When Immigration Matters

EB-5 VISA RETROGRESSION-THE IMPACT TO CHINESE CITIZENS

Posted by Karen-Lee Pollak on Sat, Jun 20, 2015 @ 9:00 AM

karenpollak-resized-600For the first time in the history of the EB-5 visa program, the visa quota for China has retrogressed.  According to the July 2015 Visa Bulletin, EB-5 visas are now available to Chinese Citizens who filed their petitions on or before September 1, 2013.

RAMIFICATIONS OF EB-5 VISA RETROGRESSION FOR CHINESE CITIZENS

With quota retrogression, it may be several years between the filing of the form I-526 and the time the investor can lawfully immigrate to the United States and manage his investment. This creates problems for the Direct EB-5 investor who will have to wait several years to come into the USA to manage his or her investment unless they are able to obtain some temporary non immigrant work visa.  In addition, for direct EB-5 investments, the I-526 petition must be accompanied by evidence including a business plan that the new commercial enterprise will employ not fewer than ten qualifying employees within the next two years.  A Chinese Investor cannot submit a good faith business plan when he does not know when he will actually immigrate to the USA to employ and oversee these employees.    

Similarly, the ability of a Chinese investor to invest in a “troubled business” to obtain residence under the EB-5 program will be all but eliminated because of Chinese quota retrogression as the petitioner must demonstrate maintenance of the number of existing employees at no less than the pre-investment level.

 CHINESE QUOTA RETROGRESSION AND THE CHILD STATUS PROTECTION ACT

Chinese EB-5 quota retrogression also creates a conflict between project developers, the agents and the Chinese investors. Project developers and the agents are anxious to obtain approval of form I-526. Many projects hold a petitioner’s funds in escrow until the form I-526 is approved. Thus, approval of the form I-526 is often crucial to freeing up the investor’s capital for use in the investment. But this may be inconsistent with the investors interest if the Investor has a child who is about to turn 21.  The Child Status Protection Act (“CSPA”) freezes the age of children who are derivative beneficiaries of an I-526 petition while the petition is pending, but not once the petition is approved and awaiting the quota to become available.  A Chinese petitioner with children age eighteen or older will want to freeze a child’s age for as long as possible in a visa retrogression situation. The longer the time the I-526 is pending, the longer the time the child’s age is frozen. It may be beneficial for certain Chinese nationals who have children close to “aging out” to draw out the I-526 petition process and delay responding to a Request for Evidence. 

SUSTAINABILITY OF THE INVESTMENT

Under the Eb-5 regulations, the investor’s investment in the new commercial enterprise must be “sustained” during the two years of conditional residence. If the average processing time of an I-526 petition is 13 months, and if it takes approximately one year to complete the adjustment of status process, or the conditional immigrant visa and U.S. entry process, and another two years is added for the filing of the I-829 petition and another one year for adjudication of the I829 petition-- from the time of the investment and filing of the I-526 petition until the time conditions are removed and the investment no longer must be sustained, in most cases, between 7 and 8 years have elapsed factoring in current visa retrogression for Chinese Citizens.  . So what happens in the event of quota retrogression? This means the investor cannot have his capital returned for at least 7 years and must sustain the investment for the same time period.  From the investor’s point of view, this means that the investment money will be tied up for a longer period of time and any “exit strategy” will become more protracted.

This delay is also problematic for regional center investors. A significant majority of regional centers utilize the so-called “loan model”. Under this model, the investor is an equity investor in the new commercial enterprise. The new commercial enterprise is, in turn, a lending company that lends the EB-5 investors’ investment money to the project developer (the so-called “job creating enterprise”). Traditionally, the loan from the new commercial enterprise to a job-creating enterprise is five years creating a five year exit strategy for investors. Quota retrogression will require lengthening of the loan time period, which will delay the investor’s return of investment proceeds. Project developers may also want to refinance or sell the business, which could have significant negative consequences for the condition removal process for the investors if it occurs before the approval of the I-829.  Conversely what if the loan is repaid in five years by the developer? The funds cannot be paid back to the investor until I829 approval or lie idle in the new commercial enterprise’s bank account as the funds would no longer be considered “at risk”. 

Congress needs to adjust the number of EB-5 visas available to no longer include derivative family members in order to make the number of visas available more in line with the demand. In the interim, USCIS needs to provide some guidance on how it will deal with Chinese visa retrogression. 

