New Presidential Proclamation: Overseas L, H-1B, H-2B and J applicants are out of luck (Canadians are OK though).

New Presidential Proclamation issued on June 22 (which was not tweeted before hand).

Click here to read the proclamation in its entirety in the event you may view our interpretation as “fake news” — we aim to please.

Those applying for new H-1Bs, H-2Bs, Js, and Ls overseas will not have visas issued to them. The visa suspension includes all dependents. This will last until December 31, 2021.

Note we said “overseas” — if you are in the United States applying for these visas, then you should be okay. And there are other exceptions to the visa suspensions above which deal with those entering the US to provide temporary labor essential to the U.S. food supply chain, medical care/research professionals involved with COVID-19, and a catch all to include those who are necessary to facilitate the economic recovery. The last category is very broad and all you have to do is to convince staff at the local US Embassy.

And as it says in the header, this proclamation does not apply to Canadians. (I could go into detail about immigration law particularities (Canadians not really needing visas in a lot of categories) and possible political pressure, but the end result is that if you are a Canadian national, the proclamation does not apply to you).

The earlier proclamation from April 22, 2020 still controls and has been extended through this proclamation until the end of the year, December 31, 2020.

Obviously this is bad news for US companies, especially with those that need to move around their executives & managers (the L-1 intra-company transfer). We do a lot of L visas, so this will affect us, especially since a majority of our L applicants are applying overseas at their respective US Embassies (unlike H-1Bs where there is a substantial number who are applying from the United States — usually on their post-graduate OPT).

On a digression I wonder how this will affect ski resorts who rely on a lot of H-2Bs to staff their resorts. Our firm does NOT do any H-2Bs, but I do ski and love chatting with the friendly resort staff from all over the United States and other parts of the world (with a lot of Australians and New Zealanders in California and more Argentines & Brazilians in Colorado in my experience). They are mostly young people who are enjoying their time in the US, hanging out with other American workers at the resorts, and very dedicated to their work before they go home after the ski season. It seemed like a win-win for everyone. But I don’t think win-win is what the proclamations are going for.

Immigration Bans via Twitter

The new “immigration ban” that started as a late night tweet from the White House that proposed to end all legal immigration into the United States morphed into a highly modified order that pauses green card (permanent residency) for 60 days (with an option to continue).

Clearly this was a political gambit to draw attention away from the larger issues at hand (the tanking economy, mishandling of COVID-19, etc) to ensure that a political base that does not like immigration at all is enthralled by yet another political sleight of hand act.

The order specifically avoids all non-immigrant visas (H1Bs, E-2s, O-1s, etcetera) and just deals with permanent resident applications.  And it avoids the EB-5 investor immigrant category as well.

In further detail, you can see the summary below of those who are covered (meaning your application will be held in abeyance for at least 60 days, albeit longer) or not (meaning you can still go forward):

The suspension covers people if the following criteria are met:

– They’re outside the US on the effective date of the proclamation (11:59PM @ 4/23/2020).

– They don’t have an immigrant visa valid on the effective date.

– They don’t have an official travel document other than a visa.

The following categories are exempt:

– Any lawful permanent residents (green card holders)

– People seeking to enter the US on an immigrant visa as a physician, nurse, or other healthcare professional to perform medical research intended to combat the spread of COVID-19

– EB-5 immigrant investors

– Spouses of US citizens

– Children under 21 of US citizens or prospective adoptees

– People who further important US law enforcement objectives, as determined by DOS or DHS

– Members of the US Armed Forces or their spouses and children

– Special Immigrants (including Iraqi and Afghani translators and religious workers)

– People whose entry would be in the national interest as determined by DOS or DHS.

2020: Hurry Up and Wait (EB-5 New Adjudication Rules)

To start off the new year in 2020, USCIS issued new rules on how it deals with EB-5 visa petitions.

Up to this point, the initial EB-5 investor immigrant petitions (I-526) have been processed on a first-in, first-out basis.  The processing times have ranged from 32 months to 50 months.

Starting March 31, 2020, USCIS will only process the initial EB-5 petitions on a visa availability approach.  Without going into a long winded discussion about visa retrogression, the oversimplified explanation is that they will only process the I-526 petitions for applicants whose countries do not have a wait list.

Those countries with a wait list are currently China, India, and Vietnam.

So if one is an investment immigrant from _outside_ of those three countries, the I-526 petitions will be processed as it always has: first-in, first out (because visa allotments are usually available for all countries outside of China, India, and Vietnam).  There is speculation that it will speed up the process for those born outside of China, India, and Vietnam.  But that remains to be seen.

For those investor immigrants born in China, India, and Vietnam, obviously, it will mean longer wait times.  Yes, even longer than they are now.

Other alternatives to consider for those from China, India, and Vietnam are possible L-1s (setting up a US company and transferring in as an executive from the parent company), E-2s through a third country, cross chargeability (spouse was born in a different country), or an O-1 visa (for aliens of extraordinary ability).

