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EB-5 Insights

Where Government Policies and Business Realities Converge

By Shaoul Aslan‡ on Posted in Department of State, EB-3, EB-5, Immigration, Visa Bulletin

The Department of State (DOS) December 2018 Visa Bulletin shows some movement in employment-based categories. The EB-1 category will advance three months in all countries, with China and India advancing to Sept. 1, 2016, and all other countries will move forward to July 21, 2016. The EB-2 category remained current for all countries except China, advancing to July 1, 2015, and India, advancing to April 1, 2009. Although most countries will remain current in the EB-3 category, China will advance by one week to June 8, 2015, India will advance by two months to March 1, 2009, and the Philippines will advance by one week to June 15, 2017. As mentioned in our previous blog post, the EB-3 India final action date moved very rapidly over the past year, advancing almost a year and a half. Current demand projections make it likely that EB-3 India could surpass EB-2 India at some point this fiscal year. As noted above, India will advance two months in the EB-3 category in December. GT will be closely monitoring these advancements as they unfold.

Referring to the Final Action Dates, following are updates from the September Visa Bulletin:

EB-1: Mainland China and India will advance, with a cutoff date of Sept. 1, 2016, while El Salvador/Guatemala/Honduras, Mexico, Philippines, and Vietnam all moved forward to July 1, 2017.

EB-2: For the cutoff date for worldwide chargeability, El Salvador, Mexico, Philippines, and Vietnam are all now current. Mainland China will move to July 1, 2015; India had slight movement to April 1, 2009.

EB-3: In the EB-3 category, for the worldwide chargeability, El Salvador/Guatemala/Honduras cutoff is Feb. 22, 2016, Mexico will move to Jan. 1, 2017, and all other countries will remain current.

For those in the EB-5 category, the priority date remains current for all applicants other than those born in Mainland China and Vietnam, where the cutoff for China will advance slightly to Aug. 22, 2014, and for Vietnam it will advance significantly to May 1, 2016.

For those seeking to adjust status, The United States Citizenship and Immigration Service (USCIS) website indicates that the department’s Dates for Filing chart must be used for filing Form I-485. This is generally not the case, as USCIS usually requires that applicants use the “Application for Final Action Dates,” which typically reflects earlier cutoff dates than that “Dates for Filing” chart.

Referring to the Final Action Dates, following are updates for the December Visa Bulletin:

Final Action Dates for Employment-Based Preference Cases

Dates for Filing of Employment-Based Visa Applications

By Greenberg Traurig on Posted in EB-5, EB-5 Business Plan, EB-5 Immigrant Investor Program, EB-5 Investment, EB-5 Legislation, EB-5 Program, Uncategorized

On Oct. 30, 2018, USCIS issued an update to the USCIS Policy Manual clarifying the types of agreements that constitute an impermissible debt arrangement. USCIS revised Part G, Volume 6, Chapter 2, Section A.2. to reflect various scenarios where an operating agreement of a new commercial enterprise will or will not constitute an impermissible redemption agreement.

As defined by USCIS, an impermissible debt arrangement is an arrangement whereby an EB-5 investor has a contractual right to repayment of the invested capital. The Code of Federal Regulations specifies that a contribution of capital in exchange for a note, bond, convertible debt, obligation, or any other debt arrangement between the EB-5 investor and the new commercial enterprise does not constitute a contribution of capital for the purposes of the EB-5 Program.[1] This principle is also supported by the precedential decision Matter of Izummi, which found that an arrangement where an EB-5 investor provides funds in exchange for an unconditional, contractual promise that such funds will be repaid at a fixed maturity date constitutes an impermissible debt arrangement.[2]

In Matter of Izummi, the petitioner had a sell option that enabled him to require his investment be repaid at a certain price. Between Matter of Izummi and this update to the USCIS Policy Manual, USCIS has taken an expansive view of whether the terms of an EB-5 investment constitutes an impermissible debt arrangement.[3] USCIS previously believed that sell options and purchase options constituted impermissible debt arrangements, oftentimes with the following language contained with a Notice of Intent to Deny: “’For the alien’s money truly to be at risk, the alien cannot enter into a partnership knowing that he already has a willing buyer in a certain number of years, nor can he be assured that he will receive a certain price.’ Matter of Izummi, 22 I. & N. Dec. at 186.”

