By Anayat Durrani
During China’s zero-Covid policy and subsequent lockdown, investment immigration consultancies saw a surge in inquiries from nationals seeking to relocate their families to other countries for better opportunities. One program that has witnessed this in particular is the EB-5 Investor Program, which has seen the greatest interest by Chinese nationals.
“We have seen more activity in China this year than we have in the past five years,” says Wenbo Yang, director of China for FirstPathway Partners.
Yang says one reason is the EB-5 Reform and Integrity Act of 2022 (the RIA). He says another reason the China market is heating up again is due to the end of China’s COVID-19 lockdown and policies.
“Traveling is much easier than before and Chinese are eager to travel,” says Yang.
After the U.S., China has the second-largest number of ultrarich nationals, with more than 32,000 individuals reporting wealth that exceeds $US50 million, per a Credit Suisse report. Mainland China has more HNWIs than any other country in Asia. The country’s number of HNWI population grew by 5% between 2020 and 2021, despite economic challenges, per a report by Deutsche Bank.
In the EB-5 market, China continues to hold its top spot with 6,125 EB-5 visas issued of 10,885 total in 2022, per data from the State Department.
In the 2010 to 2019 period, millionaires from China obtained more than 70% of the total of 81,125 investor visas issued by the US, per research by Prof. Dr. Yossi Harpaz.
Impact of RIA on the Chinese EB-5 market
The EB-5 Reform and Integrity Act of 2022 is credited with bringing a surge of interest in the EB-5 Immigrant investor program. Yang says with the 32% of EB-5 visas set aside for the new queue, Chinese investors won’t need to wait in the existing backlog queue.
“It is estimated there are over 50,000 China born investors in the unreserved backlog queue. The new set aside queues for rural, high unemployment, and infrastructure have given Chinese investors an opportunity to enter a new line without the long wait,” says Yang.
Edward Beshara, managing partner of Beshara P.A. says he has seen a resurgence of interest from Chinese EB-5 investors based upon the new set aside provisions stated in the Visa Bulletin and most recently as of May 2023. He says as of May 2023 Visa Bulletin, the EB-5 category is Current (C).
“Therefore, if the EB-5 investor files their EB-5 petition under the set aside category, there is no retrogression and the EB-5 visa process is currently available,” says Beshara.
The RIA brought forth special set asides that include 20% or 2,000 visas per year for rural projects and 10% or 1000 visas for TEA projects.
“These set asides enable Mainland Chinese nationals to be current for a period of time in investing in these projects and also receive priority processing,” says Ronald R. Fieldstone, Esq., Saul Ewing LLP.
He says pre-RIA investors do not get this benefit and are subject to a multi-year retrogression.
“As a result, especially for rural projects that already have two years of visas for the current and past fiscal years together with excess visas that add on to these numbers, the demand for these investment opportunities has increased dramatically,” says Fieldstone. “Many of the rural projects are in high end markets that make the opportunity that much more attractive.”
Beshara says the new provision of the RIA also allows concurrent filing, for those EB-5 investors who are in the U.S.
“That is, if the EB-5 investor from China is currently in the U.S. in a non-immigrant status, at the same time they are filing their EB-5 petition, they can concurrently file their Applications for Conditional Residency,” says Beshara.
Yang says most of his meetings with Chinese investors are with parents who have kids studying in the U.S.
“International students can now stay in the U.S. after they graduate and have better prospects for employment,” says Yang. “This is a game changer for Chinese students.”