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Strategies for Dealing with EB-5 Retrogression

by Kate Kalmykov

EB-5 immigrant visa retrogression does not have to be the end of the conversation for Chinese investors. There are a few avenues EB-5 investors may explore to deal with the impending EB-5 immigrant visa retrogression, including cross-chargeability, applicant choice, country of birth, and legislative or executive relief.

Cross-chargeability

EB-5 investors with an approved I-526 petition are “chargeable” to the country in which they were born, with certain limited exceptions. Accordingly, the country of birth of an EB-5 investor normally determines the availability of his or her visa. However, one of the limited exceptions allows an EB-5 investor to be “chargeable” to the country in which his or her spouse was born. This is known as “cross-chargeability.” For example, if the principal applicant (the EB-5 investor) was born in mainland China, but his or her spouse was born in Hong Kong, the principal applicant born in mainland China may be charged to his or her spouse’s country of chargeability (Hong Kong) if the EB-5 priority date is not current for mainland China. [1] Chargeability is considered at the time of consular processing or adjustment of status.

Applicant choice

A “child” is defined in the Immigration Nationality Act as an individual who is unmarried and under the age of 21.[2] Once a child reaches the age of 21, he or she is no longer eligible for immigration benefits based on the relationship to the parent, a problem known as “aging out” (see What EB-5 Investors Need to Know About the CSPA in this feature for more information).

Accordingly, a prospective EB-5 investor with an unmarried child under the age of 21 should consider making his or her child the principal applicant (the EB-5 investor). If the EB-5 immigrant visa category does retrogress to the anticipated July 2013 cut-off date, any prospective EB-5 investor with an unmarried child over the age of 18 should seriously consider making his or her child the principal applicant (the EB-5 investor). This procedure would only be appropriate for a family whose primary goal in applying for an EB-5 visa is to receive a green card for their child. The child could eventually sponsor their parents, but only after the child obtains U.S. citizenship.

Country of birth

Oftentimes, individuals tend to forget that the U.S. government has separate visa categories for Hong Kong, Taiwan and Macau. Accordingly, an EB-5 investor, who may hold citizenship of mainland China (the People’s Republic of China) but was born in the Hong Kong Special Administrative Region of the People's Republic of China, will not be affected by retrogression of the EB-5 immigrant visa category for those born in mainland China. The same applies for individuals born in the Republic of China (Taiwan) and the Macau Special Administrative Region of the People's Republic of China.

Legislative or Executive Relief

On May 14, 2014, Aaron Schock (R-IL) and Tulsi Gabbard (D-HI) introduced H.R. 4659, which would have eliminated the per country quotas in the EB-5 category. This bill continues the trend of EB-5 related legislation, which, if enacted, would likely provide relief from retrogression of the EB-5 immigrant visa category. The American Entrepreneurship and Investment Act of 2014, introduced by Jared Polis (D-CO), along with Joe Garcia (D-FL), Matt Salmon (R-AZ) and Mark Amodei (R-NV), would also eliminate the per country quotas in the EB-5 category and remove derivative beneficiaries (spouse and unmarried children under the age of 21) of an I-526 petition from counting toward the 10,000 EB-5 visa cap. If any of these solutions are implemented, we may see relief from retrogression of the EB-5 immigrant visa category.

Some of these strategies will not be available to every EB-5 investor. However, prospective EB-5 investors and EB-5 developers should be well versed in these various aspects of immigration law. As an EB-5 developer, thorough knowledge of these various aspects may prove to be essential to securing an investment from a prospective EB-5 investor.

[1] See 9 FAM 42.12

[2] See INA Sec. 101(b)(1)

Kate Kalmykov

Kate Kalmykov

Kate Kalmykov is a shareholder at the NYC-area offices of Greenberg Traurig, LLP. Kate handles a range of immigration cases, but is particularly involved in the firm’s EB-5 practice, where she works with investors, regional centers and developers. In addition to providing a full scope of legal services for EB-5 participants, Kate is a respected speaker and regularly blogs on EB-5 issues. She is a founding member of the EB-5 Immigration Coalition.

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