News Analysis: Immigrant investor visa no longer wealthy Chinese's fast passage to America
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E-mail Xinhua, September 10, 2014
A U.S. immigration program that grants visas to foreigners who invest in U.S. businesses and create local jobs, has for the first time in its 24-year history run out of quota due to the overwhelming demand by Chinese applicants and will thus no longer be China's newly rich's fast passage to America.
The U.S. Department of State said the EB-5 program, which gives visas to those who invest at least 500,000 U.S. dollars and create at least 10 jobs in development projects, has hit its annual quota of 10,000 visas for the fiscal year, and will not receive new applicants until Oct. 1.
Although a new batch of 10,000 visas will be released after October, China's newly-rich will have to queue up for at least two years to get their "green card," or the permanent residency, as the demand for the EB-5 visa is expected to continue surging. In the past, the waiting period was no more than a year.
The U.S. Congress created EB-5 immigrant visa category, or the fifth employment-based preference, in 1990 for qualified foreigners seeking to invest in a business that will benefit the U.S. economy and create or save at least 10 full-time jobs.
The basic amount required to invest is 1 million U.S. dollars, although that amount is reduced to 500,000 U.S. dollars if the investment is made in a rural or high unemployment area.h The EB-5 program did not become popular until 2009 when the Congress decided to add construction jobs to the eligible employment created by EB-5 projects to make the visa application easier. The U.S. economy was then battered by the worst financial crisis in decades and was in desperate need of overseas money.
According to the American Immigration Lawyers Association, the number of Chinese applicants has increased by seven folds since 2007.
By law, no single country can be issued more than 7 percent of that total visa quota, but the U.S. government allows any visa slots unclaimed by other countries to be handed over to China.
In the fiscal year of 2013, the U.S. government issued more than 8,500 EB-5 visas, and Chinese applicants obtained more than 6,800. In recent years, Chinese applicants made up about 85 percent of the total visa grants.
Song Yi, an attorney with the New York-based Mona Shah & Associates, told Xinhua that there are about 10,375 applications in backlog, and new applicants are expected to wait for at least two and a half years to hear back from the U.S. government about whether their petitions have been successful. The waiting period will be doubled.
"I do not think it will dampen the enthusiasm of Chinese applicants, but psychologically they will find it more urgent to start their applications," she said.
With soaring Chinese demand, Song predicted the U.S. government and Congress will neither impede nor facilitate Chinese applications.
The EB-5 program is commonly seen as a good policy to shore up the U.S. economy and employment without costing U.S. taxpayer's money, so there is no reason to block it nor simply exclude Chinese investors.
The Obama administration proposed facilitating the EB-5 visa in the immigration reform bill. But since the immigration issue is so sensitive in America, the chances of a speedy passage of the bill on both sides of the Congress aisle are very slim, Song explained.
As the visa program gets popular, it is also abused by swindlers. In February 2013, the Security and Exchange Commission filed a lawsuit against a Chicago-based regional center owner who is charged of attempting to defraud more than 250 investors, mostly Chinese, of investments worth more than 150 million U.S. dollars. The project involved a hotel and conference center in Chicago.
Most recently, hundreds of foreign investors including 120 Chinese failed to get their green cards after pouring hefty money into a beef processing factory in South Dakota through a EB-5 project. Some of them launched a lawsuit against the middlemen.
Frank Ma, a graduate student of Michigan State University, planned to withdraw his plan to apply for an EB-5 visa with his parents' money.
"There are so many unreliable EB-5 agencies. For a wealthy family, a loss of 500,000 U.S. dollars is no a big deal. But for me, it's too risky," he said. Endi
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