This interpretation has been subject to multiple federal court litigations. Most recently, in Chang v. USCIS, the U.S. District Court for the District of Columbia found USCIS’ expansive view of the holding of Matter of Izummi and 8 C.F.R. 204.6(e) to be arbitrary and capricious.[4] In Chang, the general partner of the new commercial enterprise possessed a call option to cause an EB-5 investor’s withdrawal of the new commercial enterprise by paying the EB-5 investor an amount equal or greater than the investment either before the investment was used to provide a loan or after the EB-5 investor became a lawful permanent resident. USCIS denied the I-526 Petition in Chang v. USCIS, claiming the call option constituted an impermissible debt arrangement. The court found that USCIS had acted in a manner that conflicted with the plain language of its regulations, was not compelled by statutory or regulatory purpose, unreasonably stretched the rationale of Matter of Izummi, and ran counter to the evidence in the record. Chang v. USCIS was the second federal court to make this holding.[5]

USCIS has finally updated its Policy Manual to conform to these federal court decisions. The USCIS Policy Manual now states that USCIS generally does not consider options exercisable by the new commercial enterprise to be impermissible debt arrangements.[6] Accordingly, operating agreements or limited partnership agreements of a new commercial enterprise may contain call options exercisable by the manager or general partner to pay an investor a set amount at a fixed date.

[1] 8 C.F.R. 204.6(e).

[2] Matter of Izummi, 22 I&N Dec. 183 (Assoc. Comm’r 1998)

[3] Matter of Izummi, 22 I&N Dec. 183-185 (Assoc. Comm’r 1998)

[4] Chang v. USCIS, 289 F.Supp.3d 177 (D.D.C. Feb. 7, 2018).

[5] Doe v. USCIS, 239 F.Supp.3d 297, (D.D.C. Mar. 10, 2017).

[6] USCIS Policy Manual, Part G, Vol. 6, Chpt. 2, Sec. A.2.

By Patty Elmas* on Posted in China, EB-3, EB-5, EB-5 Program, USCIS, Visa, Visa Bulletin

The Department of State (DOS) November 2018 Visa Bulletin shows movement in employment-based categories. The EB-1 category remained retrogressed for November 2018. Although it is likely that there will be some forward movement in December 2018 for EB-1 India, it will probably NOT return to “current” this calendar year. The EB-2 India category will likely move forward in December, but it will probably be only a week or so. The EB-3 category for India on the other hand may start seeing more significant advancement in December (weeks or possibly months). To provide context, the EB-3 India final action date moved very rapidly over the past year, advancing almost a year and a half. Current demand projections make it likely that EB-3 India could surpass EB-2 India at some point this fiscal year.  GT will be closely monitoring these advancements as they unfold.

Referring to the Final Action Dates, following are updates from the September Visa Bulletin:

EB-1: Mainland China and India had significant movement since September 2018, with a cutoff date of June 1, 2016, while El Salvador/Guatemala/Honduras, Mexico, Philippines, and Vietnam all moved forward to April 1, 2017.

EB-2: The cutoff date for worldwide chargeability, El Salvador, Mexico, Philippines, Vietnam are all now current. Mainland China moved to May 15, 2015; India to March 26, 2009.

EB-3: In the EB-3 category, the worldwide chargeability, El Salvador/Guatemala/Honduras, Mexico and Vietnam are all current. The Mainland China cutoff is June 1, 2015; India is January 1, 2009; and Philippines is June 8, 2017.

For those in the EB-5 category, the priority date remains current for all applicants other than those born in Mainland China and Vietnam, where the cutoff for China advanced to Aug. 15, 2014 and for Vietnam to Feb. 1, 2016.

For those seeking to adjust status, The United States Citizenship and Immigration Service (USCIS) website indicates that the department’s Dates for Filing chart must be used for filing Form I-485. This is generally not the case, as USCIS usually requires that applicants use the “Application for Final Action Dates,” which typically reflects earlier cutoff dates than that “Dates for Filing” chart.

Referring to the Final Action Dates, following are updates for the June Visa Bulletin:

Final Action Dates for Employment-Based Preference Cases

Dates for Filing of Employment-Based Visa Applications

By Anita E.J. Ninan on Posted in Department of Homeland Security, Immigrant Visa, Immigration, Immigration Law, Proposed Rule, USCIS, Visa

USCIS has proposed rules that could deny entry to non-immigrants seeking admission to the United States and adjustment of status to permanent residence to immigrants if they rely on public benefits for food, housing or medical care, and other forms of public assistance. The proposed rule – “Inadmissibility on Public Charge Grounds” – is published in the Federal Register. The public may comment on the proposed rule during the 60-day comment period ending on Dec. 10, 2018. USCIS will review comments to the proposed rule and then revise and issue a final public charge rule that will include an effective date. In the interim, and until a final rule is in effect, USCIS will continue to apply the current public charge policy.