CHINA EB-5 VISAS UNAVAILABLE FOR THE REST OF FY2014

Posted by Karen-Lee Pollak on Tue, Aug 26, 2014 @ 4:07 PM

EB-5, PERMANENT RESIDENCY,INVESTMENTCharles Oppenheim, U.S. Department of State, Chief, Immigrant Visa Control announced that the China Employment Fifth (EB-5) preference category has become "Unavailable" for the remainder of the FY-2014 because the maximum number of visas allocated ot chinese nationals has been reached.  

However, all China EB-5 applicants who have been scheduled for interview at an overseas post based on the original establishment of the August and September cut-off dates would have been allotted visa numbers for potential use by their case. Such applicants will not be impacted by the "Unavailability" of the China EB-5 category for the remainder of FY-2014.

In this context, "Unavailable" means that no additional numbers are available for "comeback" cases originally scheduled for interview in an earlier month who are just now returning, or for those first requesting an interview. The only exception would be if a post had "otherwise unused" numbers available, because applicants either failed to appear or failed to overcome a refusal during the month (i.e., August or September) of originally scheduled interview.

USCIS offices may continue to accept and process China Employment Fifth preference cases and submit them in the normal manner. However, instead of being acted upon immediately, those cases will be held in the Visa Office's "Pending Demand" file until October 1, 2014. At that time, all eligible cases will be automatically authorized from the "Pending Demand" file under the FY-2015 annual numerical limitation. Each USCIS requesting office will receive an e-mail notification of such authorizations, which will be effective immediately.

EB-5: USCIS continues to recognize RIMS II for Indirect Job Creation

Posted by Michael Pollak on Fri, Jul 25, 2014 @ 2:20 PM

EB-5, Investor visa, investor green cardOn June 19, 2013, the U.S. Bureau of Economic Analysis (BEA) issued a docs/bea report.pdf announcing its plan to eliminate its Regional Input-Output Modeling System (RIMS II) economic model. That model has been specifically approved by USCIS and RIMS II reports have been heavily relied upon by a majority of EB-5 investors and Regional Centers in filing their EB5 applications.

This announcement has left many in the EB5 arena wondering what type of evidence of job creation would BEA start accepting and whether USCIS would continue ot accept RIMS II modeling. 

On July 3, 2014, the BEA announced its "plans to release in 2015 a modified economic model to replace the original" RIMS II model.

Former BEA economist, John Barrett of Performance Economics LLC told David Morris, Chair of the AILA/EB-5 Committee summarized the BEA News as follows:

  • No change in the methodology of the USCIS approved benchmark series of multipliers;
  • Benchmark series now based on the 406-industry 2007 benchmark I/O table instead of 2002, an improvement;
  • USCIS should continue to take a positive view of RIMS II, as they have in the past.

According to Barrett, “Given this announcement by BEA, there is no reason why USCIS wouldn’t continue to recognize RIMS II as a ‘verifiable methodology'".  The Benchmark Series multipliers will be produced exactly as they have in the past and therefore USCIS would be hard pressed to find a reason to reverse itself on past recognition granted RIMS II.”

If your EB5 application is through a Regional Center you must make sure that if the project is relying on indirect job creation reports that these reports continue to be valid and make sure that the reports have been approved by a qualified econoomist as to the impact of the RIMS II changes.

EB-5 Investment Visas and Indirect Construction Jobs--What you need to know

Posted by Michael Pollak on Tue, Nov 05, 2013 @ 8:36 PM

describe the imageLawyers representing EB-5 investors should be aware of the latest USCIS
adjudications trend challenging claims of construction jobs by means of
requiring third-party validation of construction data and regional industry
standards. Immigration lawyers should now ask the Investor's selected Regional
Center to provide such supporting evidence in advance of filing the I-526
petition or in anticipation of the RFE.

Ever since Matter of Ho, 22 I&N Dec. 206 (Assoc. Comm'r 1998),
USCIS has required the submission of a "comprehensive business plan" in the Form
I-526 filing to clarify the investor's claimed job creation projections. But
recently, the USCIS has expanded its standard requiring a more detailed and
verified analysis of any construction phase jobs.

When a Regional Center project claims a construction period exceeding 24
months, EB5 investors can claim direct, indirect and induced jobs resulting from
the construction phase activities and qualified construction expenditures. When
the business plan making such job claims is submitted to the USCIS as part of
the I-526 petition, the agency will apply the following test:

"Because construction will surpass two years, the petitioner must present a business plan with a more detailed and itemized construction timeline showing all relevant phases of the construction effort. The business plan must also provide transparent, objective, and verifiable data illustrating that the proposed construction timeline and budget are within a reasonable range when compared to industry standards."

