Author: Julia Yong-hee Park
The EB-5 Visa Backlog has Finally Happened
After many months of anxious anticipation, on April 13, 2015, the US Department of State finally announced a May 1, 2013 cut off date for EB-5 visas for people born in mainland China beginning May 1, 2015. So we now have a 2 year (24 month) backlog in visa numbers. What does this mean?
In a Nutshell
I wish I can give you a two paragraph explanation but unfortunately, some context and background information has to be provided. So for those of you who are not interested in the ins and outs of how this works, here are the conclusions first. Remember, this only applies to EB-5 investors born in mainland China:
- If the investor has recently filed an I-526, expect an additional 10 months wait time to immigrate to the United States. So instead of 20 months to get the conditional greencard (14 months I-526 review + 6 months Consular Processing), it will now take approximately 30 months (14 months I-526 review + 10 months wait + 6 months Consular Processing). (Note that even if your I-526 is approved sooner, the wait time will not be reduced as you still have to wait for your Priority Date to become current.)
- If the investor has not filed an I-526 yet but is considering immigration to the United States via EB-5, the quicker she files her I-526, the shorter the wait time will be as the visa backlog is expected to get longer by the end of 2016.
That’s about it. But please read on if you are still curious how it works.
Only Investors Born in Mainland China Affected
First it is important to understand that this only affects people born in mainland China (regardless of what country’s passport they currently hold). This has to do with the policy thinking behind per country quotas which I won’t discuss today.
Also, even if the investor was born in mainland China, if the spouse was born in Taiwan or Hong Kong, the investor can avoid getting caught up in the backlog. This is called cross-chargeability. And as long as long as the investor marries before Consular Processing – which is after the I-526 is approved – you can claim this benefit. (However, the investor cannot claim cross-chargeability on the birthplace of their children.)
Immigration to the US is a two-step process
Step 1: You file the immigration petition, which in the case of EB-5 is filed on form I-526. The date that you file the I-526 petition is your Priority Date. It is important to understand that there is no quota for immigration petitions (I-526s). In other words, there is no limit to the number of I-526s that can be filed in any given year. So the visa backlog will not affect any projects’ ability to accept new investors.
After you file the I-526 you wait for 14 months (the current processing time) for approval. Once the I-526 is approved, the investor must move to the second step.
Step 2: Apply for an immigrant visa (a/k/a greencard). In other words, filing the immigration petition (I-526) is different from actually applying for the greencard. You need an approved immigration petition (I-526 approval) before you can apply for the visa.
If the investor is in the United States in legal status, you go through the Adjustment of Status filed on Form I-485. If the investor is overseas, then he must go through Consular Processing (the interview process at a US Consulate). For purposes of this article, I will assume that the investor is overseas and thus will go through Consular Processing. (But the visa backlog affects Adjustment of Status and Consular Processing the same.)
Currently, about two to three months after I-526 approval, the investor’s attorney receives a fee invoice from the Department of State. The investor will then pay the fee online and send in information needed for Consular Processing. Then an interview will be scheduled.
However, now that the visa backlog has hit, the investor must now wait for his Priority Date to become Current. This is where the cut-off date becomes relevant. If your Priority Date becomes current, then you can move to Step 2. And your Priority Date is considered current if it is before the cut-off date posted by the DOS on their Visa Bulletin which is updated monthly.
Visa Bulletin: This refers to the DOS website that posts visa cut-off dates every month: http://travel.state.gov/content/visas/english/law-and-policy/bulletin.html
The picture above the title of this article shows what the EB Visa Bulletin looks like.
Cut-Off Date: the date in the visa bulletin chart. Someone with an approved I-526 can only move to Step 2 if their Priority Date is before the Cut-Off Date.
Priority Date: the date the immigration petition (I-526 in the case of EB-5, I-140 for EB-2 and EB-3, I-130 for family petitions, etc.) was filed.
