EB-5 Retrogression and its Effect on Chinese Applicants
Previously when China exceeded 7 percent of its allocated EB-5 immigrant investor visas, applicants were allowed to take the allocated visas of other countries that did not use their quota. All this has changed now since the US State department decided that issuing new EB-5 Visas to Chinese applicants will be frozen or retrogressed until October 1, 2014. Starting October, a brand new visa quota of 10,000 EB-5 visas for all applicable countries will become available for the fiscal year going all the way through September 30, 2015. Once again China should be given 7 percent of this allotted amount and will be allowed to access the unused visas given to other countries.
In 2013, 8,567 EB-5 visas were issued. In the first two months of the 2014 fiscal year alone, over 6,700 EB-5 petitions were already filed and pending with the USCIS. The implications of this is that reaching the annual 10,000 allotment for the new fiscal year will certainly be inevitable, delaying Chinese Immigrants in their ability to obtain an immigrant investor visa even more than they will already be waiting during the time it takes to process their I-526 petitions. Unfortunately this will force some Chinese investors to look to other countries that are active in pursuing investors. Some examples are the United Kingdom, Canada, and Australia, which will welcome Chinese investors that have no choice but to immigrate there due to being dealt the prospect of waiting two or more years before being able to immigrate to the U.S. It is in the interest of the United States to immediately prevent this. It is estimated that the EB-5 program has raised more than $6.7 billion in capital for needed projects and created more than 95,000 direct jobs, and hundreds of thousands of indirect and induced jobs. The USCIS estimates that 80-90% of all EB-5 investors select real estate-related investments, particularly those that create a large number of new US jobs such as hotels, restaurants, night clubs, resorts and senior living.
The USCIS needs to realize that EB-5 immigrants make up less than 1 percent of the immigrants that come to the United States, and this is likely because they come from the top 99 percent. These applicants are all well-educated and wealthy individuals that will do nothing but create capital for projects in the country as well as create great jobs for Americans. The solution is simple: raise the maximum cap on the total EB-5 visas allotted and re-evaluate the 7 percent cap on Chinese immigrants in that category. Additionally, the USCIS can limit the 10,000 investor visas to be limited to petioners alone and not the family members that they choose to bring along. This is because the average EB-5 applicant comes with two to three other family members. With this average calculated, the United States will see 30,000 new immigrants as opposed to the 10,000 cap.
In conclusion, the EB-5 program is a great opportunity for investors and the United States alike. However, in order for it to succeed and thrive, the USCIS needs to eliminate this huge accumulation of petitions and caps, EB-5 Retrogression, and reduce the 1-2 year processing time. These considerations need to be accommodated or the program will simply not be viable.
Thank You, John B. Buda, Esq. www.budalawgroup.net office: 310-452-1872 john.buda@budalawgroup.net 3301 Ocean Park Blvd. Suite 205 Santa Monica, CA 90405