In failing to meet this standard with an initial I-526 filing package, the
USCIS will issue an RFE for such records. In response, the Regional Center will
need to supply associated investors with an evidence package that contains
third-party opinions verifying or explaining business plan claims relating to
construction activity and assumptions. These may include following:

  • General Contractor's Detailed Construction Timeline. This
    report breaks down all phases of the build-out, by date and subcontractor
    specialty/trade. The timeline should provide expected start and completion dates
    for each distinct activity.
  • Third Party Validation of Construction Timeline. This
    expert opinion assesses the project's construction timeline claim and measures
    the timeline against regional industry norms.
  • Third Party Validation of Construction Costs. This expert
    opinion assesses the itemized budget costs and compares them with verifiable
    data, analysis, and industry standards. Reliable construction costs are
    important to the USCIS because these are direct inputs to the economic modeling
    that calculates job creation.

These are just a few examples of how a comprehensive business plan claiming
construction jobs may effectively utilize third-party verification of critical
construction data, budgets, timelines and assumptions to ensure Matter of Ho
compliance. Given the emerging USCIS trend in this area, EB5 lawyers should be
prepared to supply exhibits which contain transparent, objective, and verifiable
data illustrating that the proposed construction timeline and budget are within
a reasonable range when compared to industry standards. And note that such
third-party construction experts are not in lieu of the Regional Center's
economist calculating the job creation, but are rather in addition to the
economist.

USCIS: Backlog in Processing of EB5-I526 Immigrant Investor Petitions

Posted by Michael Pollak on Wed, Sep 18, 2013 @ 2:51 PM

Eb-5 visa, investment visa, I526USCIS has released an update on the processing times for I 526 Investor Petitions also known as the Immigration Petition for Alien Entrepeneurs.  Petitioners have grown accustomed to adjudication of these Petitions taking 6-9 months.  The latest update provided by USCIS is that Petitioners can expect these Petitions to take 16 months to approve.  As of July 31, 2013, USCIS is working on I526 petitions filed in March 2012.  

This delay in processing can have a significant impact where the Petitioner has invested $500 000 to $1 million dollars in a business but would have to conceivable wait 16 months for I526 approval and then a minimum of an additional 6 months for consular processing to be able to come to the United States to manage their investment. 

How to Qualify for an EB-5 Investor Visa

Posted by Michael Pollak on Sun, Jan 13, 2013 @ 7:14 AM

Immigration attorney Karen-Lee Pollak explains how to get a green card by investing in the United States. 

eb-5 visaThe EB-5 or Investor visa is a United States visa created by the Immigration Act of 1990. This visa provides a method of obtaining a green card for foreign nationals who invest money in the United States and may be attained in three ways.

 Thanks for your comments, questions, and suggestions regarding immigration topics.

Purchasing a US Green Card | EB-5 Visa

Posted by Karen Pollak on Mon, Jun 20, 2011 @ 11:44 AM

This is the last part of a four part series on immigrating to the United States that will be appearing in BusinessBrief Magazine. BusinessBrief is a South African business management Magazine that provides the decision makers in business with the information they need to make better business decisions.

PURCHASING A U.S. GREEN CARD-AN ALTERNATIVE OPTION FOR HIGH NET INDIVIDUALS

dallas immigration lawyerFor high net individuals wanting to live in the United States, the EB 5 Investment visa is a viable option.  This visa is available to immigrants who invest in and manage U.S. companies that benefit the U.S. economy and create or save at least 10 full-time jobs for U.S. workers.  To qualify under the EB-5 category, the new enterprise must: (1) be one in which the person has invested (or is in the process of investing) at least $1 million (or at least $500,000 if investing in a “targeted employment area,”(2) benefit the U.S. economy; and (3) create full-time employment for at least 10 U.S. workers. The investor must also have at least a policy-making role in the enterprise. 

When an investor first makes the investment, they get a “conditional” green card good for two years.  At the end of that time they must prove that they have maintained their investment and have created or saved at least 10 jobs before their conditional status will be removed and they become regular green card holders. 

