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EB-5 Insights

Where Government Policies and Business Realities Converge

By Bruce C. Rosetto and on Posted in EB-5, EB-5 Immigrant Investor Program, GT Alert

Congratulations! You have subscribed EB-5 investors, closed your offering, and provided the EB-5 funds to the project. Now what? As a general matter, EB-5 investors are either non-managing members of a limited liability company or limited partners of a limited partnership. In either situation, the EB-5 investor has limited managerial and voting rights, yet does have protections under either the Operating Agreement or Limited Partnership Agreement (the “NCE Agreement”), as may be applicable. The rights provided to EB-5 investors under the NCE Agreement must be adhered to as a binding contract between the new commercial enterprise (the “NCE”) and the EB-5 investor. Likewise, under state law, the EB-5 investor has rights and protections under the limited liability company act or limited partnership act. Finally, under federal and state law, the NCE will have ongoing securities law obligations, which may require supplements or updates to the offering documents.

To read the full GT Alert, click here.

For more on NCE Agreements, click here.

By Jennifer Hermansky on Posted in China, EB-5, EB-5 Immigrant Investor Program, India, State Department, Vietnamese, Visa Bulletin

On May 6, 2019, Charles Oppenheim, chief of the U.S. State Department Visa Control and Reporting Division, presented at the IIUSA Conference in Washington, D.C. on the state of visa backlogs for EB-5 immigrant visa applicants. Mr. Oppenheim reported on a number of important issues summarized in this blog.

Between approximately Oct. 1, 2018, and April 30, 2019, a total of 5,077 EB-5 immigrant visas were issued to applicants and their dependent family members for fiscal year (FY) 2019. In general, applicants born in mainland China used less visa numbers this year than the rest of the world, while applicants born in Vietnam and India have used 10% or more EB-5 visa numbers this fiscal year as compared to the last fiscal year. There are approximately 10,000 immigrant visas available for applicants in the EB-5 category each fiscal year.

Mainland China-Born Applicants

Applicants born in Mainland China have historically used most of the EB-5 visas. As a result, China has the longest wait time for an EB-5 visa. The State Department anticipates that around 3,660 “unused” visa numbers from FY 2019 will be made available to Mainland China-born applicants with the earliest priority dates.

Moreover, the State Department does not expect significant movement in the Visa Bulletin at the start of the next fiscal year for Mainland China-born investors. Mr. Oppenheim stated that the October 2019 Visa Bulletin will advance the priority date for Mainland China-born applicants to between Oct. 8-15, 2014. For those filing an I-526 Petition today, the expected wait time could be about 16 years. However, according to Mr. Oppenheim, the wait time for applicants who filed before May 6, 2019, is expected to be less.

Vietnam-Born Applicants

Mr. Oppenheim explained that Vietnam continues to be the country with the second highest EB-5 visa demand, behind Mainland China. In FY 2018, Vietnam used 7.2% of all EB-5 visas. In FY 2019, Vietnam is expected to use 10.7% of all EB-5 visas. Additionally, Vietnamese investors tend to have more derivative beneficiaries than other countries (which include a spouse and children under 21), and therefore less visa numbers are available overall for principal applicants. The State Department expects that the October 2019 Visa Bulletin will advance the priority date for Vietnam-born applicants to between Nov. 22, 2016 to Dec. 15, 2016. For new applicants filing an I-526 Petition today, the expected wait time could be approximately seven years, but Mr. Oppenheim was clear that this length of delay does not reflect the wait time for applicants who filed before May 6, 2019.

India-Born Applicants

Mr. Oppenheim expects to institute a cutoff date in the Visa Bulletin for the first time in July 2019 for applicants born in India, although this could occur in June 2019. If so, there will likely be an alert regarding this in the June 2019 Visa Bulletin. Accordingly, EB-5 visa applicants born in India with an approved I-526 Petition should take steps to expedite their case with the National Visa Center to have an interview scheduled and a visa issued as soon as possible. Likewise, India-born EB-5 visa applicants with an approved I-526 Petition who are in the United States in valid nonimmigrant status should take immediate action to file Form I-485.

Between July and September 2019, the State Department expects to retrogress immigrant visa availability to Indian-born EB-5 investors.; it is also expected that the October 2019 Visa Bulletin will advance the priority date for India-born applicants to between Summer 2017 and Fall 2017. For new applicants filing an I-526 Petition today, the expected wait time could be up to eight years, but Mr. Oppenheim was clear that this length of delay does not reflect the wait time for applicants who filed before May 6, 2019.

