submit the I-526 before their child turns 21 (do not wait until the last moment) and to include accompanying family members in the visa application process as soon as possible after the I-526 is approved.
Investment and Employment Maintenance: The delay in Chinese investors obtaining their temporary green cards will also delay their application for permanent green cards two years later, and will push back the timeline for maintaining investments and employment for I-829 operations. This will involve some questions that USCIS has not yet clearly answered, especially regarding the impact of liquidating the job-creating enterprise before the expiration of the investor's temporary green card.
Significant Changes: The delay in obtaining temporary green cards for Chinese investors will make it easier for investors to face the risk of the immigration bureau withdrawing cases due to significant changes in the project.
Expedited I-526 Review: This is rare, but it has become less meaningful for applicants from Mainland China, as expedited review will not provide them with excess visa quotas. The allocation of visas depends on the submission time of I-526.
Escrow Accounts: No impact. If there are no escrow accounts for the project, there is no impact. If there are escrow accounts for the project, as long as the I-526 is approved, the escrowed funds must be fully released and used by the project party.
TEA Target Employment Area Centers: No impact. If the project was in a TEA at the time of I-526 submission, then regardless of whether there are visa quotas later, it does not affect the approval of the project in the I-526, as long as the I-526 met the TEA requirements at the time of application submission.
I hope this article can help you.
Sincerely,
Robert C. Divine
Source: IIUSA Official Website
President of WorldwayWinner Xing, PhD andRobert C. Divine, Attorney at Law