THE $500,000.00 OPTION

This option is available to investors who invested in a designated high employment area or rural area or who invest in what is termed a “Regional Center”.  Investment in a Regional Center does not require that the immigrant investor’s enterprise itself employ 10 U.S. workers. Instead, it is enough if 10 or more jobs will be created directly or indirectly as a result of the investment. This program also differs from the regular EB-5 provisions in that it permits private and governmental agencies to be certified as Regional Centers if they meet certain criteria.  Several private and government investments throughout the United States have been approved as Regional Centers.

THE MILLION DOLLAR GREEN CARD

In order to qualify for this green card, (1) each investor must invest (or be actively in the process of investing) the above amount in a new commercial enterprise and (2) create at least 10 qualifying full-time jobs.  Any for-profit entity formed for the ongoing conduct of lawful business may serve as a commercial enterprise.  An existing business may qualify if an investor “restructures” or “expands” it.  However, the term “new commercial enterprise” does not include noncommercial activity, such as owning and operating a personal residence or nonprofit enterprise. Investments creating a new enterprise but failing to create 10 new jobs will also fail to qualify for EB-5 classification.

An investor also can create a new enterprise by expanding an existing business. An expansion resulting in an increase of at least 40 percent in the net worth of the business or in the number of employees of the business will satisfy the visa requirements.

“ENGAGING” IN A NEW COMMERCIAL ENTERPRISE

The petitioner must either be involved in the day-to-day managerial control of the commercial enterprise or manage it through policy formulation. The regulations state that if the EB-5 petitioner is a corporate officer or board member, or, in the case of a limited partnership, is a limited partner under the provisions of the Uniform Limited Partnership Act (ULPA), he or she satisfies the requirement of engaging in the management of the new commercial enterprise.

Source of Capital

The regulations require filing documentation to establish that capital used in the new enterprise was acquired by legitimate means.  Examples include foreign business registration records; personal and business tax returns, documents identifying source of funds and/or certified copies of all pending governmental civil or criminal actions and proceedings against the investor within the past 15 years.

Managerial Capacity of the Investor

An EB-5 immigrant must be involved in the management of a new commercial enterprise to qualify for a visa.  The petitioner must either be involved in the day-to-day managerial control of the enterprise, or manage it through policy formulation.

EB-5 PROCEDURES: REMOVING THE CONDITIONS

Assuming USCIS approves an investor’s petition, the investor becomes a conditional resident for two years following the approval of an adjustment application or admission under an immigrant visa.  An immigrant investor’s petition to remove the conditions is filed two years later accompanied by evidence that the individual invested or was in the process of investing the required capital, and that the investment created or will create 10 full-time jobs.  Once approved, the Investor and his immediate family will obtain permanent green cards--to live and work in the United States permanently. 

EB-5 Investor Visa Program May Undergo Significant Changes

Posted by Karen Pollak on Thu, May 19, 2011 @ 8:41 PM
immigration lawyer dallasU.S. Citizenship and Immigration Services (USCIS) today proposed significant enhancements to the administration of the USCIS Immigrant Investor Program, commonly referred to as the EB-5 Program—transforming the intake and review process for immigrant investors as part of the Obama administration’s continued commitment to improve the legal immigration system and meet our economic and national security needs for the 21st century.

The EB-5 Program makes 10,000 visas available annually to immigrant investors who invest in commercial enterprises that create at least 10 U.S. jobs. EB-5 investors may petition independently or as part of a USCIS-designated Regional Center.

“Congress created the EB-5 Program in 1990 to attract investors and entrepreneurs from around the globe to create jobs in America,” said USCIS Director Alejandro Mayorkas. “We are dedicated to enhancing this program to ensure that it achieves that goal to the fullest extent possible.”

United States Citizenship and Immigration Service (“USCIS”) proposed three fundamental changes to the way it processes EB-5 Regional Center filings. First, USCIS proposes to accelerate its processing of applications for job-creating projects that are fully developed and ready to be implemented. USCIS will also give these EB-5 applicants and petitioners the option to request Premium Processing Service, which guarantees processing within 15 calendar days for an additional fee.

Second, USCIS proposes the creation of new specialized intake teams with expertise in economic analysis and the EB-5 Program requirements. EB-5 Regional Center applicants will be able to communicate directly with the specialized intake teams via e-mail to streamline the resolution of issues and quickly address questions or needs related to their applications.

Third, USCIS proposes to convene an expert Decision Board to render decisions regarding EB-5 Regional Center applications. The Decision Board will be composed of an economist and adjudicators and will be supported by legal counsel.

