Waiting List to Be Established for China EB-5s (Update)

The maximum level of immigrant visa numbers which may be made available to China EB-5 applicants during fiscal year 2014 has been reached, effective August 23, 2014. This according to Charles Oppenheim, Chief of the Immigrant Visa Control and Reporting Division at the U.S. Department of State.

The State Department’s announcement shows that for the first time since passage of the Immigration Act of 1990 the full annual allocation by Congress of almost 10,000 EB-5 visa numbers will have been given out.

A fiscal year runds from October 1 through September 30. So immigrant visa numbers should become available again at the start of the new fiscal year, on October 1. But USCIS has some 10,375 petitions pending, about 75% of which are likely to be approved, so as USCIS adjudicates these petitions, the waiting list to immigrate will reappear. Maybe as early as January 2015 the State Department’s Visa Bulletin will show a “cut-off date” for EB-5 China.

Impact on Chinese Investors

Here’s how the wait list will impact Chinese investors:

• Prospective investors would need to be aware that they need to commit their funds (e.g., put funds in escrow or actually invest them) upon filing the I-526 but would not be able to immigrate until an immigrant visa number is immediately available.
• Delaying when Chinese investors obtain conditional residence also delays when they can file the Form I-829, Petition by Alien Entrepreneur to Remove Conditions, two years later. That means they need to maintain their investment and proof of creating the required 10 jobs for U.S. workers for longer.
• The longer time required to obtain conditional resident status increases that a child who reaches age 21 could “age out,” becoming ineligible for conditional resident status. So file early if you have children approaching age 21.

The wait may increase over time if demand for visa numbers going forward continues to exceed supply.

Impact on Cases Adjudicated Before October 1

Mr. Oppenheim of the State Department has notified the American Immigration Lawyers Association (AILA) as follows:

Department of State Processing: The establishment of a monthly cut-off or “Current” status for a numerically controlled preference category applies to those applicants who were reported documentarily qualified prior to the determination of cut-off dates and allocation of visa numbers for that month. Therefore, all China EB-5 applicants who have been scheduled for interview at an overseas post based on the original establishment of the August and September cut-off dates would have been allotted visa numbers for potential use by their case. Such applicants will not be impacted by the “Unavailability” of the China EB-5 category for the remainder of FY-2014. In this context, “Unavailable” means that no additional numbers are available for “comeback” cases originally scheduled for interview in an earlier month who are just now returning, or for those first requesting an interview. The only exception would be if a post had “otherwise unused” numbers available, because applicants either failed to appear or failed to overcome a refusal during the month (i.e., August or September) of originally scheduled interview.

U.S. Citizenship and Immigration Services (USCIS) Processing: USCIS offices may continue to accept and process China Employment Fifth preference cases and submit them in the normal manner. However, instead of being acted upon immediately, those cases will be held in the Visa Office’s “Pending Demand” file until October 1, 2014. At that time, all eligible cases will be automatically authorized from the “Pending Demand” file under the FY-2015 annual numerical limitation. Each USCIS requesting office will receive an e-mail notification of such authorizations, which will be effective immediately.

Impact on Developers

Because the visa program serves as a funding mechanism for local development projects, the prospect of longer waits for visas could reduce EB-5’s usefulness for developers on tight deadlines to complete their projects, Stephen Yale-Loehr tells the L.A. Times.

“For businesses that rely on EB-5 money to finance their projects, it will become difficult to start and finish their work,” Yale-Loehr said.

How the Wait List Works

This waiting list will only impact Chinese nationals. China has been accounting for 80% of the demand, and the law limits any one country to 7% of the numbers by right. But as explained by IIUSA VP Robert C. Divine,

China’s 7% allocation is already essentially used up by the Chinese Student Protection Act of 1992, which required that visa numbers allocated to Chinese nationals under that law be taken out of future allocations for China EB-5 at 700 per year, so mainland Chinese essentially get only whatever numbers are not used up by people born elsewhere. Last year less than 1,700 visas were used by the rest of the world, leaving lots for mainland China, and that does not seem to be changing fast. So the State Department has to guess how many visa numbers the rest of the world will use in the year and allocate the rest in an orderly way to applicants from mainland China in the order in which the investor filed the Form I-526 that was approved.

The wait list only impacts Chinese nationals with an approved Form I-526, Immigrant Petition for Alien Entrepreneur, who are applying for conditional resident status via an immigrant visa application or a Form I-485, Application to Adjust Status. When a visa number cut-off is earlier than the person’s I-526 filing date, it delays when they can use the approved I-526 to file the immigrant visa application or the I-485. For background, see our article, How to Read the State Department Visa Bulletin.