EB-5 Annual Limit to Impact Chinese Investors in 2014

EB-5 Annual Limit to Impact Chinese Investors in 2014
December 19, 2013

Since the creation of the EB-5 program in 1990, the annual quota of 10,000 EB-5 investors and derivative family members has never been reached.  Up until fiscal year (FY) 2011, demand for EB-5 visas never reached 40% of the 10,000 quota. However, with the increasing popularity of regional center investments and high demand from Chinese investors, who use over 80% of EB-5 visa numbers, EB-5 visa usage reached 76% of the quota in FY2012, and 85% in FY2013.

In 2014, it is widely anticipated that the annual quota of 10,000 EB-5 visas will be completely exhausted, and for the first time ever, a queue will exist for Chinese EB-5 investors by May or June, resulting in a long wait for EB-5 green cards.  This scenario is inevitable because demand for EB-5 reached its highest level (8,567) in FY2013, ending September 30, 2013, and USCIS currently has a backlog of over 6,500 pending EB-5 petitions (I-526 petitions).  In addition to the backlog of pending cases at USCIS, approximately 500 I-526 petitions are being filed each month.

Assuming two green cards (principal investor and spouse) will be allocated for each EB-5 case, visa demand will certainly exceed the annual quota in 2014, and a growing queue will significantly impact only Chinese EB-5 investors due to the 7% per country limit.  Investors from other countries will not be affected by the queue as demand from other countries will not reach the 7% limit in the coming years.

Although the much anticipated immigration reform was expected to help this situation, immigration reform is no longer expected this year or next.

 

Since retrogression for China is inevitable, investors from China must consider the following challenges and strategize accordingly:

 

1.  Aging out. Only children under the age of 21 are eligible for green card under their parent’s EB-5 investment.  Many prospective investors mistakenly assume that the Child Status Protection Act (CSPA) freezes their child’s age from the point of I-526 filing.  However, CSPA only freezes the child’s age while the I-526 is pending.  Upon approval of the I-526 petition, the child will continue to “age” until submission of an immigrant visa application (DS-260) or adjustment of status application (I-485). If the child's "adjusted age" (true age minus the I-526 pending time) reaches twenty-one before he or she can submit an immigrant visa or adjustment of status application due to an EB-5 queue, the child will "age out" of EB-5 derivative eligibility.

 

2.  Sustaining investment until I-829 approval. I-829 application is filed 21 to 24 months after receiving conditional green card to convert the conditional green card into a permanent green card.  Since investment of the capital is usually made before I-526 is even filed, if there is an EB-5 queue for Chinese investors, the entire process from I-526 filing through I-829 approval will take several more years.  This process already takes three to four years without a queue.  If there is a queue, the problem goes beyond just waiting longer because USCIS currently requires investors to sustain the investment through the approval of the I-829 petition.  Combined USCIS’ position with the fact many regional center projects repay investors after 5 to 7 years, it becomes unclear whether repayment of the investment capital before I-829 will be treated as a disqualifying event.  At minimum, prolonged time prior to obtaining conditional resident status will prolong the investor’s return of investment and also put the investor at disadvantage in receiving job credit as regional center projects usually allocate job credit among investors in sequential order based on the date of acquisition of conditional resident status or the date of I-829 filing.

 

3.  Material change.  EB-5 businesses, including regional center projects, may undergo material changes.  USCIS is more lenient of material changes after the investor is admitted as a conditional permanent resident than material changes before admission. Material changes that occur before admission can result in denial of the I-526 petition.  Because the longer the queue, the longer it takes before the investor is admitted into the U.S., and therefore, the greater the risk is of the EB-5 business undergoing a material change prior to the applicant’s admission to the U.S.

 

4.  Direct EB-5 investment would no longer be feasible.  Investment capital has to be made at time of I-526 filing, but once there is a queue, it may be several years before the investor can enter the U.S. to manage his investment.  If the investor cannot enter the U.S., there is no one to manage the business and thus, direct EB-5 will no longer be feasible.  Starting the EB-5 business before obtaining the conditional green card may also not be a viable solution because the investor must show that he/she actively manages the direct EB-5 investment, as required by law.

 

Given the inevitable retrogression, we urge Chinese investors to invest and file their I-526 as soon as possible.  This is of even greater importance for those with children approaching the age of twenty-one.

