May 1, 2015 will be a significant date in the EB-5 program. This will be the date that retrogression will go into effect for certain EB-5 investors.
As was explained in an FAQ on our website, retrogression refers to the situation where previously current dates on the quota bulletin go backwards and become unavailable. It is important to note that retrogression can impact an individual at different times in the overall process because the individual’s priority date must be current at two critical points in time:
(1) on the date that the I-485 application for adjustment of status is filed or application for immigrant visa at an Embassy/Consulate is filed; AND
(2) it must also be current on the date when the case is actually adjudicated (i.e., the immigrant visa cannot be issued or the adjustment of status application cannot be approved if the quota bulletin is not current for the applicable priority date).
It is also important to note that the Visa Bulletin uses “nationality,” not citizenship, to determine how to allocate visas by country. If an individual’s country of birth and country of citizenship are different, that individual’s country of birth determines which country’s visa backlog he or she is counted against.
Retrogression and EB-5
The Chief of the Visa Control and Reporting Division of the U.S. Department of State, Charles Oppenheim, had previously indicated that retrogression in the EB-5 immigrant visa category for investors from mainland China would likely take place in 2015. In April 2015, the Visa Bulletin for May 2015 was published confirming that the retrogression will go into effect for certain EB-5 Chinese investors. This change was illustrated in the fact that for affected EB-5 Chinese investors, the “C” was replaced with the date “May 1, 2013”. The appearance of a date in a category in the Visa Bulletin indicates that only cases that have a priority date that is before the published date will be adjudicated as opposed to being able to be adjudicated right away. In the context of an I-526 immigrant petition, the priority date is the date that the Form I-526, Immigrant Petition by Alien Entrepreneur is received by USCIS. The priority date is indicated on Form I-797, Notice of Action, which USCIS sends after the I-526 petition is received. As such, as of May 1, 2015, EB-5 investors who are nationals of mainland China and who have an approved I-526 immigrant investor petition will have to wait to be able to consular process at a visa post abroad or adjust status in the United States, and only investors who have a priority date (which is indicated on the Form I-797 Notice of Action that is sent after an I-526 petition is received) before May 1, 2013 will be able to proceed with completing the steps necessary to obtain their conditional permanent residency cards.
We have previously posted about some of the ramifications this will cause, including an investor’s dependent child who may be nearing 21 years of age potentially facing “age-out” issues, and the fact that business plans which rely on an investor’s active management may stall if an investor is delayed in entering the United States to direct the business. Other ramifications include the fact that EB-5 projects as a whole may need to be restructured, including their offering and loan documents, if the project timelines need to be adjusted to accommodate the wait times imposed by the Visa Bulletin.
Options for EB-5 Investors from Mainland China
As explained in the aforementioned previously posted article, a provision of immigration law known as “cross-charging” may help some affected EB-5 investors from being subjected to the wait times for their birth countries. Under the cross-chargeability provisions, the principal beneficiary can be charged to his/her spouse’s country of birth if different and thereby take advantage of that country’s visa availability. For example, if an EB-5 investor who was born in mainland China is married to someone who was born in the United Kingdom, the family could “cross-charge” to the United Kingdom and circumvent the retrogression for China. Again, it is the country of birth rather than citizenship which is controlling.