There’s little doubt that long visa backlogs affect the demand of potential EB-5 investors and the supply of EB-5 capital to U.S. businesses. The defeated “EB-5 Reform Act” didn’t address this important issue, which should be central to any meaningful changes to the EB-5 program, though they don’t appear in proposed regulatory reforms either. Failure to provide relief threatens the continued viability of the EB-5 program. Here are five things to know about the EB-5 visa backlogs.
1. Visa Bulletin Updates Every Month. Every month, the U.S. Department of State (“DOS”) releases a Visa Bulletin that indicates when immigrant visa applicants, based on the priority date listed in a Form I-526 approval notice, should be notified to assemble and submit required documentation to the National Visa Center. The Visa Bulletin for each month is usually released during the second week of the preceding month.
NOTE: Unless the EB-5 Regional Center program continues to be authorized by Congress – it is currently authorized through September 30, 2018 – DOS is unable to issue immigrant visas to EB-5 investors who invested through regional centers, which is why the April 2018 Visa Bulletin indicates “unavailable” for the I5 and R5 categories. However, this visa bulletin also states: “If there is legislative action extending them for FY-2018, the final action dates would immediately become “Current” for April for all countries except China-mainland born, which would be subject to a July 22, 2014 date.”
2. EB-5 Visa Backlog for Chinese Investors. We’ve written extensively on this, including the causes and some solutions. The April 2018 Visa Bulletin indicates that only China-mainland born nationals who filed a Form I-526 before July 22, 2014 (the current “Final Action Date”) may move forward with the immigrant visa process. This date – July 22, 2014 – has been the Final Action Date since October 2017. For the thousands of China-mainland born nationals who filed after this date, keeping up with the monthly Visa Bulletin is critical.
Perhaps most troubling – and least understood – is that the Chinese Student Protection Act of 1992 reduces the number of EB-5 visas allocated to China-mainland born nationals by 700. In effect, because a “per-country” limitation has been imposed for Chinese EB-5, this reduces the number of visas allocated to China-mainland born nationals at the beginning of each fiscal year to -4. Only additional EB-5 visas unused by other countries in each fiscal year allow DOS to issue immigrant visas to EB-5 investors and their derivative beneficiaries. As EB-5 from the rest of the world (“ROW”) grows, the number of immigrant visas issued to Chinese EB-5 families will decrease.
3. EB-5 Visa Backlog for Vietnamese Investors. Earlier this month, the U.S. Consulate in Ho Chi Minh City, Vietnam caused a small scare when it reported it would stop issuing immigrant visas to EB-5 investors until the Regional Center program was extended; for the reason stated in #1 above, this was expected. The bigger issue is that demand for EB-5 in Vietnam has become so large that a Final Action Date will soon be imposed. In January 2018, we blogged about this possibility, and the April 2018 Visa Bulletin confirms: “The oversubscription of this category will definitely occur for May.” We anticipate this Final Action Date in May 2018 to be the same as it is for China – July 22, 2014. In October 2018, when a new allotment of EB-5 visas are available, a new Final Action Date will be imposed, which we anticipate being at the end of 2015. We should be hearing more from DOS on this in August 2018.
4.Backlogs Between Countries and Priority Dates. When Final Action Dates have been imposed on multiple countries (e.g., China and Vietnam), INA § 202 requires any unused visa numbers to be allocated in order of priority date, regardless of country of origin. This means that DOS must first “clear out” the Chinese EB-5 backlog and issue thousands of immigrant visas to China-mainland EB-5 investors who filed Form I-526 petitions in the second half of 2014 and prior to September 30, 2015 prior to issuing immigrant visas to Vietnamese investors who filed Form I-526 petitions more recently. The same would be true for nationals of any other country where a Final Action Date for the EB-5 category is imposed.
5. EB-5 Reforms. With the EB-5 Regional Center program now authorized to September 30, 2018, it is an appropriate time for stakeholders to educate Congress about this serious problem and to push for solutions to clear the EB-5 visa backlog and maintain demand for a viable and vibrant EB-5 Program. It is time to bring the EB-5 Program into the 21st century and create reasonable immigration levels for EB-5 investors in a consistent, predictable manner that match our country’s immigration and economic priorities.