The Impact Of EB-5 Visa Retrogression

April 12, 2016

Chinese nationals hoping to enter America through the EB-5 investor visa program now face a very long wait due to retrogression.

Chinese nationals hoping to come to America through the EB-5 investor  visa program will now find themselves waiting in a very long line as a  policy of “retrogression” has been instituted. This is despite the fact  that EB-5 investors have preserved or created hundreds of jobs over the  years and contributed a whopping $2 billion to the American economy in  2012 alone (according to White House data).

What is the EB-5 program?

Essentially, the United States government, through authority granted  by the Immigration and Nationality Act, sets aside a certain number of  visas annually for employment-related purposes, to be divided between  different visa categories (EB-1, EB-2, EB-3, E-1, E-2, etc.). Of the  employment-based visas available, only 7.1 percent of them are directly  allotted to the EB-5 investor visa program,  and any one country can only receive 7 percent of those, with  additional visas being optional for some if there were “leftovers” from  other countries that didn’t have sufficient applicants to meet their  allotment.

The EB-5 visa program was once little used, but that has turned  around since 2008; the program has grown in popularity exponentially  since then. With the growth of the Chinese economy in recent years, the  ability of that country’s citizens to branch out and invest in American  businesses has likewise increased. In fact, Chinese nationals have  represented 80 percent of EB-5 investor visas for several years, and  that number was expected to grow in 2015.

What is retrogression?

In October of 2014, Charles Oppenheim (Chief of the Visa Control and  Reporting Division of the U.S. Department of State) announced that the  EB-5 program would undergo dramatic changes as of May 2015. The most  significant of these would be to “retrogress” the EB-5 China visa  category two years. This means that applicants whose applications have a  priority date on or before May 1, 2013, would be considered for the foreseeable future. Applications with a priority date after then would  only be evaluated once all the prior ones were completed.

Possible congressional intervention?

Back in January, Congressmen Jared Polis (D-Colorado) and Mark Amodei (R-Nevada) introduced House Bill 616: American Entrepreneurship and Investment Act of 2015. The bill would, if passed, do away with the need for retrogression of  Chinese investor applications by more than doubling the cap to which  individual countries wishing to take advantage of the EB-5 visa program  are subjected (increasing it from 7 percent of employment-based visas to  15 percent).

H.R. 616 would also change the way in which spouses, children and  other so-called “derivatives” are treated for purposes of the visa cap.  Currently, investors are viewed alongside their dependents for visa  purposes, thus limiting the number of investors who can take advantage  of the program. The bill contains language that clarifies the role of  investors versus derivatives when calculating visa totals, thus opening  the door for more potential investment in American enterprises.

Unfortunately, H.R. 616 has languished in committee since January.  According to GovTrack.US, it has a “0 percent chance of being enacted”  into law anytime soon.

What does the retrogression mean for potential EB-5 applicants?

Retrogression could have a serious “chilling effect” on Chinese  nationals interested in investing in domestic companies as a way to come  to America. Unless applicants have a priority date of May 1, 2013 or  before, their applications will be in legal limbo for a currently  indeterminate time. This doesn’t necessarily mean that all immigration  avenues are closed to these people, however. For more information about  whether a different visa category might be an option, seek the advice of an experienced immigration law attorney.

To learn more or to speak to a lawyer, contact C.T. Lee & Associates, in New York City by calling 800-494-3809.

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