Rest of the World and Additional Information

The State Department indicated that all other countries will remain current through the end of FY 2019. Mr. Oppenheim made clear that any information provided is just an estimate of the backlog wait times, which cannot and do not account for all variables. Further, the Visa Bulletin predictions do not take into account I-526 Petition withdrawals or revocations, deaths, children aging out, and many other factors, all of which result in availability of immigrant visas to EB-5 applicants. Importantly, these predictions also do not take into account any changes that could happen through statute, new regulations, or other government action.

For more on visa backlog updates, click here.

By Laura Foote Reiff, , , and on Posted in EB-5, EB-5 Job Creation, EB-5 Legislation, Legislation

On April 9, 2019, Rep. González-Colón (R-PR-At Large) introduced H.R.2173 – a bill to amend the Immigration and Nationality Act to reserve EB-5 visas each fiscal year for investors in new commercial enterprises in areas where a major disaster has been declared by the president.

The bill is not publicly available as of this writing, but staff informed EB-5 Insights that it proposes to set aside 100 immigrant investor visas per year for areas designated by presidential declaration to be major disasters.

Rep. González’s legislative approach recognizes the economic benefits of the EB-5 program and the ability to fund vital government programs while creating new jobs for Americans in new and creative ways.

However, the EB-5 program is in great need of long-term authorization and modernization, especially as relates to the current 10,000 annual visa cap. Due to family derivatives count and per-country caps, the actual number of annual EB-5 investors is approximately one-third of annual visas, thus restraining the economic potential of the program.

According to a recent economic study by the EB-5 Investment Coalition (linked above), EB-5 modernization, such as removing derivatives from the annual visa cap and/or expanding the annual visas available, could unleash EB-5 as an economic engine to fund vital government programs well above-and-beyond its constrained status today.

Please check back for additional information on this development and other matters as information becomes available.

For more on the economic impact of EB-5, click here.

By Jia Zhao on Posted in EB-5, EB-5 Immigrant Investor Program, EB-5 Investment, Uncategorized

In a June 14, 2017 policy alert, USCIS updated its Policy Manual to provide further guidance regarding capital at risk requirements. Pursuant to the most recent Volume 6 of the Policy Manual, USCIS has confirmed and clarified that an EB-5 investor’s funds must sustain his or her investment “at risk” throughout the two-year conditional permanent residence period to be eligible to have the condition on permanent residence removed. The Policy Manual also clarifies that further deployment of an investor’s capital may be used to meet the capital at risk requirement under certain circumstances. Given the extended backlogs for mainland-China and Vietnam-born investors, redeployment has become an inevitable reality as the initial investment project is oftentimes completed and the loan repaid from the job creating enterprise (JCE) to the new commercial enterprise (NCE) before visa numbers are available to the investors. Therefore, to continue to satisfy the “at risk” requirement through the end of the two-year conditional permanent residence period, investors’ funds paid back to the NCE cannot sit idly in the NCE’s bank account, but need to be redeployed in a new investment. Given this reality, many projects have announced or will be announcing the news of capital redeployment. Below is a non-exhaustive list of the top 10 items we believe investors should consider when their projects announce redeployment:

  1. Whether the business plan has been followed through for the initial investment as outlined in the EB-5 business plan filed in the I-526 Petition – check the status of the project and make sure the project has moved forward as outlined in the I-526 Petition materials;
  2. Whether the required number of jobs have been created by the initial investment based on the economic methodologies in the Economic Report;
  3. Whether the EB-5 money has been expensed in accordance with the original business plan for the initial investment. The EB-5 funds should be used in accordance with the original business plan and the EB-5 loan agreement (or pertinent equity documents);
  4. Whether the new investment (redeployment) is consistent with the scope of the NCE’s ongoing business;
  5. Whether the proposed new investment satisfies the at risk requirement – the investment funds must be placed at risk (but not necessarily to the same extent of the initial investment), and no guarantees of repayment can be made directly to the investor:
    a. Treasuries may not be considered at risk

    b. USCIS has stated that certain new issue municipal bonds, such as for infrastructure spending, can be at risk as long as investments into such bonds are within the scope of the NCE in existence at the time Investor filed I-526;

    c. If the NCE was to loan pooled investments to a JCE for the construction of a residential building, the NCE, upon repayment of a loan resulted in the required job creation, may further deploy the repaid capital into one or more similar loans to other projects;

