The contents of this presentation are for educational purposes only (i.e., not legal advice).

Transcription

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2 Outline of Presentation 1. The Problem 2. The Cause 3. Potential Solutions

3 The Problem: Current 31 Month Backlog for Chinese-Mainland EB-5 Investors Chart A Final Action Dates (FAD) October 2016 Employment-Based All Chargeability Areas Except Those Listed CHINA - mainland born 5th Non-Regional Center (C5 and T5) Current 22-Feb-14 5th Regional Center (I5 and R5) Unavailable* Unavailable* (*The I5 and R5 categories were (*The I5 and R5 categories were initially listed as Unavailable for initially listed as Unavailable for October. However with CR to October. However with CR to 12/9/2016, China-mainland is 12/9/2016 these dates became subject to a February 22, 2014 Current for October) final action date after CR)

4 What does Chart A Final Action Date(FAD) mean for Chinese Quota Backlog? Chinese investors will still be able to invest. Chinese investors will still be able to file I-526 petitions. Chinese investors will still be able to have their I-526 petitions approved. However, the final step of the process issuance of the conditional immigrant visa will not occur until there is a quota number available under Chart A for the investor. For October 2016, a final immigrant visa interview cannot be scheduled in Guangzhou, China unless the I-526 was filed before February 22, 2014 therefore, the wait for an EB-5 conditional green card is presently over 31 months

5 The Problem: Waiting Line Keeps Getting Longer Visa Bulletin Month EB-5 Chargeability Except Those Listed China - Mainland Born Waiting Time for Chinese EB-5 Investors (Months) Oct-14 C C 0 Nov-14 C C 0 Dec-14 C C 0 Jan-15 C C 0 Feb-15 C C 0 Mar-15 C C 0 Apr-15 C C 0 May-15 C 1-May Jun-15 C 1-May Jul-15 C 1-Sep Aug-15 C 1-Sep Sep-15 C 22-Sep Oct-15 C 8-Oct Nov-15 C 22-Nov Dec-15 C 15-Dec Jan-16 C 8-Jan Feb-16 C 15-Jan Mar-16 C 22-Jan Apr-16 C 1-Feb May-16 C 8-Feb June-16 C 15-Feb July-16 C 15-Feb Aug-16 C 15-Feb Sep-16 C 15-Feb Oct-16 C 22-Feb-14 31

6 The Cause: Outdated EB-5 Quota and Per Country Limits The Immigration Act of 1990 allocated approximately 10,000 visa numbers for EB-5 investors and family members each year in the last few years demand has surged. No more than 7% of immigrant visas may be issued to natives of any one independent country in a fiscal year Once the annual allocation of 10,000 EB-5 immigrant visas is reached, EB-5 immigrant visa applicants from oversubscribing countries (those that use more than 7% of the worldwide total) are required to wait for a future fiscal year s allocation to be available before proceeding with consular processing or adjustment of status. With no other country reaching 7%, China has been able to use unused visas from other countries

7 Long Processing Times Impact All Applicants and the EB-5 Process

8 IPO Staffing & Processing Delays Also Impact All Applicants and the EB-5 Process USCIS Estimated Hours to Handle EB-5 Cases

9 The Cause: Regional Center Sunsets and Proposed Changes Resulted in Large Number of I-526 filings

10 The Cause: Many More I-526s Received Than Adjudicated

11 The Cause: Heavy Demand From Chinese-Mainland Investors

12 Increased % of I-526 Denials

13 Increasing I-526 Denial Rates

14 Annual Allocation of 10,000 EB-5 Visa Petitions Includes Derivative Beneficiaries Number of EB-5 Visas Issued to Principal Beneficiaries* FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2015 Data* EB-5 Visas to Principal Beneficiaries: 2,919 (33.3%) EB-5 Visas to Derivative Beneficiaries: 5,854 (66.7%) AVERAGE OF 3 EB-5 VISAS PER APPROVED I-526 PETITION *Based solely on overseas immigrant visa issuance data; does not include AOS