Pursuant to Section 212(a)(4) of the Immigration and Nationality Act (INA), an individual seeking admission to the United States or seeking to adjust status to permanent resident (obtaining a green card) is inadmissible if the individual “at the time of application for admission or adjustment of status, is likely at any time to become a public charge.”

Under 8 U.S.C. § 1601 (PDF)(1), “Self-sufficiency has been a basic principle of United States immigration law since this country’s earliest immigration statutes.”

Further under 8 U.S.C. § 1601 (PDF)(2)(A), “It continues to be the immigration policy of the United States that aliens within the Nation’s borders not depend on public resources to meet their needs, but rather rely on their own capabilities and the resources of their families, their sponsors, and private organizations.”

While self-sufficiency has been the guiding principle of U.S. immigration law, as indicated in the above federal regulations, “public charge” has not been defined in statute or regulations. According to USCIS, there has been insufficient guidance on how to determine if an alien who is applying for a visa, admission, or adjustment of status is likely at any time to become a public charge. In determining inadmissibility USCIS has used the definition of “public charge” as an individual who is likely to become “primarily dependent on the government for subsistence, as demonstrated by either the receipt of public cash assistance for income maintenance, or institutionalization for long-term care at government expense.” (See, “Field Guidance on Deportability and Inadmissibility on Public Charge Grounds,” 64 FR 28689 (May 26, 1999). In determining whether an alien meets this definition for public charge inadmissibility, USCIS considers several factors, including age, health, family status, assets, resources, financial status, education, and skills. No single factor will determine whether an individual is a public charge.

The proposed rule will apply to foreign nationals seeking admission to the United States on non-immigrant and immigrant visas, as well as those non-immigrants who have availed themselves of public benefits within the United States and are seeking to seeking to either extend their stay or change their status. Under the proposed rule, USCIS would only consider the direct receipt of benefits by the individual alien applicant. Receipt of benefits by dependents and other household members would not be considered in determining whether the alien applicant is likely to become a public charge.

Factors that would generally weigh heavily in favor of a finding that an individual is likely to become a public charge include the following:

  • The individual is not a full-time student and is authorized to work, but cannot demonstrate current employment, has no employment history, or no reasonable prospect of future employment;
  • The individual is currently receiving or is currently certified or approved to receive one or more of the designated public benefits above the threshold;
  • The individual has received one or more of the designated public benefits above the threshold within the 36 months immediately preceding the alien’s application for a visa, admission, or adjustment of status;
  • The individual has been diagnosed with a medical condition that is likely to require extensive medical treatment or institutionalization or that will interfere with the alien’s ability to support himself or herself, attend school, or work, and the alien is uninsured and has no prospect of obtaining private health insurance; or
  • The individual has previously been found inadmissible or deportable based on public charge.

Alternately, factors that would weigh strongly against a finding that a foreign national is likely to become a public charge include:

  • The individual has financial assets, resources, and support of at least 250 percent of the Federal Poverty Guidelines for a household of the alien’s household size; or
  • The individual is authorized to work and is currently employed with an annual income of at least 250 percent of the Federal Poverty Guidelines for a household of the alien’s household size.

This proposed rule could have wide-reaching effects on legal immigration to the United States. The rule proposes not only to define “public charge” and the factors to be considered in making current and prospective public charge determinations, but also to add requirements for “public charge bonds” for certain applicants who are more likely to become a public charge. It is important for interested parties to comment on this proposed rule by the Dec. 10, 2018 deadline.

By Robert Y. Maples on Posted in Continuing Resolution (CR), EB-5, HR 6157

The President today signed H.R. 6157, a bill making Appropriations for Defense and Labor Health and Human Services & Education with a continuing resolution for other government programs not reauthorized by Oct 1. The continuing resolution prevents a government shutdown and extends vital programs, such as the EB-5 immigrant investor program, among others until Dec. 7.

To date, Congress has approved five of 12 appropriations bills. A four-bill minibus is in conference and the balance of three appropriations bills await further action. It is widely believed that additional congressional action will occur after the upcoming mid-term elections in November.

