Impact of Projected EB-5 Quota Retrogression for China

Posted by on 8:05 pm in Articles | Comments Off on Impact of Projected EB-5 Quota Retrogression for China

Based on the demand for EB-5 visa numbers during 2013 and the volume of approved I-526 petitions at the National Visa Center, the Department of State has provided the AILA EB-5 and DOS committees with tentative projections for movement in the EB-5 category during the rest of the 2014 fiscal year. The forecast is somewhat murky given the low “visibility” at USCIS, meaning that there is limited information available regarding how many visa numbers USCIS will request, a challenge that is exacerbated by the substantial I-526 backlog and the fact that I- 526 petitioners and their dependents cannot concurrently file for adjustment of status. With that in mind, the Department of State has advised the following:

  • If demand continues at the current pace, a cut-off date may need to be established for China, which accounts for more than 80% of total number usage. No other countries in the EB-5 category will be impacted. (It should be noted that in December 2012, the State Department predicted the establishment of a cut-off for China EB-5, but this never occurred because of the slow pace of I-526 approvals.)
  • If a cut-off date is established, it will not likely take effect until July 2014 at the earliest and is more likely to occur in August or September 2014. It is possible that numbers will again become current for some period of time at the onset of the new fiscal year on October 1, 2014.
  •  Of the cases at NVC:
    • 966 have priority dates in 2011;
    • 2,969 have priority dates in 2012; and
    • 813 have priority dates in 2013.
      Therefore, depending on how quickly USCIS reduces the I-526 backlog, the EB-5 cut-off date may need to be retrogressed more than one year.
  • All EB-5s are created equal; the cut-off would apply to China EB-5 across the board, with no distinction between regional center and direct EB-5 petitions.

In anticipation of this potential quota retrogression, the AILA EB-5 Committee suggests the following:

  1. Carefully monitor investors with children who may “age out.” 
    The Child Status Protection Act (CSPA) freezes the age of children who are derivative beneficiaries of an I-526 petition while the petition is pending. However, once the petition is approved, the child’s age is no longer frozen if the conditional residence  cannot be completed because the quota is not current for that investor. A Chinese investor with children nearing age 18 or older will want to freeze the child’s age for as long as possible if China EB-5 priority dates retrogress. The longer the time the I-526 is pending, the longer the time the child’s age is frozen. Thus, it will be beneficial for certain Chinese nationals who have children close to “aging out” to have the I-526 petition adjudication process take longer. For this reason, it would be advantageous for a Chinese national to receive a  Request for Evidence and to delay responding to the RFE until the latest possible date.

    China EB-5 priority date retrogression will make it imperative for counsel to carefully track the ages of a petitioner’s children, to encourage prompt I-526 filing, and to strategize how to prolong the I-526 petitioning process if a child is close to “aging out.” It will also be imperative for counsel to make certain that the immigrant visa is applied for within one (1) year of the priority date becoming current, in order to benefit from the period of time the child’s age is frozen during the petitioning process under the CSPA.

  2. Develop alternative strategies for direct EB-5 investors.

    In a direct EB-5 investment, the investor is often the manager of the investment. Quota retrogression may delay for years the ability of Chinese nationals to immigrate after filing the I-526 petition and therefore to start up the business. The Chinese national cannot obtain an E-2 visa as there is no investment treaty with China. An investor who cannot immigrate to the United States for many years because of quota retrogression may not be able to demonstrate that he will be able to manage a direct EB-5 investment and may need to either find someone else to manage the business or develop a nonimmigrant visa strategy to come to the U.S. to start up the business.

    Additionally, the investor must demonstrate that the commercial enterprise will employ no fewer than 10 qualifying employees within 2ó years of I-526 petition approval. A comprehensive business plan must be submitted with the visa petition demonstrating that the qualifying employees will be employed within that time period. It will be difficult to produce a credible business plan when an investor has no idea of when he will be able to immigrate to the United States.

  3. Advise clients regarding regional center project issues.

    Many regional center projects involve loans from the new commercial enterprise to the EB-5 project. These are often 5 year loans premised on all investors receiving conditional permanent residence before the loans are paid back. Investor clients should be advised that changes to loan agreements may be required and that such changes may affect their exit strategies. On the other hand, regional center projects would have longer periods of time in which to create the requisite jobs in the event that quota retrogression delays the onset of the conditional residence period of the investors.


Summary of a few immigration reform proposals

Posted by on 4:06 pm in Articles | Comments Off on Summary of a few immigration reform proposals

Over the past few months, numerous proposals have been advanced in several pieces of legislation collectively referred to as Immigration Reform.  Relevant areas of discussion for HR include shortening quota backlogs to decrease the wait time of obtaining certain employment based green cards, and of making more visas available to those that are highly skilled workers and who are in high demand in the U.S.   Proposed changes have included eliminating country-specific limits on the employment visas, which for certain countries (like China and India) have created significant wait times that can last up to ten years. Adding new visa categories for highly skilled, exceptionally talented immigrants, and those with advanced degrees in Science, Technology, Engineering & Math (STEM) from U.S. universities.  After they graduate, STEM graduates may be exempt from visa quota limitations and the labor certification requirement.