 

 

EB-5年度限额在2014年对中国投资人的影响


自从美国移民局 EB-5 投资移民项目于1990年实施以来,每年10,000个EB-5投资人及其直系亲属的配额从来没有用完过。截止到2011财政年度,对EB-5签证的需求也从来没有达到过该 10,000 个年度配额的 40%。但是,随着逐渐升温的区域中心投资方案和来自中国地区的投资人的大量需求(占用超过80%的EB-5签证配额),EB-5 签证的使用量在2012财政年度达到了该配额的 76%,并在2013年度迅速蹿升至 85%。

在2014年,业内普遍认为该年度的10,000个EB-5签证配额将首次被全部用完,对于所有来自于中国地区的EB-5投资人,在2014年五月或六月将开始出现排队等候的现象(又称“排期”),进而导致长时间等待EB-5绿卡的状况。鉴于在2013年9月30日结束的2013财政年度EB-5的需求达到了历史最高点(8,567)和美国移民局目前尚有超过6,500份待决的积压EB-5申请(I-526申请表)等情况,EB-5出现排期的状况将难以避免。另外,除了美国移民局目前待决的积压案例,每个月仍然有大约500份I-526申请源源不断地递交到移民局。

假定每个EB-5申请案例占用两个绿卡名额(主要投资人及其配偶),则相应的签证需求将肯定在2014年超过该年度的配额。同时,由于每个国家7% 的比例限制,不断增长的排期队列将仅严重影响到中国地区的EB-5投资人。来自其他国家/地区的投资人将不会受到该排期的影响,因为其他国家/地区的需求在未来数年内将不会达到7% 的比例上限。

尽管大家期待的移民改革预计会改善这种状况,但是,未来两年内推出移民改革的可能性微乎其微。

 

鉴于针对中国地区的这种排期倒退现象从根本上难以避免,来自中国地区的投资人必须考虑以下问题并采取相应的措施:

 

1.  超龄:只有年龄小于21岁的子女可在其父母的EB-5投资移民申请下获得绿卡。许多投资人错误地认为《超龄儿童保护法》(简称CSPA)会在递交I-526申请时“锁定”其子女的年龄。但是,CSPA 仅在相应的I-526处于待决状态时才会锁定该子女的年龄。一旦相应的I-526申请获批,该子女将继续“年龄增加”,直至其提交移民签证申请(DS-260)或调整身份申请(I-485)。如果由于EB-5排期导致该子女的“修正年龄”(即实际年龄减去 I-526申请的等候时间)在其可以提交移民签证或调整身份申请前达到了21岁,那么该子女将“超龄”,并不再符合EB-5家属移民资格。

 

2. 持续投资直到 I-829 申请获批:I-829 申请表一般会在投资人获得临时绿卡后的21到24个月后递交,以转换临时绿卡为永久绿卡。由于通常是先完成资本投资,然后才递交I-526申请,所以,如果对于中国地区投资人出现EB-5排期情况,则从I-526递交到I-829获批的整个过程将比原来多出数年。即使在没有排期的情况下,该过程也需要3到4年时间。如果出现排期,加上美国移民局目前需要投资人在I-829申请获批前持续投资的要求,则问题将变得不仅仅是延长等候时间这么简单。另外,结合美国移民局的立场以及很多区域中心项目需要5到7年时间偿还投资人的实际情况,目前尚难以明确界定在I-829获批前的投资资金偿还是否会被作为违规事件而影响永久绿卡的批准。至少,获得临时绿卡前延长的等候时间将延滞投资人的投资回报,同时在创造的就业机会评分这点上将投资人置于不利的地位(因为区域中心项目通常是依据获得临时绿卡的日期,或递交I-829申请的日期来依次在投资人之间分配创造的就业机会)。

 

3.  重大改变:EB-5 投资业务,其中包括区域中心项目,可能会在施行过程中经历重大改变。相对于投资人获得临时绿卡前的重大改变,美国移民局通常对于投资人已经获得临时绿卡后的重大改变审核更为宽容。如果重大改变发生在投资人获得临时绿卡前,则可能导致I-526申请被拒。因为排期越长则意味着投资人获准进入美国的等候时间越久。相应的,EB-5 投资业务在其签证申请人获准进入美国前经历重大改变的风险也会越大。

 

4.  EB-5 直接投资将不再可行:投资资金必须在递交 I-526 申请时到位,可是一旦出现排期,投资人可能需要等候数年时间才能进入美国来直接管理其投资。如果投资人无法进入美国,则无人来管理该投资业务并因此意味着直接EB-5投资不再可行。在获得临时绿卡前启动EB-5投资业务也可能不再是切实可行的方案,原因是根据法律:投资人必须证明其本人积极地管理该EB-5直接投资项目。

 

考虑到短期内无法避免的排期倒退情况,我们真诚地促请来自中国地区的投资人尽快开始规划投资并递交其 I-526申请。对于那些带有年龄接近21岁子女的投资申请人,这点尤为迫切。