By Nataliya Rymer on Posted in China, Department of State, EB-5, EB-5 Legislation, EB-5 Processing Times, EB-5 Program, Green Cards, I-526, Immigrant Green Card, Immigrant Investor, Immigration, Immigration Law, State Department, USCIS, Vietnamese, Visa

This coming October, USCIS is allowing a number of foreign nationals to apply for adjustment of status earlier than they would otherwise be eligible. Specifically, USCIS has announced that it will allow individuals with immigrant petitions in employment-based categories to apply for adjustment of status based on the cutoff dates in the “Dates for Filing” Chart of the State Department’s monthly Visa Bulletin (Chart B).

As a reminder, in October of 2015, the State Department made a change with respect to its monthly visa bulletin – it added a chart with a set of often earlier cutoff dates it called “Dates for Filing.” The “Application Final Action Dates” chart (Chart A) has continued to reflect the dates on which visa numbers are actually available for the approval of adjustment of status or immigrant visa applications. Chart B, on the other hand, was instituted to reflect an earlier set of cutoff dates which the State Department has historically used to begin initiating the immigrant visa cases. Since implementation, and when allowed by USCIS subject to monthly determinations, Chart B cutoff dates have provided individuals in the U.S. with valid nonimmigrant status the opportunity to file their adjustment of status applications prior to the date immigrant visas were available for approval, which in turn has given these individuals the opportunity to remain in the U.S. as green card applicants and obtain related benefits such as employment and travel authorization.

Since implementation of this change in October 2015, USCIS has only allowed on very limited occasions for employment-based applicants to utilize Chart B for the filing of their adjustment of status applications. Historically, as their number is far fewer, family-based applicants have been able to take advantage of these earlier dates, while the employment-based applicants have continued to rely on the cutoff dates in Chart A for their filings. Therefore, this announcement constitutes a rare opportunity for employment-based applicants to file their green card applications earlier, and in some cases significantly earlier, than anticipated. Specifically, the October Dates for Filing chart provides the following cut-off dates:

 

Mainland China-born EB-5 investors in the U.S. in lawful temporary visa status can file adjustment of status applications if the priority date of their approved I-526 petition is earlier than Oct. 1, 2014. The Chart B cutoff date is over a month later than the Aug. 15, 2014 cutoff date in Chart A, which extends the benefit of being able to file their green card application to a significant additional number of approved EB-5 Chinese investors. Furthermore, for Vietnamese-born EB-5 investors, Chart B for October is current, which means that all those Vietnamese investors and dependents with approved I-526 petitions who are in the U.S. in valid temporary visa status, regardless of the priority date of their petition, can file their green card applications in the month of October.

Importantly, applications for green cards filed pursuant to Chart B do not secure protection under Child Status Protection Act (CSPA), the application of which continues to be determined based on Chart A – the availability of immigrant visas for final adjudication/approval. In addition, important considerations for filing exist for individuals in certain visa statuses in the U.S. For details, please contact your GT attorney.

By Robert Y. Maples on Posted in Continuing Resolution (CR), EB-5, EB-5 Immigrant Investor Program

Yesterday, by a bipartisan vote of 93-7, the U.S. Senate passed H.R. 6157, making appropriations for the Department of Defense and Labor, Health and Human Services, Education and related agencies and providing for continuing appropriations until Dec. 7 for other programs, including EB-5 immigrant investor program extension.  

This appropriations package funds the two largest segments of the U.S. budget, which are among the top priorities for annual funding. The inclusion of the Continuing Resolution in this strategic and important legislative package helps to ensure consideration and passage before appropriations lapse on Sept. 30. 

The House is expected to take up the Senate-passed legislation next week upon their return from break. 

 

By Greenberg Traurig on Posted in EB-5, EB-5 Immigrant Investor Program, EB-5 Legislation, I-829, Immigrant Investor, Immigrant Visa, Immigration, Immigration Law, Immigration Reform, President Trump's Administration, USCIS, Visa

This is the fifth post in a series that discusses how EB-5 investors and their dependents can maintain eligibility for permanent residence and I-829 Petition approval. This blog focuses on accepting certain public benefits that may make an investor and/or his or her dependents a “public charge.”

The Trump Administration has stated that USCIS will start deportation proceedings for any conditional permanent resident or lawful permanent resident who has abused any program related to receipt of public benefits. Additionally, conditional permanent residents and lawful permanent residents alike cannot be a “public charge.” This means an individual who is likely to become primarily dependent on the government for subsistence, as demonstrated by either the receipt of public cash assistance for income maintenance or institutionalization for long-term care at the government’s expense.