Congress is considering new visa options for foreign investors.  One proposal is for a new X visa which may provide a nonimmigrant investor visa for entrepreneurs that have attracted a $100,000 investment or have created three jobs and generated $250,000 in revenue annually. This bill also creates an EB-6 immigrant investor visa that will lead to Permanent Resident Status (“green card”). It would allow a visa to those that have taken a significant part in the start-up and ownership of the U.S. based business, and created five jobs that had received more than $500,000 in funding—or created five jobs and generated $750,000 in annual revenue in the prior two years.

Top 5 tips for HR Managers during the Government Shutdown

Posted by on 4:00 pm in Articles | Comments Off on Top 5 tips for HR Managers during the Government Shutdown

Immigration reform continues to have broad support in Congress but has been overshadowed by efforts to end the government shutdown.  Until additional government funding is appropriated, it seems unlikely that much progress will be made on other legislation pending the U.S. House of Representatives, including Immigration Reform.

Top 5 tips:

1.You may Continue to Hire and Sponsor Employees for Visas and Immigration

USCIS is self-funded by user fees, so USCIS offices will remain open and continue to accept and process visa and immigration cases during the shutdown.  Other Homeland Security agencies such as E-Verify, the on-line system which allows businesses to verify employment authorization of its new hires, however, is shut down because it is federally funded.

2. File H-1B Petitions Well in Advance and Be Prepared for Delays

The Department of Labor (DOL) has stopped accepting and processing Labor Condition Applications (LCA) filed by U.S. employers nationwide seeking to obtain H-1B visas for their foreign born professional employees.  The problem is that USCIS has expressly and repeatedly stated that it will not accept or process H-1B petitions filed without an LCA certified by DOL. USCIS is now considering whether to modify this rule.  Other visa classifications should be considered because other visas generally do not require processing by the U.S. Department of Labor.

3. Employees may Continue to Travel Internationally

The State Department has reported that it will continue to accept and process visas at U.S. Embassies and Consulates worldwide, so employees may continue to travel throughout the shut down

4. Prepare Employees for Delays in their Immigration Cases

The U.S. Department of Labor will not accept PERM Labor Certification Applications for filing until funding is restored.  Pending Applications will also not be processed until additional funding is received.  This is also true for Prevailing Wage Requests.  It is important to identify your employees who are in the first stages of their immigration case and prepare them for these Department of Labor delays.

5. Calendar Deadlines

Longer processing delays dictate that prudent HR managers calendar deadlines well in advance to ensure that employees maintain their status and work authorization, and to minimize the extra expense of “Premium Process” by USCIS.

What is the Immigration Quota Backlog?

Posted by on 10:16 pm in Articles | Comments Off on What is the Immigration Quota Backlog?

The following is a discussion about the Employment-Based Immigration Quota system, including definitions and significance of the Quota Backlog and Cut-off Date. It also discusses leading predictions/theories and the benefits of filing under EB-1 or EB-2.

A. The Immigration Quota System

The U.S. accepts immigrant visa petitions filed for people from countries worldwide based upon an annual quota system. Each month, the U.S. State Department (DOS) calculates how many immigrant visa petitions were filed for nationals from every country worldwide.

B. The Quota Backlog System

Sometimes the number of immigrant visas petitions which were filed the previous month for people from a particular country exceeds the number of immigrant visas available under the annual quota. The quota backlog system permits people to continue filing immigrant visa petitions beyond the annual quota limitation and preserves their place in line while they wait for additional immigrant visas to become available under the quota system, but does not permit people to complete their immigration case (by filing Adjustment of Status or Consular Processing) until a quota number is actually available. Each person’s place in line is determined by the date the Labor Certification or Immigrant Visa Petition was filed, whichever is earlier. This date is called the Priority Date.  A person’s Priority Date fixes their place in line while waiting for additional immigrant visa numbers to become available under the quota system.

C. The Quota Cut-off Date

The cut-off date controls how many people waiting in line may apply for Adjustment of Status. Specifically, every 30 days, DOS calculates how many immigrant visas are available under the quota and adjusts the cut-off date depending upon how many quota numbers remain available (if any) based upon the previous month’s demand (or lack of demand). The cut-off date is published monthly in the State Department’s Visa Bulletin. If immigrant visa numbers are still available, DOS will advance the cut-off date to permit more people waiting in line to file for Adjustment of Status. Sometimes DOS makes a mistake by moving the cut-off date too far forward. When that happens DOS must move the cut-off date backwards to stop the filing and processing of Adjustment of Status applications until more quota numbers become available.

Because no one knows how many immigrant visa petitions will be filed next month, the quota cut-off date has historically progressed and regressed (gone backwards) unpredictably.

D. Quota Cut-off Date: Application to Your Case and Predictions

For purposes of illustration, if a person from India filed a Labor Certification or Immigrant Petition on or before January 1, 2008, he or she would have been waiting in the quota backlog for 5.5 years through July 2013.  However, the August 2013 Visa Bulletin now shows that this same person’s Priority Date (on or before January 1, 2008) will become current on August 1, 2013.  On that date, he or she will be permitted to file for Adjustment of Status to Permanent Resident.

DOS is currently predicting that the quota backlog will continue to progress slowly due to heavy demand.  Immigration Reform may change that dramatically.  However, this illustrates the importance of securing an employee’s place in line with respect to the quota by sponsoring them for immigration at the earliest.