President Obama recently announced proposed changes in immigration policies that impact immigration, with many that may specifically influence the EB-5 Program. The purpose of this article is to outline the measures that could impact EB-5.
On the President’s trip to China he announced that Chinese nationals would be eligible to apply for a 10-year tourist visa. This has caused some Chinese to think that there is no reason to apply for residency via EB-5. This reasoning is incorrect for a few reasons. First, while the individual is eligible to receive a visa for 10 years, it does not mean that the person will receive a visa for 10 years. The consulate may choose to issue it for one year. Second, an entry on a tourist visa is for six months. And, third – most importantly – a tourist visa allows a person to vacation in the United States. That person cannot study or reside permanently in the United States. Thus, the EB-5 classification should still be pursued if an individual desires to reside or study in the United States. Next we move to the most recent Executive Action on Immigration by the President.
On Nov. 20, 2014, President Obama outlined changes that would take place without regulatory change, with regulatory change, and a Presidential Memorandum on Visa Modernization. The proposed changes that could potentially impact EB-5 are discussed below.
As it relates to Administration Guidance without New Regulation, it appears that there will be no significant impact on EB-5 as the majority of those changes relate to other visa classifications or those that have been in the United States since Jan. 1, 2010.
With respect to Regulatory Changes through the Administration Procedure Act, there are two key points that could provide a benefit to the EB-5 investor. First, is the goal to enable entrepreneurs to be paroled into the U.S. and work if they are researchers, inventors or founders of businesses. The EB-5 community needs to insist that this should apply to EB-5 investors, as by definition they are “alien entrepreneurs.” If this were to apply to EB-5 investors, then the investor would be permitted to enter the U.S. even before the residency was approved. This would be a tremendous benefit to the investor and family1.
Second, and having a similar impact as the first, is “early adjustment.” This would enable individuals who are eligible to apply for adjustment of status, but for a non-current priority date, to file for adjustment and receive work authorization and advance parole. Therefore, if the I-526 petition were approved, the EB-5 investor and family could file for adjustment of status and receive the above-mentioned benefits. The EB-5 community needs to ask the administration to also allow for EB-5 investors outside the United States to receive the same treatment as those inside the United States who file for “early adjustment.” In the context of the residency process for a foreigner married to a U.S. citizen, if an I-130 is filed for the foreigner who is outside the U.S., the foreigner can file for a K-3 visa to enter the United States while waiting for the residency process. Something similar should be extended to those EB-5 investors outside of the United States. Lastly, we move to the memorandum.
The Presidential Memorandum on Visa Modernization has two points that could positively impact EB-5 investors. First, there is a possibility of recapturing permanent resident numbers based on numbers allocated by Congress but left unused. So, in effect, the additional visas would be carried over to the next year’s available numbers. Therefore, if there is over demand based on the number of visas allocated to EB-5 in one specific year, there exists the possibility that the unused visas from previous years could be used in order to better effect Congressional objectives. This would have a large impact on EB-5 especially if the President allowed the State Department to go back five (5) years or more and recapture the thousands of unused immigrant visas in the EB-5 classification during those years. This would, in effect, ensure there would not be retrogression this year.
Second, and even more impactful, is the possibility of not counting derivative spouses and children toward the Eb-5 visa quota. Currently, when an EB-5 investor files for and has an approved I-526 he and his family count again the 10,000 EB-5 immigrant visa cap. Assuming that the average is three (3) in a family (husband, wife, and child), this means that only 3,333 investors could receive their residency in any given year. However, if the derivatives are not counted, it is clear how that number would be tripled to 10,000 investors. This impact is huge in that it would also substantially reduce the risk of retrogression in the EB-5 classification.
It is important to note that President has set a goal of 120-180 days for the Presidential Memorandum on Visa Modernization. Thus, we are hopeful to see some guidance within the next six months.
The President has set forth some proposed changes that could positively impact the EB-5 community. It is now up to us to lobby the administration to follow through on those proposals so that EB-5 remains strong for businesses and investors.