15 What is the Actual Waiting line for those who Filed around September 30, 2016? As of June 30, 2016, 19,406 I-526s pending Assume 25% denial rate: approximately 14,555 approved I-526s Assume 3 IVs per 1 approved I-526: 43,665 EB-5 IV applicants Include approximately 14,000 documentarily qualified applicants at NVC as of August 30, 2016: 57,665 EB-5 IV applicants Assume 10% IV denial rate or withdraws: approximately 51,899 EB-5 beneficiaries Only 10,000 EB-5 IVs each fiscal year Result: Over 5 years worth of EB-5 visas in pipeline (not including I- 526s filed since July 1, 2016) Visa Bulletin determines when immigrant visa is available And, as I-526 filings from investors of other countries increases, lower visa number available to Chinese-mainland beneficiaries

16 Possible Solutions: H.R Exacerbates the Problem How H.R Adversely Impacts Visa Availability 2,000 of 10,000 reserved for rural area investments 2,000 of 10,000 reserved for priority urban investment area investments Recapture of any of these 4,000 unused for future fiscal years restricted to rural area or priority urban investment area subcategories Result: Fewer EB-5 visa numbers for those who don t invest in these specific types of projects will massively exacerbate current waiting line problem for Mainland Chinese

17 Possible Solutions: H.R How H.R Assists with Alleviating Problem Allows concurrent filings of Form I-526 and I-485 for nonquota backlogged countries (all except China) Would provide investors and family members with work authorization and travel authorization (red combo cards) 3-4 months after filing

18 Possible Solutions: Red Combo Card Allow concurrent filing of I-526 and I-485, proposed in various bills Red Card Parole approved I-526 entrepreneurs to enter U.S. to file I-485 Red Card (especially in Direct EB-5 cases, in order to manage business) File I-485 because of Chart B (DFF) Red Card (Oct. and Nov only) Red Card allows work & travel (like Green Card) Is Red Card better than Green Card? (tax consequences/absences from U.S.) Filing I-485 Adjustment of Status best protection for child age-out?

19 Possible Solutions: Visa Modernization and Better Use of Chart B Date for Filing Applications Chart B Date for Filing Applications (DFFA) October 2016 Employment- Based All Chargeability Areas Except Those Listed CHINA - mainland born 5th Non-Regional Center (C5 and T5) Current 15-Jun-14 5th Regional Center (I5 and R5) Current 15-Jun-14 USCIS decided not to open Chart B in October Will it be used in November 2016?

20 What does Chart B Date for Filing Applications (DFFA) mean for Chinese Applicants? If the USCIS feels there are sufficient visa numbers, they will allow person in the U.S. in valid status to file Form I-485 Adjustment of Status. Unfortunately, USCIS did not open chart B for October 2016 start of FY 2017 will they open for November 2016? If USCIS permits Chart B filings in November 2016, this will allow applicants to obtain the Red Combo Card which is a work and travel permit - - after about 3 months (and possibly also provide age-out protection for derivative children) The final step of the process issuance of the conditional lawful permanent residency will not occur until there is a visa number available under Chart A. For October 2016, the Form I-485 adjustment application cannot be filed for Chinese unless the I-526 was submitted before February 22, If Chart B opens for November 2016, all eligible persons in U.S. with cutoff dates up to June 14, 2016 can file. Non-Chinese, eligible persons can file Form I-485 adjustments regardless of cutoff date because no quota applies.

21 Possible Solutions: Recapture Unused Visas from Prior FYs From FY , a total of 29,689 EB-5 visa numbers were issued, leaving a minimum surplus of 99,531 unused EB-5 visa numbers Goal of INA: No available IV numbers go unused EB-5 and EB-4 fall up to EB-1 in given FY EB-1 fall down to EB-2 in a given FY EB-2 fall down to EB-3 in a given FY EB fall across to FB in following FY (but IRs) FB fall across to EB in following FY American Competitiveness in the 21 st Century Act of Recaptured 130,107 unused EB visas in FY99 and FY00 Real ID Act (2015) Recaptured 50,000 unused EB visas from FY01-FY04

22 Other Solutions Increase all Employment Based (EB) Visas therefore 7.1% increases allocation only possible as part of CIR, no piecemeal Increase allocation of EB Visas from 7.1% for EB-5 Count Families, Not Individuals, against annual EB-5 limit National Interest EB-5 Investor Category

23 Thank you Bernard Wolfsdorf Patrick F. Hogan David Hirson Kyle Walker Kristal Ozmun