The full body of the press release here:

https://www.uscis.gov/news/news-releases/uscis-adjusts-process-managing-eb-5-visa-petition-inventory

 

 

Finally! The New EB-5 Regulations are here.

So the anticipated day has arrived — today, November 21, 2019 — for those who are interested in utilizing an investment in the United States for an immigrant visa.

The new EB-5 regulations are in effect today!

There was a massive rush to get everything filed for foreign investors prior to today to take advantage of the old rules for investors.  Now that we all have had a chance to catch our breath, here are the changes forthwith:

The two most relevant highlights of the new regulations are:

1. Increase in the minimum investments amounts:  The current investment amount has been raised to $900,000 for the Targeted Employment Area (TEA)* from the original $500,000.  And for all other areas in the United States, the minimum amount investment is $1.8 million US (raised from $1 million).
2. TEA Designations are now to be handled by the Department of Homeland Security.  Previously, the states determined what was a TEA.

There are a few new regulations others dealing with derivatives and management participation and they can be found here on the USCIS website : EB-5 Immigrant Investor Program. 

* Targeted Employment Area is a designated census tracts that have an unemployment rate of 150% of the national unemployment rate.* This seems appropriate given that the EB-5 is based on the hiring of US workers and this will “on paper” funnel more EB-5 investment funds into actual areas that have high unemployment areas.  There has been criticisms (legitimate criticism, in my opinion) about how the TEAs have been carved up — please refer to this: NYC’s Hudson Yards & TEA.  There are a number of other news reports about the use of gerrymandering TEA tracts from the New York Times and the Wall Street Journal, but the above link doesn’t have a paywall.

So What’s Going to Happen Now:

In my opinion, I think the new regulations will probably mean the contraction of the EB-5 Regional Centers operating and of course the EB-5 program in general.  As I try to do, I always make the point that there are two variations of the EB-5 program (this post clarifies the distinction.)

The increased investment amounts — almost double — will probably depress demand for a while (along with the ever increasing visa waitlist for Chinese investors).  EB-5 Regional Centers that aren’t on a strong financial footing will probably start to fail.  The infrastructure that has developed over the years (administrative staff, sales people and attorneys) will also shrink too.

So if you are interested in the EB-5 program, you should probably wait a few months to see how some of these programs are doing before doing down the Regional Center path.  And if you are going to go at it alone, it’s probably more important than ever to find a viable quality long term business that you will be able to start in the United States.

 

 

Update: EB-6, Parole for International Entrepreneurs

 

Quick update:

The Department of Homeland Security just put out a notice to remove the International Entrepreneur Rule.  So they are moving ahead to dismantle this rule.

Please see our earlier post on the subject here.

The notice in part reads:

“DHS is now proposing to eliminate the IE Final Rule because the department believes that it represents an overly broad interpretation of parole authority, lacks sufficient protections for U.S. workers and investors, and is not the appropriate vehicle for attracting and retaining international entrepreneurs.” 

It’s unfortunate because the current administration just wants to dismantle this temporary workaround for the lack of a true “start-up” visa from the last administration.

The full notice from USCIS can be read below:

https://www.uscis.gov/humanitarian/humanitarian-parole/dhs-proposes-remove-international-entrepreneur-rule

“IT’S A TRAP!”: EB-6, Parole for International Entrepreneurs

 

Our office has gotten some calls about the “EB-6” visa that was announced last year and has been implemented at the start of 2018.  I put “EB-6” in quotes, because that’s not the official designation and it’s not permanent residence visa (i.e., green card).

The official designation is the International Entrepreneur Rule.  Essentially, if an entrepreneur qualifies, he or she qualifies for “parole” which is to grant a period of authorized stay.  The period of authorized stay allows you to stay in the United States but it is not green card or even a nonimmigrant visa.

The details of the International Entrepreneur Rule (the putative EB-6) can be accessed below:

Short Version

Long Version

Essentially, one can apply as an entrepreneur by fulfilling the following requirements:

• The applicant possesses a substantial ownership interest in a start-up entity created within the past five years in the United States that has substantial potential for rapid growth and job creation.
• The applicant has a central and active role in the start-up entity such that the applicant is well-positioned to substantially assist with the growth and success of the business.
• The applicant can prove that his or her stay will provide a significant public benefit to the United States based on the applicant’s role as an entrepreneur of the start-up entity by:
  • Showing that the start-up entity has received a significant investment of capital from certain qualified U.S. investors with established records of successful investments;
  • Showing that the start-up entity has received significant awards or grants for economic development, research and development, or job creation (or other types of grants or awards typically given to start-up entities) from federal, state or local government entities that regularly provide such awards or grants to start-up entities; or
  • Showing that they partially meet either or both of the previous two requirements and providing additional reliable and compelling evidence of the start-up entity’s substantial potential for rapid growth and job creation.

