EB-5 China Unavailable for Remainder of Fiscal Year 2014

On August 23, 2014, Charles Oppenheim, the Chief of the Immigrant Visa Control and Reporting Division of the U.S. Department of State, announced that effective immediately, the employment-based fifth preference (EB-5) for China would be unavailable for the remainder of the fiscal year 2014. Mr. Oppenheim explained that the maximum level of green cards and immigrant visas for China EB-5 had already been reached and that new numbers would only become available at the start of the new fiscal year on October 1, 2014.

With the exception of immediate relatives (spouses, parents, and children of U.S. citizens), federal law limits the number of green cards and immigrant visas that can be issued each year. Under current law, the government can only issue 226,000 green cards and immigrant visas to preference immigrants sponsored by a family member, and 150,241 for employment-based immigrants.

Complex rules further limit the number of green cards and immigrant visas available to prospective immigrants based on the nature of the relationship (if sponsored by a family member), the qualifications of the immigrant (if employment-based), and the country of birth of the immigrant, amongst others. For example, only 7% of the total allotted green cards and immigrant visas issued in any particular fiscal year can go to immigrants from one country. Therefore, immigrants from China, India, Mexico and the Philippines (countries that have historically sent many immigrants to the U.S.) typically have to wait a long time to obtain green cards and immigrant visas because the annual allotment for their specific country and category gets used up quickly.

The U.S. Department of State publishes a Visa Bulletin each month, indicating when prospective immigrants can apply for green cards and immigrant visas. In many cases, the wait time may be years or even decades.

Entrepreneurial immigrants applying through the EB-5 preference category have historically not had to wait before applying for their green cards or immigrant visas, because the annual allotment for this category has never been reached. The EB-5 preference category was created by Congress in 1990 to stimulate the U.S. economy through job creation and capital investment by foreign investors. Prospective immigrants that invest $1,000,000 in a US business (or $500,000 in certain targeted areas with high unemployment) which leads to creating or preserving at least 10 full-time jobs for qualifying US workers may apply for green cards or immigrant visas in the EB-5 category.

As a result of the success of the Chinese economy, many immigrants from China have invested in U.S. businesses and have obtained green cards through the EB-5 program. In 2013, Chinese immigrants accounted for more than 80% of all EB-5 investors. Consequently, for the first time in the history of the EB-5 program, the maximum allotment for green cards and immigrant visas for Chinese investors has been met and the preference category will remain unavailable until the start of the new fiscal year on October 1, 2014.

Luckily, the negative impact of the unavailability of green cards and immigrant visas for EB-5 China is relatively small. Prospective immigrants that have already been scheduled for an immigrant visa interview at a U.S. Consulate abroad likely have already been allotted a visa number for potential use in their case and can receive an immigrant visa as soon as their case is approved, regardless of whether it is before or after October 1, 2014. Those who are in the U.S. and have already filed a green card application (Form I-485) with the U.S. Citizenship & Immigration Services (USCIS),will have their applications automatically placed in a “pending demand” file until October 1, 2014, meaning that their applications will be put on hold until the government has new numbers available.

Further, Mr. Oppenheim clarified that the USCIS may continue to accept new green card applications for EB-5 China even though the numbers are currently unavailable, but will simply have to put them on hold until October 1, 2014. It should be noted that the Visa Bulletin for September 2014 incorrectly reflects that the EB-5 China category is still available. This is a result of the fact that it was published several days before the numbers for this category unexpectedly ran out.

If you have questions about the EB-5 program, or how the unavailability of numbers for EB-5 China will impact your case, please contact an attorney at Minsky, McCormick & Hallagan, P.C.

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