Long before you’re reading this blog, you have read or heard that quota backlogs in the EB-5 rural and high unemployment reserved categories are imminent. This blog does not attempt to speculate when the quota backlogs will begin, how they will affect rural applications, how they will affect high unemployment area applications and how long the backlogs will be. Rather, this blog discusses impacts of quota retrogression other than mere longer waiting periods.
Impact on Concurrent Adjustment
For many, the most significant impact of quota retrogression will be the inability to file concurrent adjustment of status with the EB-5 petition. Concurrent adjustment of status is only available if “a visa is immediately available” (meaning that the quota is current). This, of course, means that applicants in the US, such as applicants from India in the EB-2 and EB-3 line, will not be able to apply immediately for work documents and travel documents. However, for such individuals, the EB-5 wait is likely to be far shorter than the multiple decades wait in EB-2 or EB-3. Since most such applicants have H-1B status, which enables them to work and travel without a special EAD or Advance Parole document, they can still benefit from EB-5 if they have to delay the adjustment filing. When the quota becomes current for their EB-5 petitions, they are then able to file for adjustment of status, even though it is not concurrent with the I-526E filing. For those EB-5 applicants who already filed for adjustment of status before the quota backlog, their adjustment of status remains pending; and they do not lose eligibility for EAD and AP.
Impact on Age Out Children
The Child Status Protection Act freezes a child’s age during the entirety of USCIS processing of the I-526E petition. However, it does not protect the child’s age against quota backlogs.
Interestingly, the result of this is that, for applicants with a child in danger of aging out, if there is a quota backlog, the longer that it takes USCIS to process the application, the better it is for the child. For example, if there is a quota backlog, and if USCIS only takes three months to approve an application, after three months the child starts aging until the quota becomes current and the child can apply for an immigrant visa. On the other hand, if the quota backlog is five years and USCIS takes five years to process the application, the child’s age is frozen for five years; and the child can immediately apply for the immigrant visa once the quota is current.
It is a bit more complicated for families in the US applying for adjustment of status. If the family applied for concurrent adjustment of status when a visa number was available and, by the time the I-526E is approved, an immigrant visa is no longer available, and therefore the adjustment of status cannot be approved, does the child’s age remain frozen? This has been a controversial issue. In my opinion, the child’s age does remain frozen (I have written a separate article on that subject), and it appears that USCIS agrees.
Impact on When Investor Will Get CPR Status
This is a function of two factors. One is USCIS processing time, and the other is the length of the quota backlog. In many cases, it may be that the quota backlog has no impact on when the investor will get conditional permanent resident status. For example, if the quota backlog is 2.5 years and USCIS processing time is 2.5 years, there may be no practical impact on the investor’s waiting period.
Impact on Choice of Rural or High Unemployment Area Project
It has been taken as gospel that investing in a rural area project is the fastest way to get conditional permanent resident status. That may well be true. However, there is an alternate scenario. Rural projects have indeed been popular, and perhaps more rural area EB-5 petitions have been filed than anticipated. In addition, USCIS has been faithful to the language of the RIA in providing “priority processing” for rural area petitions. Since EB-5 number usage is based not on the number of applications filed but the number of applications that result in investors getting conditional residence, rural area number usage is far greater as a percentage of number of applicants than with high unemployment area petitions.
Also, relevant to the discussion on children above, rural area petitions are pending shorter than other petitions and therefore the child’s age is frozen for a shorter period of time.
For investors in projects that qualify as both high unemployment and rural, the investor’s choice of one or the other could have even greater significance than previously.
Impact on Sustainment Period
The impact of quota retrogression on the period of time during which the investor must sustain the investment depends on which definition of sustainment period prevails.
The regulatory definition of sustainment period is two years after conditional permanent residence. If this definition is applied, quota retrogression results in investors having to sustain their investments for an additional period of time, the length of which depends on the length of the quota backlogs.
If, on the other hand, the USCIS non-regulatory definition of sustainment period (2 years after investment), prevails, the quota backlog would not increase the sustainment period. In that event, the result could be that the investor could get their money back long before they ever get conditional permanent residence.
Impact on Amount of Time to Create Jobs
Investors have to prove the requisite job creation by the time of filing the I-829 petition 21-24 months after obtaining conditional permanent residence status. In the case of a rural area project, this might mean that job creation must have occurred within approximately 3 years of the date of the investment. However, if there is a 5-year quota backlog, this would create a multiple year delay in the investor obtaining CPR status and therefore a multiple year delay, plus two years, before job creation must occur.
Impact of the Trump Administration
No discussion of any immigration issue is complete without a discussion of the impact of the Trump Administration. EB-5 quota backlogs are no different. Believe it or not, the Trump Administration will likely have a favorable impact on EB-5 quota retrogression. Why? If Trump 1.0 is any indication, we should expect the following in Trump 2.0: slow down of I-526 processing; requirement of interviews for all I-485 applicants resulting in long delays; reduction of consular officers resulting in long delays for consular interviews; more RFEs resulting in longer processing times; more denials resulting in fewer immigrant visa numbers being issued. All of these likely impacts have the effect of reducing demand in any year for EB-5 immigrant numbers, which should result in EB-5 quota backlogs being shorter or, even more optimistically, non-existent.
In summary, the timing of the EB-5 quota retrogression and the length of the backlogs are shrouded in doubt. However, as this article explains, the impacts of EB-5 quota backlogs are more certain and more predictable even as we enter unpredictable times in EB-5 and indeed in all aspects of immigration to the U.S.
The material contained in this alert 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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