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Comment: Five Voices on China Direct
In November of 2021, we received comments on the December Visa Bulletin from a number of people with deep experience with EB5 in general and the Chinese EB5 market/Direct EB5 in particular. We believe these five different perspectives will be of interest to all who are looking at the Chinese Direct EB5 opportunity in light of the December Visa Bulletin. The five voices are:
- Mona Shah, attorney with deep China experience
- Suzanne Lazicki, EB5 blogger extraordinaire
- Ishaan Khanna, Founder of AIIA
- Matt Gordon, Editor of The EB5 Book
- Robert Divine, attorney with deep EB5 scholarship
[Please note that all these comments were made in mid November.]
Mona Shah
My first comment would be...A frenzy of activity-- the Wild West of direct pooled projects just became wilder!
(a) For the few lucky ones who filed in direct pooled projects, anare approved but waiting for their visa number to be current, they will be able to immediately file for their green cards (we have several such cases pending).
(b) The US/ Chinese market is not super hot right now, due to negative press relating to law suits with some of the large regional centers, backlog. I am expecting that a number of Agents will try and take advantage of this limited bonanza. The issue is whether they bother to do their due diligence properly or go for any project that offers them a high enough commission. Also, will the agents explain (or even understand the risks).
(c)There will be a number of regional centers and projects scrambling to put direct projects together to avail the Chinese market.
We are nervous as we have already seen some very shabby projects incorrectly structured...
Suzanne Lazicki
“This is the first time that the Visa Bulletin has allowed direct EB-5 priority dates to move ahead of regional center dates at the visa stage. Presumably Department of State made the move for December 2021 to minimize visas simply going to waste during the on-going regional center program expiration, as I discussed in a previous post. At most a few thousand visas issued out-of-order to China-born direct EB-5 investors is a couple thousand fewer visas to go unused in FY2021. Chinese regional center investors are losing visa availability by the day during RC program expiration regardless, so I don’t see the announcement as much additional harm for them. Visas that don’t go to direct EB-5 applicants this year would likely otherwise just be lost to EB-1 next year. The visa bulletin change is good news for those few Chinese direct investors who are in a position to protect children by filing visa applications, or far enough along with paperwork to jump at the chance for final action.
When interpreting the Visa Bulletin, be sure to remember that EB-5 is a multi-step process. Visa Bulletin announcements reflect and pertain to Step 2 (visa application stage), not Step 1 (I-526 processing stage). A “current” final action date in December 2021 reflects low demand and high supply at the visa stage as of December 2021, and applies to people who have visa/I-485 processing nearly complete as of December 2021. It does not necessarily mean anything for people earlier in the process.”
See the entire article here.
Ishaan Khanna:
“Chinese investors are livid. On every Wechat group I am in they are closely watching their agents to see if any of them try to sell Direct EB-5...
There is now an answer to the most burning question in the EB-5 world: Will the Regional Center Program be reauthorized on December 3? It is unlikely.
The bigger question facing the industry has a more hopeful, but still ominous answer: Will the Program be restored at all? Probably. But not certainly.”
See the entire article here
Matt Gordon:
“Firstly, investors with approved I-526 petitions can immediately begin the process of obtaining their lawful permanent residency (aka Their Green Cards). Most notably, those investors who are currently in the US can file for adjustment of status and obtain work and travel parole. For those in this group, don’t delay, the window is open and this has the potential to save many many years if not a decade or more.
The next group of investors to benefit are those who have approved I-526 petitions, but are not currently in the United States. This group can also begin their consular process. An issue is that this may take a significant amount of time. The immigrant visa service in China began processing immigrant visas on April 9th, so depending on the amount of time it is taking to get an appointment, this too may be a path to salvation.
The third group are those who have filed direct EB-5 petitions, but have not yet been adjudicated. This may be the first tangible sign that things are about to change. Since the Regional Center termination, many in the EB-5 community have been wondering what USCIS has been up to for the last several months, in particular, those adjudicators who are focused on processing I-526 petitions. With the Region Center program termination, the number of pending cases went from many tens of thousands to probably no more than a few hundred. At historical processing levels (even with pandemic related issues thrown in), USCIS should have been able to tackle the entire backlog within a few months and keep up with the new cases that have been coming in. What is very important is that USCIS has previously stated that it changed from processing cases on a FIFO basis (first in first out) to only processing cases for which the visa category was current. That meant that new Chinese and Vietnamese cases were simply set aside. As of December, with all countries being current, all those historical cases are now eligible for immediate adjudication. Those who fall into this group should expect adjudicatory action very soon, if it hasn't happened already. If this hasn’t happened, one should consider a possible mandamus action as a wake up call to USCIS.”
See the entire article here
Robert Divine:
“It seems likely that within the next six months Congress will pass legislation either renewing the EB-5 program altogether (with changes including to increase the investment amount) or at least “grandfathering” investors who already filed an I-526 petition. Importantly, the December 2021 Visa Bulletin also states, “If there is legislative action extending this category for December, the final action dates would immediately become “Current” for December for all countries except China-mainland born I5 and R5, which would be subject to a November 22, 2015 final action date.” That means that if the regional center law gets renewed or existing investors are grandfathered, suddenly all of the tens of thousands of Chinese investors in the visa number queue become restored and are ahead of all of the “direct” investors who might have piled into the process after June 30, 2021.
There is a possibility that the regional center program will not get renewed anytime soon and that USCIS will decide that it must deny all pending petitions and revoke all approved petitions filed under the regional center program. There is also a slight possibility that new direct investors could get speedy adjudication (given the relatively small numbers who have filed) and get through the visa issuance process before Congress gets around to legislative renewal of the regional center program. These prospects provide temptation to Chinese investors waiting on the sidelines. The risk probably is best taken by families for whom a $500,000 is not a momentous sacrifice.”
See the entire article here
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