We can see in the chart above that for the 5th Category (EB-5) the cut-off date is May 1, 2013 for people born in mainland China. So only people with an approved I-526 petition who filed before the cut-off date of May 1, 2013 can move to Step 2.
How the Cut-Off Date is Established
Let’s take a step back and discuss visa numbers. Every year, 10,000 EB-5 visas are available. It is Charles Oppenheim’s job at the DOS to take a look at all the visas being processed at different US Consulates overseas (and the pending I-485 applications at the USCIS) and predict if all of them can be processed within the 10,000 visa numbers. I say “predict” because while at any given time we know exactly how many I-526s are pending in the system, we don’t know for sure how many family members will be joining the investor. This data is not collected upfront. (And even if it was collected, it would not be 100% accurate because while the I-526 is pending, people might get married or have children.) So we don’t know exactly how many EB-5 visas will actually be needed to accommodate all the I-526s.
But as long as it looks like there is enough room to accommodate, Mr. Oppenheim will declare the numbers to be Current. (In the chart above, the letter C in lieu of dates indicates that the numbers are current.) However, looking at the applications in the pipeline, if it looks like (part math, part guessing) the 10,000 visas are going to be reached in any given fiscal year, then a cut-off date is established and the DOS says, “only people who have a Priority Date before the cut-off date, i.e.whose Priority Date is current, can move to Step 2 and apply for the greencard and everyone else needs to wait.”
This means that starting May 1, 2015 even with an I-526 is approval, you will only be able to move to Step 2 (apply for a greencard) if you had filed the I-526 prior to the cut-off date of May 1, 2013.
For Prospective Investors
Now, let’s think about the timing implications of what this means to future investors.
As mentioned earlier, currently we have a two-year backlog. And the backlog is anticipated to stay around 2 years at least until the end of 2016, according to Mr. Oppenheim’s estimate.
Now, if you file your I-526 in July of this year (2015) your Priority Date will be July 2015.
If your I-526 is approved 14 months later (which is the current I-526 wait time) it will be September 2016. At that point, assuming the current 2 year backlog holds, then the cut-off date at the time of your approval should be around September 2014. And since you filed in July 2015, you will have to wait approximately 10 months to July 2017 before you can move to Step 2 and apply for a greencard.
So the math is pretty simple: If the current 14 month I-526 processing times hold AND the 24 month backlog holds, the current visa backlog situation will add (24 backlog minus 14 wait time) 10 months to the entire process for Chinese investors. Because the backlog is calculated from the date of filing (Priority Date), all the time spent waiting for the I-526 to be approved will count as part of the wait.
Ironically, now that the visa numbers are backlogged, how quick your I-526 is approved generally no longer impacts how quickly you will get a conditional greencard.
The important point here is that the 2 year backlog will only add on 10 months to a Chinese investor’s immigration timeline, NOT 2 years. (Assuming a 14 month I-526 wait time.)
Also, this 10 month number can become shorter if the 6 months it takes for Consular Processing gets shorter. For example, some people are predicting that because of technical reasons I will not go into, Consular Processing for Chinese nationals could potentially go down to 3 months instead of the current 6 months now that the visa backlog has hit. In that case, the added wait time could be as short as 7 months. But these are all estimates at this point and we can’t be certain that Consular Processing times would go down. But again, the point is that a 2 year backlog does not mean it will take you 2 years longer.
That all said, the fact that there is now a visa backlog for Chinese EB-5 investors will have the biggest impact on investors who have older children. When an investor makes an EB-5 investment, that allows the investor to bring his or her spouse and any unmarried child under the age of 21. Before the visa backlog, as long as you filed the I-526 before the child turned 21, it didn’t matter how old the child’s age is upon approval thanks to the Child Status Protection Act. However, this is turned upside down when visa backlog occurs and there is a danger that the child can “age-out” and no longer qualify for the visa alongside the parents.
Please see the next article for a discussion on how the visa backlog impacts Chinese families with older children.