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August 29 2014

The Media Has It Wrong

There are media stories and emails are coming in from Asia about the EB-5 program for China “closing” for the rest of 2014. This is not true.

The Department of State has pushed a number of EB-5 visa applications to the American Consul in China to use up all of the 10,000 (actually 10,667) EB-5 visa numbers so that at the end of the fiscal year none go to waste. All those scheduled at the American Consul in August and September will be issued visas, if they are eligible. 10,000 more EB-5 visas are available on October 1, 2014 – the 2015 fiscal year allocation. No one is barred from submitting an EB-5 application, i.e., I-526 petitions may still be filed at any time.

As I reported Monday, it is anticipated in May 2015 the EB-5 quota will backlog and this may cause delay in obtaining a visa number and immigrating for those whose cases were filed after January 1, 2014.

With the recent slowdown in deciding most EB-5 I-526 petitions (official average time is now 13.5 months), and the slowdown at a National Visa Center for consul interviews (6+- months), there is already an 18 – 24 month immigration timeframe. Initially, it appears the quota backlog will add a few months to this processing time. In 2017, however, the quota backlog may be 3 years, adding about 1 year to the current processing times.

The implications of this are:

  • Investors will be disappointed with the more lengthy time for immigration.
  • Some dependent children will be delayed and depending on the quota backlog and time to decide their parent’s I-526, they may age-out and not be able to immigrate with their parents. Thus, people with older children (17+) should apply ASAP.
  • Investors’ capital may need to remain in the project longer, up to 5 to 7 years.

For the regional centers the implications are:

  • The investors’ capital must remain in the project longer, i.e., until the I-829 is decided. Projects may not be able to be sold – or if sold, the EB-5 capital will have to remain in the project until all I-829s are granted.
  • More time spent on investor relations.
  • The timing of some projects’ job creation may need to be adjusted – this may be rare.
  • I hope this resolves any questions you or your investors may have.

Feel free to distribute this and my last newsletter on this topic which is below. Chinese translations are also available.