This proposal will be online until June 17, 2011, for public comment—providing stakeholders an opportunity to offer feedback on the proposed changes to the administration of the EB-5 Program

Immigrant Entrepreneurs Critical For Long-Term US Economic Growth

Posted by Michael Pollak on Wed, Feb 09, 2011 @ 3:50 PM

The Brookings Institution releases report:  Immigration and High-Impact, High-Tech Entrepreneurship by David M. Hart and Zoltan J. Acs.

immigration lawyer in dallas txThe study shows that immigrant entrepreneurs play a critical role in founding high-impact, high-tech companies – that serve as drivers for long-term economic growth.  The United States continues to attract the world's brightest, most innovative and motivated risk-takers. 

 

immigration lawyer in dallas txAbout 77 percent are U.S. citizens, who are well-educated and have substantial professional experience. The evidence does not rule out the possibility that the immigrant entrepreneurs “crowd out” comparable natives, but teh authors are incline toward the view that immigrants and natives complement one another. Three policy options are discusses that might expand the pool of potential high-impact, high-tech immigrant entrepreneurs over the long-term: clearing the green card backlog, easing the pathway from student visa to work visa to green card, and creating a “point system” for a limited number of unsponsored green card applicants.

Read more...

 

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US Immigration Basics for South Africans | Green Cards (Part 3)

Posted by Karen Pollak on Fri, Sep 10, 2010 @ 7:34 AM

The Most Common Green cards issued to South Africans

Employment Based Immigrant Visas
In order to receive an immigrant visa through employment, you must have a job offer from a U.S. employer, specific education and/or work experience and in some cases there must be no American willing or able to take that particular job.

In addition, visas are allocated by categories of preference. Some employment based visas include:

  • EB1 - Immigrants with extraordinary ability in business, arts or sciences, Managers and Executives of multi-national businesses and Outstanding professors or researchers
  • EB2 - Immigrants with job offers and an advanced degree or a Bachelor’s degree and 5 years of experience
  • EB3 - Immigrants with job offers and a Bachelor degree or skilled workers 
  • EB5 - Immigrant investors with substantial funds invested in the United States.  The investor must be willing to invest $1 million dollars in a U.S. business or $500,000 in a regional center where there is typically a high unemployment rate or is in a rural area.

UIS ImmigrationIn the case of an EB2 or EB3 Immigrant visa the employer must go through a process called Program Review Electronic Management (PERM). This is a procedure by which the U.S. Department of Labor (“DOL”) certifies there is a lack of qualified U.S. workers in your job category.  The employer must advertise the position available, interview any potentially qualified employees and demonstrate that there are no U.S. workers qualified to fill the position. 

Family Based Immigrant Visas
U.S. Citizenship and Immigration Services (USCIS) issues Immigrant visas (Green Cards) based on a quota system. For Family Based Immigrant visas, a system of preference categories is used in addition to the quota system.

There are four basic categories of family preference:

  • Adult sons and daughters of United States citizens
  • Spouses and adult sons and daughters of lawful permanent residents or Green Card holders 
  • Married children of United States citizens 
  • Brothers and sisters of United States citizens

A U.S. citizen can file the petition on behalf of his/her:

  • Husband, wife, or child under the age of 21 
  • An unmarried child over the age of 21 
  • Married child of any age 
  • Brother or sister if the U.S. citizen is at least 21 years old 
  • A parent if the U.S. citizen is at least 21 years 
  • Fiancé (K-1 visa)

The U.S. Citizen's spouse, parent or child (under 21) is considered an Immediate Relative, and as such no preference quota is required. That means a visa is immediately available for that family member.  Marriage to a U.S. citizen does not afford you immediate lawful status - you must file an immigration petition.

A lawful permanent resident can file the petition on behalf of his/her Husband or wife and Unmarried child under 21.  A lawful permanent resident cannot file a green card petition for his or her fiancée.

The application process for Family Based Immigration includes submitting a petition to the United States Citizenship and Immigration Service or USCIS. The application waiting period will fluctuate, but usually takes several months to several years depending on the family relationship.  A United States citizen must be at least 21 years of age in order to sponsor a relative for immigration.

This list of visas is by no means exhaustive.  There are several other visas available for South Africans which will largely depend on your education and experience.  Your best bet for getting any professional help with your immigration situation is to hire an experienced immigration lawyer. Ask friends for referrals or go to the website of the American Immigration Lawyers Association (AILA). 

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