  6. Whether the investment funds will be deployed by the NCE within a commercially reasonable time following repayment of the initial EB-5 loan. USCIS has failed to define “commercially reasonable time,” but generally a reasonable due diligence period should be fine;
  7. Whether the redeployment would cover the period of the investor’s two-year period of conditional permanent residence;
  8. Investor must not withdraw investment funds from the NCE prior to expiration of the two-year conditional permanent resident card, and filing of the I-829 petition, otherwise I-829 petition would be denied;
  9. Whether the corporate documents would require a vote of investors to move forward with a redeployment;
  10. Whether the other investors may affect or block the redeployment of investors who must continue to meet the at risk requirement.

The considerations outlined above should inform investors of the unfamiliar terrain of capital redeployment and help them understand how redeployment contributes to/affects their attainment of permanent resident cards. However, while USCIS has acknowledged that redeployment may be an option to ensure investments continue to satisfy “at risk” requirement, the Policy Manual lacks clear or detailed guidance on redeployment of EB-5 investment. On April 9, IIUSA sent a memo to USCIS outlining the industry’s concerns and specific areas of needed clarification or changes to USCIS’s redeployment policy. We will closely monitor any developments in regard to USCIS’s policy and guidance on redeployment and provide updates as they become available.

For more on EB-5 investment, click here.

By Jia Zhao on Posted in EB-5, EB-5 Processing Times, Uncategorized

Currently, the average processing time for an I-526 petition ranges from 20.5 to 27 months, as shown in the screenshot from USCIS website below. For cases filed with an receipt date of January 29, 2017 or earlier that remain pending with USCIS, the investors or the attorneys of record can submit an “outside normal processing time” service request online or follow up with the Immigrant Investor Program office at USCIS.ImmigrantInvestorProgram@uscis.dhs.gov.

Estimated time range Form type Receipt date for a case inquiry
20.5 Months to 27 Months For use by an entrepreneur who wishes to immigrate to the United States January 29, 2017

After the approval of the I-526 petitions, investors born in mainland China or Vietnam will need to wait until their priority dates become current before visa numbers are available to them. According to Department of State’s Visa Bulletin for April 2019, the Chart A (Final Action Dates) priority date cutoff dates are September 15, 2014 for mainland China-born investors and August 22, 2016 for Vietnam-born investors. This means Chinese investors with priority dates of September 15, 2014 or earlier and Vietnamese investors with priority dates of August 22, 2016 or earlier are now eligible to (1) be scheduled for immigrant visa interviews and issued immigrant visas should they pass the interviews, if they proceeded with consular processing and have previously submitted DS-260 application and civil documents and NVC confirmed case processing complete; (2) file adjustment of status application (AOS) if they are in valid status in the U.S.; (3) wait for the adjudication of their AOS application, if previously submitted. Typically, USCIS will ask that investors/attorneys allow 30 days after the priority date becomes current to submit an inquiry about the AOS application if no update (RFE or Approval Notice) is received for the case. Typically, the AOS application is adjudicated within a few months (if their AOS receipt date is prior to the receipt date for a case inquiry) after the priority date becomes current, at which time, an RFE will be issued for the Chinese and Vietnamese investors for a new I-693 medical examination as their previous ones have expired during the pendency of the applications. After a response to the RFE is filed, USCIS typically takes a few months in approving the AOS application and a conditional permanent resident card will typically be issued within a month after the approval.

The current priority date cutoff date per Chart B (Dates for filing) of the Visa Bulletin is October 8, 2014 for mainland China-born Investors, moved up by one week from the March Visa Bulletin. The priority dates remain current for investors born in all other countries. This means that Chinese investors with a priority date of October 8, 2014 or earlier are eligible to pay fee bills and submit DS-260 applications, whereas investors born in all other countries are eligible to pay fee bills and submit their DS-260 applications, as soon as their I-526 petitions are approved and the cases are transferred to the NVC.  It is important to note that, at times, USCIS allows filing of AOS applications based on Chart B of the visa bulletin – this is of particular benefit to Vietnamese investors who have valid nonimmigrant status in the U.S. and wish to process their green card application without leaving the U.S. However, for the month of April 2019, USCIS does not permit the use of Chart B for filing AOS applications. We will closely monitor this and advise once USCIS allows the use of Chart B.

