I have just returned from 2 weeks in China. Not surprisingly, there was not a lot of interest in discussing new EB-5 projects. Especially since the publication of the DHS Ombudsman’s report, the word is out that the waiting list for EB-5 is in excess of 10 years…and getting longer. The word is also out that a solution is not likely to come from EB-5 legislation.
The options for the Chinese investor are limited, and we discussed all of them in the 7 cities that I visited. Here they are – – the new world for Chinese investors interested in immigrating to the U.S.:
- There is some interest in EB-5 (a small percentage of previous demand) on the part of investors who are willing to wait as long as necessary for their numbers to be reached. These investors generally have pre-teen children.
- There is keen interest in the option of investment in a “set aside” area (a rural or urban distressed project). New legislation likely will set aside 3,000 of the 10,000 visas for investments in these areas, which might enable investors to eliminate or significantly shorten the waiting period. Investors interested in this option include new EB-5 investors and EB-5 investors who are already on the waiting list and who are at least considering making a further investment in order to achieve their U.S. immigration goals, which often involve the education of their children.
- EB-1C is the employment-based green card category for multinational managers. There is presently no quota waiting list for Chinese nationals. However, only a limited number of would be EB-5 investors would likely qualify. It may well be a good option for the investor who manages a very sizable company in China and will acquire a very sizable company in the U.S. and actively manage that company. This is not a good option for a Chinese national who wants to start up a company or who has a small company in China. Those of us who practice all aspects of immigration law know that EB-1C adjudications by USCIS have been unprecedentedly restrictive in recent times. Many investors who pursue this option will likely be disappointed.
- Grenada citizenship/E-2 visa is the hot topic in China. Within about 6 months, this option can result in an investor obtaining an E-2 visa that is good for 5 years and renewable indefinitely. This E-2 visa enables the children to go to public or private schools or universities; enables the investing spouse to actively manage the business in the U.S. or hire a manager; enables the non-investing spouse to work anywhere he or she wants in the U.S.; enables the investor to spend as much or as little time in the U.S. as he wishes; and, if he spends a smaller amount of time in the U.S., enables him to avoid taxation on worldwide income. The total investment amount to accomplish this result – – between Grenada and U.S. – – can be as little as $400,000. The U.S. investment can be a down payment on a direct EB‑5. With the EB-5 investment amount likely to increase to in excess of $1 million for most investors in 2018, this becomes an even more attractive option. For those investors interested in this option, we have put together a turnkey solution that includes introduction to a Grenadian agent, introduction to various business opportunities that qualify for E-2 visas, preparation of the E-2 business plan and all immigration legal services relating to preparation of the E-2 visa application and preparation for the E-2 visa interview.
- For some EB-5 investors, the last ray of hope is the possibility of federal court litigation challenging the U.S. Department of State’s counting of family members against the EB-5 quota rather than issuing visas to 10,000 investors per year as the law seemingly provides. Scores of EB-5 investors are in the process of providing seed funding for this litigation with many agents, regional centers and developers prepared to add financial support to the litigation. Although the legal arguments are strong, the chances of success are highly speculative given the federal courts’ reluctance to overturn a longstanding, unchallenged government action unless the government position is clearly incorrect. Many in the EB-5 community agree with me that, even if the chances of success are not high, the potential benefits are so significant that the litigation is very much worth pursuing.