On Nov 08 2017 by H. Ronald Klasko
An Unusual Trip to China
The EB-5 Reform and Integrity Act of 2022 brought many changes to the EB-5 program. For the latest information, please click here.
It is certainly not unusual that I will be spending the next 2 weeks in China. At times, I feel like China is my second home.
What is unusual is the subject matter of my seminars and meetings in 7 cities in China. Normally, the topic is the latest developments in EB-5, projects that agents are interested in and questions that agents have. While I am sure that there will be some discussion of these EB-5 issues, they are no longer the hot issue in China. Given the extensive EB-5 quota backlog, agents and investors want to know immigration options that exist that do not have the long quota wait or options that exist for being able to come to the U.S. (and have their children educated in the U.S.) during the long quota wait.
It is for that reason that the main focus of my speeches will be the E-2 (treaty investor) visa option following acquisition of Grenadian citizenship and the EB-1C Multinational Manager green card option, which presently has no quota backlog. For reasons that I explained in my last blog, the E-2 visa is usually a better option than the EB-1C petition, especially given the unprecedentedly restrictive interpretations by USCIS in recent months on issues regarding L-1 visas and EB-1C Multinational Manager petitions.
I will also be discussing the possibility of federal court litigation challenging the long-standing interpretation of the U.S. Department of State that the 10,000-investor provision means 10,000 people (including family members) – – and therefore only about 3,000 investors per year. Many Chinese investors who are facing an unconscionable wait to immigrate to the U.S. after having already made their investments have discussed pooling funds for such litigation. While the chances of success are highly speculative, there is a reasonable legal argument to be advanced; and the potential reward is exceedingly high.
When the discussions turn to EB-5, the topics will also be different than past visits. The expectation that the EB-5 legislation will include “set asides” for rural and urban distressed areas, which will enable investors to go to the front of the line and avoid the long quota wait, will be a topic of discussion with agents who are not interested in promoting projects for which investors will have 10+ years of waiting time. Another topic will be capitalizing projects for which there is likely to be a shortfall of EB-5 money giving the diminished market in China. Another byproduct of the long waiting period is the need to redeploy investors’ funds, in some cases for 10 years or more. The entire redeployment market creates both challenges and opportunities, as well as complex legal issues.
We are clearly at a time of transition in the EB-5 industry. I look forward to my first China visit in the new age of EB-5 and its progeny.
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