Chinese emigrants who have obtained residency permits or citizenship abroad but have not cancelled their Chinese household registrations, beware! It is mandatory for Chinese citizens who settle in other countries to cancel their household registrations (also known as “hukou”) before emigrating. A hukou is a record in the system of household registration, which is required by law in the People’s Republic of China. A household registration record officially identifies a person as a resident of an area and includes identifying information such as name, parents, spouse, and date of birth. Recently, China’s Ministry of Public Security began targeting more than 150 Chinese “economic fugitives” living in the United States as part of its anti-corruption efforts.
“This measure is an effective step to curb and fight corruption,” said Dai Peng, director of the criminal investigation department of the People’s Public Security University of China. The corruption referred to relates to a holder of a hukou, who is eligible to receive benefits such as medical insurance and pensions, will transfer their illegal earnings to their family overseas before leaving China themselves. Police officers in China have been informed to pay attention to people who frequently travel to and from China, or send a large amount of funds to overseas accounts.
According to Liao Jinrong, director general of the ministry’s newly created International Cooperation Bureau (ICB), “the U.S. has become the top destination for Chinese fugitives fleeing the law.”
Accordingly, in July, the ministry appealed to the public to volunteer information regarding emigrants maintaining their hukou. From 2013 to June 2014, the ministry cancelled 1.06 million hukou that were still illegally registered by Chinese citizens.
How does this relate to EB-5?
While EB-5 applicants come from all over the world, China has recently emerged as the global leader in approved I-526 petitions. Representing just 12 percent of all approved applicants in 1992, Chinese applicants now comprise 86 percent of all approved petitions. Specifically, between FY2009 and FY2013 Chinese applicants accounted for 8,732 I-526 approvals (Note: The country with the second highest number of I-526 approvals during the same period: South Korea with 630 approvals).
As every Chinese applicant’s goal is to eventually become a permanent resident of the United States, it is vital that they be made aware of the Chinese hukou law, which they must comply with, regardless of whether they fall into the “economic fugitives” category or not. The use of a Chinese emigration agency may help Chinese applicants avoid ignorance of the hukou law. Chinese emigration agencies work closely with local Chinese government Public Security Bureau Entry & Exit Administration Departments, who administers the Chinese applicant’s hukou. Therefore, generally, the agencies will educate the applicant on the mandatory surrender of their hukou. However, whether a Chinese applicant uses an emigration agency or not, they should educate themselves on the process and impact that becoming a permanent resident of the United States will have on both them and their families.
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