EB-5 Investment at All Time High: It’s Time to Restore Congress’ Original Intent to Admit 10,000 Investor Families

EB-5 Investment at All Time High: It’s Time to Restore Congress’ Original Intent to Admit 10,000 Investor Families

September 21, 2017

U.S. Citizenship and Immigration Services (USCIS) released new data today on the number of Form I-526 and Form I-829 petitions received, approved, denied and pending.

One thing remains clear:  The demand for EB-5 visas has never been higher.  Nearly 50,000 Form I-526s have been filed since June 2014, representing about $25 billion of direct foreign investment in the U.S. economy, resulting in a revival of downtown areas in New York, Los Angeles, Seattle, Dallas and many other areas throughout the U.S.  EB-5 is without doubt one of the most successful job creating programs the U.S. has ever seen. About 80% of this investment comes from mainland China.  Yet, almost half these petitions, or 24,621 Form I-526s, remain pending with USCIS.

Due to an outdated EB-5 visa quota established in 1990, and the EB-5 program’s recent success, demand for EB-5 visas from mainland Chinese nationals has created a waiting line that is threatening the viability of this critical U.S. job creation program.  For the month of October 2017, only applicants who filed before June 22, 2014 are eligible for final interviews. This is because the October Visa Bulletin published by the Department of State established a cutoff date of June 22, 2014. The China visa cutoff date is now moving slowly at the rate of only one week per month. Without changes that increase annual number of EB-5 visas issued each year, the EB-5 Program’s continued high use-rate and success for creating jobs for U.S. workers will diminish.

Clearing the EB-5 visa backlog is vital to continuing a viable and vibrant EB-5 Program.  The easiest solution would be to restore the original congressional intent which was to allow 10,000 investor families annually and not count derivative beneficiaries against the annual EB-5 visa limits. Doing so would reduce the backlog by approximately 67%.  Fortunately, the proposed EB-5 Reform Bill sponsored by Senator Cornyn (R-TX) does just that. Section 101(5)(E) of the proposal states that the visa numerical limitations “shall only apply to principal aliens and not to the spouses or children of such aliens.”

Additionally, this solution confirms to Congress’s original intent to admit 10,000 investor families, not merely 3,000 investors and their families, as is currently the case.  Please review our prior blog on other possible solutions to the Chinese EB-5 backlog. The American Immigration Lawyers Association has prepared a White Paper on this topic, for additional reading.

When Congress amended the INA to create the Regional Center Program, it unequivocally intended to add 3,000 investors (not 1,000) in certain Targeted Employment Areas (TEA). The plain language of INA §203(b)(5) supports the position that derivatives were not intended to be counted towards the 3,000:

(A) In general—Visas shall be made available, in a number not to exceed 7.1 percent of such worldwide level, to qualified immigrants seeking to enter the United States for the purpose of engaging in a new commercial enterprise….

(B)(i) In general—Not less than 3,000 of the visas made available under this paragraph shall be reserved for qualified immigrants who invest in a new commercial enterprise described in subparagraph (A) which will create employment in a targeted employment area.” (Emphasis added)

The plain language of subparagraph (B) indicates that the recipients of the 3,000 visas are to “be reserved for qualified immigrants who invest.”  There is no indication from the language of the statute that Congress intended this number to be diluted by non-investor family members who would otherwise qualify for derivative visas.

This is confirmed by the congressional record on the creation of the EB-5 Program.  For example, on October 26, 1990, Senator Kennedy (D-MA) said the following with regard to the original EB-5 direct visa category:

Mr. President, 10,000 employment generating visas are provided for investors who invest in enterprises, especially in depressed rural or urban areas, which create a minimum of 10 new jobs for Americans.

See 17 136 Cong. Rec. S17103 (daily ed. Oct. 26, 1990) (emphasis added).  Similarly, Senator Simon (D-IL) stated:

One section of the bill that I am particularly pleased to have had included from my original bill is the employment generating investor visa provision. Following the recommendation of the Select Commission, the bill establishes a new visa category for entrepeneurs [sic] who are willing to contribute to America’s economic growth and provide new jobs for Americans by investing in new American enterprises. This one provision will generate over $8 billion annually in new investment in small and independent U.S. businesses and provide up to 100,000 new jobs for Americans-two goals which we need to pursue as quickly as possible….

We have an investor program that will permit up to 10,000 people to make investments here, to come to this country and create jobs. It is particularly targeted to areas of high unemployment. I think that will be of great help.

See id.  Additionally, USCIS should consider using Chart B, “Date for Filing” to allow persons in the U.S. to file adjustment of status applications.  This will allow EB-5 investors with approved Form I-526 petitions to obtain work and travel permits earlier than they would have been able to under Chart A, “Final Action Dates.”

2018-05-24T21:33:08-08:00 September 21st, 2017|

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