Charles Oppenheim, the Chief of the Visa Control and Reporting Division of the U.S. Department of State (DOS), publicly stated that the EB-5 immigrant visa category would likely retrogress in July 2015. Additionally, Mr. Oppenheim predicted that when the EB-5 immigrant visa category retrogresses during the U.S. government’s 2014-2015 fiscal year (October 1 to September 30), the DOS will establish a cut-off date of July 2013. This could effectively establish an approximately two-year wait time for EB-5 investors to apply for immigrant visas after receiving approval of their I-526 petitions.
A bit of background: the Immigration and Nationality Act (INA) establishes the number of immigrant visas that may be issued to individuals seeking permanent resident status each year. The EB-5 immigrant visa category is limited to 10,000 during the course of each fiscal year. Additionally, no one country may take more than 7 percent of the allotted number of immigrant visas each fiscal year. However, countries with demand in excess of 7 percent of the allotted number of immigrant visas for an immigrant visa category may capture unused demand of other countries during each fiscal year. This is how Chinese nationals are able to take up an overwhelming majority of the 10,000 EB-5 immigrant visas allotted each fiscal year.
Unfortunately, demand from Chinese nationals is now exceeding the unused demand of countries. When demand for the EB-5 immigrant visa exceeds the allowable numbers, by law the DOS must impose a cut-off date, which would be listed on the DOS monthly visa bulletin. When this occurs, only EB-5 investors who have a priority date earlier than the cut-off date (the date listed in the monthly visa bulletin) may be given an immigrant visa number. A priority date is listed on an EB-5 investor’s I-526 Petition Receipt Notice received from USCIS once his or her I-526 petition has been filed. Generally, the priority date will match the date the I-526 petition was filed.
By way of example, if the EB-5 immigrant visa category retrogresses in July 2015 and the DOS imposes a cut-off date of July 2013, all EB-5 investors with approved I-526 petitions that have priority dates prior to July 2013 would be able to apply for an EB-5 immigrant visa. However, all EB-5 investors with approved I-526 petitions with priority dates after July 2013 would not be able to apply for an EB-5 immigrant visa. These individuals would have to wait until such time as their priority date was prior to the cut-off date listed in the monthly visa bulletin to apply for an EB-5 immigrant visa.
We will finally see retrogression of the EB-5 immigrant visa category in the U.S. government’s 2014-2015 fiscal year. Primarily this will be due to the increased volume of I-526 petition approvals by the U.S. Citizenship & Immigration Services (USCIS) and because derivative beneficiaries of each EB-5 investor (generally spouses and unmarried children under the age of 21) account for approximately 2/3 of all EB-5 immigrant visas issued each fiscal year. For example, Mr. Oppenheim is basing his predictions off the assumption that there are roughly 3,333 principal investors applying for EB-5 immigrant visas each fiscal year, with the remaining 6,667 EB-5 immigrant visas filled by EB-5 investor spouses and unmarried children under the age of 21. Thus, simply removing derivative beneficiaries from the EB-5 immigrant visa cap would free up approximately 6,000 EB-5 immigrant visa slots for EB-5 investors, which would have the effect of increasing job-creating foreign investment in the United States.