The Chief of the Visa Control and Reporting Division of the U.S. Department of State, Charles Oppenheim, reported that the EB-5 immigrant visa category would likely retrogress in July 2015. However, this does contradict his prediction provided to AILA earlier last week of retrogression occurring in May 2015. What is striking about Oppenheim’s announcement was that retrogression of the EB-5 immigrant visa category would cause him to establish a cut-off date of July 2013. A cut-off date has the effect of establishing an orderly line for the issuance of EB-5 immigrant visas. The cut-off date is determined based on the date an I-526 Petition was filed and is the date included on each I-526 Petition approval notice in the “Priority Date” box. For example, if a cut-off date of July 2013 is established in July 2015, during the month of July 2015, only those EB-5 investors (and their derivative beneficiaries) with a Priority Date in July 2013 or earlier (i.e. June 2013, May 2013, etc.) may apply for an EB-5 immigrant visa.

As we have stated previously, EB-5 investors should continue to file I-526 Petitions in the regular course of business because retrogression will have no effect on the adjudication of I-526 Petitions by the U.S. Citizenship & Immigration Services. By filing an I-526 Petition, an EB-5 investor is reserving his or her place in line by establishing his or her Priority Date, which has the effect of determining when he or she may apply for an EB-5 immigrant visa after receiving approval of his or her I-526 Petition. However, there are other effects of retrogression which should be evaluated when making a decision to pursue an EB-5 immigrant visa.

Oppenheim attributed the establishment of a July 2013 cut-off date to the increasing volume of I-526 Petition approvals by the U.S. Citizenship & Immigration Services (the USCIS) and his estimation of approximately three derivatives per I-526 Petition. According to his own calculations, this would indicate that there are roughly 3,333 principal investors under the EB-5 Program, with the remaining 6,667 EB-5 immigrant visa slots filled by family members of EB-5 investors. As retrogression of the EB-5 immigrant visa category may cause a drop in market demand for the EB-5 immigrant visa, it appears the inclusion of dependents against the 10,000 limit of EB-5 immigrant visas available for each U.S. government fiscal year (Oct. 1 to Sept. 30) would likely constrain the flow of foreign investor capital to the United States.