USCIS can make a “public charge” finding at the time of the immigrant visa interview for the conditional green card and at the I-829 Petition interview. A finding that the investor or a family member is a “public charge” can lead to denial of the immigrant visa or the I-829 Petition, and commencement of deportation proceedings following the I-829 Petition denial.

Acceptance of the following types of assistance may lead to the determination that the individual is likely to become a public charge:

  • Supplemental Security Income (SSI) under Title XVI of Social Security Act;
  • Temporary Assistance for Needy Families (TANF) cash assistance (part A of Title IV of the Social Security Act–the successor to the AFDC program);
  • State and local cash assistance programs that provide benefits for income maintenance (often called “General Assistance” programs); and
  • Programs (including Medicaid) supporting individuals who are institutionalized for long-term care (e.g., in a nursing home or mental health institution).

Under current USCIS guidance, non-cash benefits (other than institutionalization for long-term care) are generally not taken into account for purposes of a public charge determination. Non-cash or special-purpose cash benefits are generally supplemental in nature and do not make a person primarily dependent on the government for subsistence. Therefore, past, current, or future receipt of these benefits do not impact a public charge determination at present. Non-cash or special purpose cash benefits that are not considered for public charge purposes include:

  • Medicaid and other health insurance and health services (including public assistance for immunizations and for testing and treatment of symptoms of communicable diseases; use of health clinics, short-term rehabilitation services, and emergency medical services) other than support for long-term institutional care;
  • Children’s Health Insurance Program (CHIP);
  • Nutrition programs, including Food Stamps, the Special Supplemental Nutrition Program for Women, Infants and Children (WIC), the National School Lunch and School Breakfast Program, and other supplementary and emergency food assistance programs;
  • Housing benefits;
  • Child care services;
  • Energy assistance, such as the Low Income Home Energy Assistance Program (LIHEAP);
  • Emergency disaster relief;
  • Foster care and adoption assistance;
  • Educational assistance (such as attending public school), including benefits under the Head Start Act and aid for elementary, secondary, or higher education;
  • Job training programs; and
  • In-kind, community-based programs, services, or assistance (such as soup kitchens, crisis counseling and intervention, and short-term shelter).

The Trump Administration is attempting to expand the list of government benefits that could lead to a public charge finding. Specifically, the administration may expand list of “public charge” benefits to include Medicaid, subsidized Obamacare, food stamps, tax credits, or other non-cash government benefits. If an EB-5 investor and/or his or her dependents receive any of these benefits, and then the administration adds those benefits to the list of “public charge” benefits, USCIS may seek to deny the I-829 Petition. As such, EB-5 investors and their family members should try to avoid receiving these benefits following the grant of CPR status. Insurance paid for in the marketplace under the Affordable Healthcare Act should not result in a public charge finding.

By Jennifer Hermansky on Posted in EB-5, EB-5 Immigrant Investor Program, EB-5 Legislation, Immigrant Investor, Immigrant Visa, Immigration, Immigration Law, Immigration Reform, President Trump's Administration, Tax Considerations, Visa

This is the fourth post in a series that discusses how EB-5 investors and their dependents can maintain eligibility for permanent residence and I-829 Petition approval. This blog focuses on criminal issues and tax issues.

President Trump’s Executive Order, along with a Department of Homeland Security (DHS) implementation memorandum, prioritizes removable aliens who:

  • Have been convicted of any criminal offense;
  • Have been charged with any criminal offense that has not been resolved; and
  • Have committed acts that constitute a chargeable criminal offense.

Importantly, a criminal conviction is not required for USCIS to start the deportation process for an EB-5 investor or any of his or her dependent family members. Any CPR who has been arrested anywhere in the world for any infraction should reach out to his or her immigration attorney to determine the best course of action.

EB-5 investors and their dependents should disclose to their attorney all arrests and encounters with law enforcement. Even if previous visa applications have been approved in the past, or if an arrest or conviction occurred a very long time ago or for a very minor infraction, such arrest can lead to the initiation of deportation proceedings in the U.S. Failure to disclose arrests or convictions can lead to an I-829 Petition denial and the start of deportation proceedings.

Finally, conditional permanent residents and permanent residents alike are subject to the U.S. tax rules, and may be considered a “resident” for tax purposes if he or she is maintaining her permanent residence in the U.S. as outlined in our previous blog, including being physically present in the U.S. for more than six months a year. Failure to file tax returns as a “resident” of the U.S. when an investor and/or his or her dependents are required to do so could result in the denial of an I-829 Petition. The EB-5 investor can contact his or her accountant for more information.