The EB-5 Reform and Integrity Act of 2022 brought many changes to the EB-5 program. For the latest information, please click here.
All of the recent news regarding employment-based green cards is negative. Roadblocks are everywhere.
HEADLINE: Employment-based permanent residence quotas are backlogged longer than ever before, and the likelihood is that they will continue to get worse without legislative relief. EB-5 waiting lists for approximately 90% of the EB-5 investors are anticipated to be between 8 and 15 years – – 15 years for China and a likely minimum of 7 to 8 years for Vietnam and India. EB-1 for all countries, which has traditionally been current, now has backlogs. Worst of all, Indians in the EB-2/EB-3 queue have an estimated wait, in the words of Charles Oppenheim of the Department of State, of “at least 50 years”.
HEADLINE: USCIS processing times have increased 46% over the past two fiscal years and 91% in the last four years. Worst of all, USCIS recently announced that the normal expected processing time for an I-526 petition is up to 45 months with no inquiry even available before September 30, 2015. Therefore, taking USCIS at its word, even nationals of countries other than India, Vietnam and China will likely not obtain permanent residence through the EB-5 process for a period in excess of 4 ½ years.
HEADLINE: USCIS denial rates are up substantially – – in many cases 40% or more – – across all employment-based nonimmigrant and immigrant petition categories.
What to do? For clients who are not prepared to wait 50 months to 15 years to enter the U.S. (and to have their children study in the U.S.), or 50 plus years to get a green card if the client is an Indian by birth, the answer is usually limited to the L-1 intracompany transferee visa or the E-2 treaty investor visa. While the L-1 visa may be a good option for some clients, it has at least 4 notable disadvantages:
- The petition must be approved by USCIS, which has a very high denial rate, especially for smaller and start-up companies;
- The client has to qualify as a full-time manager of the U.S. business (many high net worth clients are not particularly interested in managing a U.S. business);
- USCIS has adopted a very restrictive definition of “manager” that applies to both the overseas employment and the U.S. employment and that often requires multiple tiers of employees; and
- A start-up company L-1 visa is limited to one year initially.
For many, the E-2 visa is the best option. It is the only employment-based or investment-based petition that does not require petition approval by USCIS. Processing times are usually very short – – 2 months or less. There has been no notable decline in the percentage of approvals. And, depending upon the nationality of the investor, the visa may be issued for 5 years with indefinite renewals, which can completely fill the gap for the investor who is hoping to eventually immigrate through the EB-5 process.
Also, for the client who wishes to be employed in the U.S., the spouse of an E-2 can work for any employer in the U.S., or for his or her own business, without employer sponsorship. This enables the husband and wife to choose the spouse who will oversee the investment business, leaving the other spouse free to work at his or her choice of employment.
Finally, unlike the L-1 visa, which is based on the foreign national being a full-time manager of the U.S. business, the E-2 visa allows the foreign national to hire a full-time manager. Instead of being required to manage the business, the E-2 investor can qualify by “developing and directing” the business. This requirement allows the investor to oversee the full-time manager (including from afar) without having to manage himself.
The E-2 option is immediately available to investors from over 80 countries which have investment treaties with the U.S. For nationals of other countries, including the most frequent users of the EB-5 program (China, Vietnam and India), the investor must first obtain citizenship in a country that has an investment treaty with the U.S. The investor has a choice of four such countries that enable relatively quick grants of citizenship based on investment and have investment treaties with the U.S. – – Grenada, Turkey, Montenegro and Moldova. These country options are by no means equal in terms of attractiveness for the investor, and counsel will certainly want to proactively advise the client in this regard.
Once the client obtains citizenship by investment, the E-2 application can be filed immediately; and the investor and his family can be in the United States usually within a couple of months thereafter assuming the E-2 investment is fully qualifying.
To schedule a consultation to discuss if this option is best for you, click here.
The material contained in this article does not constitute direct legal advice and is for informational purposes only. An attorney-client relationship is not presumed or intended by receipt or review of this presentation. The information provided should never replace informed counsel when specific immigration-related guidance is needed.
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