Has the United States stopped EB-5 investor visa applications? An American lawyer's analysis

On 23 August 2014 Charles Oppenheim, who chairs the immigrant visa control and reporting division of the US Department of State, announced that the quota for EB-5 immigrant investor visas had been used up, with effect from that day. The decision was announced during the China issues meeting held the previous Saturday at the American Immigration Lawyers Association's EB-5 investor immigration conference in Chicago. The minutes of the meeting are to be published on the Association's Agora website.

The warning carries the following deeper information and practical significance.

The first point to note is that no cut-off date has yet been set for Chinese EB-5 investor visas. At the same time, the position in the September 2014 visa bulletin, that numbers remain available for Chinese EB-5 investor visas, is unchanged. This is therefore not a visa queue.

"No numbers available" means that, for the first time in the twenty-five years since the EB-5 programme was created, the whole of the quota for Chinese applicants has been used and the maximum reached. At the same time, on the allocation basis that governs fiscal year 2014, ample numbers remain for countries other than China.

On 1 October 2014, the first day of fiscal year 2015, 10,000 new numbers will be released, and there will accordingly be no substantive effect for most Chinese applicants whose applications can be approved within the next six to eight months.

EB-5 visa interviews scheduled for August and September 2014 will go ahead as normal, because numbers have already been allocated to the applicants concerned, and visas will be issued as normal in August and September to applicants who qualify. (In theory a possible exception is an applicant having a "second interview" in August or September, for example because the documents at the first interview did not establish eligibility.) If they are approved they will wait until at least 1 October to receive their visas.

An immigrant visa is valid for six months from the day it is issued. An applicant should make sure to enter the United States before the visa expires; it is most unlikely that a replacement visa could be applied for and used after the six months have run.

Before it begins to adjudicate, US Citizenship and Immigration Services does not ask the government how many immigrant visas are available for applications to adjust status on Form I-485. If no numbers remain at that point, the Service will suspend and hold the application until numbers become available.

Adjustment of status for EB-5 investor visas will be processed as normal by US Citizenship and Immigration Services; numbers for Chinese EB-5 visas, however, will begin to be allocated after 1 October 2014, at the start of fiscal year 2015.

An applicant from the Chinese mainland who, by reason of marriage or otherwise, may be counted as an applicant of another country (Hong Kong, China, Macao, China, Canada, France and so on) may apply in August or September to have the visa issued under that other chargeability; where the numbers for those countries are also all but exhausted, however, that cannot be guaranteed either.

Because the visa bulletin has not been amended, qualifying Chinese EB-5 applicants may continue to apply to adjust status in August or September 2014.

Why does this announcement matter so much, when other employment-based and family-based categories have long had queues? Because this is the first time in the history of the EB-5 investor visa that the annual limit has been reached, and because the US government recognises that Chinese EB-5 demand tends to exceed the quota, and will begin to set a cut-off date at the earliest in May 2015, that is, at the end of the third quarter of fiscal year 2015.

The announcement is all the more significant because Leon Rodriguez, the new director of US Citizenship and Immigration Services, has said that EB-5 demand has risen by 700 per cent since 2007, which will lead to a cut-off date being set for Chinese visas in fiscal year 2015.

It is hard to say what the interval will be and when it will be announced; most probably May 2015. The queue is estimated at two years. As most I-526 petitions take fifteen or sixteen months, and requests for further evidence are extremely common, an additional six months' wait has not so far caused undue concern. What is of concern is that once a cut-off date for Chinese EB-5 visas is fixed, the Department of State must move it backwards in the light of the number of petitions approved, and the date may thereafter not advance each month. With more than 10,000 petitions now in process at the Service, and some 3,000 filed in the quarter ending 30 June 2014, the queue is very likely to lengthen.

The consequences of the announcement include the possibility of children ageing out and questions about the period allowed for creating new jobs, at present thirty months from approval of the I-526 petition and thirty-six months from the grant of the conditional green card (at the I-829 stage). Because of the delay in issuing immigrant visas to Chinese EB-5 applicants, business plans may need substantial change.

In summary, for Chinese applicants who filed long ago and are awaiting adjudication the news has little effect; but the statements of the Department of State and of Mr Oppenheim at the Association's EB-5 conference in Chicago foreshadow that, once a cut-off date is set during fiscal year 2015, Chinese EB-5 investor applicants will be greatly affected.

At the conference in Chicago and in informal discussion afterwards, Mr Oppenheim also observed that much of what he encounters about the visa allocation system misuses the technical terms, and he therefore offered the following distinction between "oversubscribed" and a "queue", not for EB-5 alone but for other categories as well:

Oversubscribed: a category that was "current" but for which more visa numbers will be needed in future, so that a cut-off date must be set. The cut-off may be worldwide, or may apply only to certain countries or certain categories.

Retrogression: a cut-off date already exists, but more numbers will be needed in future, so that next month's cut-off date is earlier than this month's.

By way of example:

Oversubscribed: a particular immigrant visa category was "current", but at some point in fiscal year 2015 a cut-off date of month X is required, so as to keep the numbers issued within those available.

Retrogression: this month's visa bulletin shows a cut-off date of 1 January 2012, but the level of demand shows that the numbers available next month will not meet the number of visas needed. Next month's cut-off date should therefore be set at 1 July 2011.

Legal notice: the original author of this article is Bernard Wolfsdorf (in cooperation with the EB-5 committee of the American Immigration Lawyers Association). Please do not republish without authorisation.