Chart A: Final Action Dates for Employment-Based Preference Cases

Chart B: Dates for filing Employment-Based Visa Applications

Finally,  the average processing time for an I-829 petition to remove the condition on the permanent residence ranges from 29.5 to 38.5 months, as shown in the screenshot from USCIS website below, though in practice, we have seen cases approved in much faster timeline. For cases filed with an receipt date of February 11, 2016 or earlier that remain pending with USCIS, the investors or the attorneys of record can submit an “outside normal processing time” service request online or follow up with the Immigrant Investor Program office at USCIS.ImmigrantInvestorProgram@uscis.dhs.gov.

Estimated time range Form type Receipt date for a case inquiry
29.5 Months to 38.5 Months Removal of lawful permanent resident conditions (immigrant investors) February 11, 2016

 

By Thuy-An T. Nguyen on Posted in E-Visa, Visa, Visa Issuance

On May 1, 2019, the E-2 Treaty Investor Visa may be available to Israeli citizens wishing to make a substantial investment in or set up a business in the United States. After several rounds of negotiations between the two countries and U.S. citizens already able to obtain a B-5 Israeli Investor visa, the United States is expected to approve the proposed May 1 launch date in early April.

The E-2 Visa grants qualified treaty investors and employees, as well as their dependent family members, a maximum initial stay of two years. Extensions may be granted in increments of up to two years, with no maximum limit so long as the E-2 nonimmigrant maintains an intention to depart the United States when their status expires or is terminated.

To qualify, the United States Citizenship and Immigration Services (USCIS) indicates a treaty investor must show at least 50 percent ownership of the enterprise or possession of operational control through a managerial position or other corporate device. The enterprise must have the present or future capacity to generate more than enough income to provide a minimal living for the treaty investor and his or her family. In addition, the treaty investor must risk a substantial amount of capital with the objective of generating a profit.

Given the flexibility of the E-2 Visa and Israel’s prominent position in the hi-tech sector, this new development has great potential to advance Israeli business interests and streamline entrepreneurial ventures.

For more on E-2 visas, click here.

By Laura Foote Reiff and on Posted in EB-5

On March 14, 2019, the EB-5 Investment Coalition, in cooperation with Invest in the USA (IIUSA), released the most comprehensive economic analysis of the EB-5 program to date. Laura Reiff, co-chair of Greenberg Traurig’s Immigration & Compliance Practice, commented on the report: “Without the typical data limitations and constraints on economic analysis, premier industry economists measured and determinized the billions of dollars in economic activity created by EB-5.  At a time of needed reauthorization and legislated reforms, we hope to present this data to the Administration and Congress to help make sound economic-based reforms to this vital economic engine and job-creating EB-5 program.”

For more on EB-5 and job creation, click here.

For more on EB-5 and the economy, click here.

˘ Not admitted to the practice of law

By Greenberg Traurig on Posted in Awards & Recognitions

Global law firm Greenberg Traurig, LLP elevated environmental attorney Jillian C. Kirn and business immigration attorney Nataliya Rymer to shareholder. The firm also announced the elevation of litigation attorney Gregory T. Sturges to of counsel. All three attorneys are based in the firm’s Philadelphia office.

To read the full press release, click here.

By Greenberg Traurig on Posted in Awards & Recognitions, Chambers Global, Immigration Law

Global law firm Greenberg Traurig, LLP has 37 attorneys recognized in the 2019 edition of the prestigious legal services directory, Chambers Global. In addition, 13 practices were ranked across seven regions including Immigration and Compliance. Laura Reiff and Martha Schoonover were ranked under USA Immigration: Business.

To read the full GT press release, click here.

By Robert Y. Maples˘ on Posted in EB-5 Modernization Rule, Office of Management, OMB, RIN 1615-AC07

On 2/22/19, USCIS forwarded the EB-5 Immigrant Investor Program Modernization final rule (RIN 1615-AC07) to the Office of Management

AGENCY: DHS-USCIS RIN: 1615-AC07 Status: Pending Review
TITLE: EB-5 Immigrant Investor Program Modernization
STAGE: Final Rule ECONOMICALLY SIGNIFICANT: No
** RECEIVED DATE: 02/22/2019 LEGAL DEADLINE: None

 

OMB will now begin assessment of the final rule produced by the agency via the review and comment period.

OMB is under no timetable for their review.

Please check back as we will update when additional information becomes available.