THE WARNING

While the International Entrepreneur Rule may be useful for those who can’t qualify for an E-2 or an EB-5 or need some time to grow their company until they can qualify for another category, there is a huge caveat.

In one of the government’s press releases concerning the International Entrepreneur Rule (referred to as the IER, they specifically state (emphasis all mine):

“While DHS implements the IER, DHS will also proceed with issuing a notice of proposed rulemaking (NPRM) seeking to remove the Jan. 17, 2017, IER. DHS is in the final stages of drafting the NPRM.”

You can actually read the release here in its entirety.

So there you go.  While they are announcing that the IER is going to be available, they are telling us that they intend to kill it as soon as they can.

It’s disheartening and disingenuous at its best.  It’s a trap for those whose options are limited at its worst.

 

 

 

Los Angeles Times Rehashes the EB-5 Immigrant Investor Program

The Los Angeles Times rehashes the EB-5 Immigrant Investor program in today’s article.

http://www.latimes.com/nation/la-na-eb5-visa-explainer-20180410-story.html

Of note is the reference at the end of the article which indicates that there will be increases in the minimum investment amounts in the EB-5 program.  The figures they cite may not be accurate – they may actually be higher when fully implemented.  But the investment threshold will increase.

Kushner & Trump and the EB-5 Regional Center Extension

First things first, the EB-5 Regional Center program has been extended until September 30, 2017 as part of a larger federal budget extension.  And as we’ve pointed out previously (but bears repeating), the extension affects the Regional Center program.  The “regular” EB-5 program involving individuals who invest does _not_ need to be extended like the Regional Center program (which started as a “Pilot Program” and never escaped that designation).  However, portions of the regular/direct EB-5 program will be affected by provisions that overlap with the Regional Center program – see this (link to previous article about EB-5 changes that impending).

Secondly, the EB-5 program has gotten its biggest boost in publicity due to President Trump’s in-laws (the Kushners) being linked to an EB-5 Regional Center that was pitching mainland Chinese investors.  There has been a title wave of articles on this subject and the EB-5.  The previous stories of fraud and criminality in previous EB-5 Regional Center projects has not garnered this much publicity.  The tie in to Trump and his family is fueling this and rightfully so.

See the articles below.

Jared Kushner’s sister puts EB-5 visas back in the spotlight.

Kushner Family Stands to Gain From Visa Rules in Trump’s First Major Law

The biggest issue is that the promoters of the program essentially made a direct link between one of the Kushners to Donald Trump.  It was a blunt *wink**wink* to the potential customers that this project is guaranteed to do well – because it is expressly _forbidden_  to make guarantees of any sort on an EB-5 project.  The funds have to be “at risk” in the target business.

We are not big fans of the Regional Center program – while useful and a boost to the US economy when used correctly, the amassing of such capital can create numerous opportunities for abuse.  We prefer clients go the direct route of the EB-5 visa – where one invests into a business and oversees it to create the 10 direct jobs.  However, we understand that with certain investors, they would prefer a more hands off vehicle – which is where the Regional Centers are handy.

The entire affair will inject more urgency to the reform/abolish debate to the EB-5 program as it the sunset date for the temporary extension nears in September of this year.

However, portions of the regular/direct EB-5 program will be affected by provisions that overlap with the Regional Center program – see this

EB-5 Impending Changes

 

Given all the turmoil with the new executive orders from the new administration in 2017 — along with the rumors of unsigned executive orders and proposed bills floating around — we’ve been trying to wait for some of the dust to settle before commenting on any of the substantive changes.

There is however, a proposed rule, which will change some aspects of the EB-5 Investment Immigrant Visa, some significantly.

Entitled, “EB-5 Immigrant Investor Program Modernization” — the main points are:

1. The minimum investment amount in a Targeted Employment Area will increase from $500,000 USD to $1.35 million USD.
2. All other areas will increase the investment amount from $1 million USD to $1.8 million USD.
3. The ability to designate Targeted Employment Areas will be taken away from the individual state and be given to the Department of Homeland Security.

The proposals are significant, raising the capital amount to 80%.  This will affect the EB-5 market in the United States.

These are proposed rule changes, so unlike other rumors of unsigned executive orders and proposed legislation that have little chance of passing (the proposed bill to abolish the EB-5 visa altogether), so they will most likely go into effect.

The comment period for the proposed rules above ends April 11, 2017.  At which point, USCIS can propose amended rules OR publish the final rule at any point afterwards.  Then the rules go into effect in 30 days.  So the earliest the changes can take place are May 11, 2017, although realistically speaking it will be sometime afterward.

Keep in mind that this separate from the EB-5 Regional Center program expiration which is set for April 28, 2017.  A lot of things happening in April — it is the cruelest month.

For those who are interested, the full body of the proposed rule changes are on the official government website, the Federal Register.

News of these changes have hit the mainstream financial press:

Barron’s

Forbes

Worldwide Passports for Sale

 

We essentially focus on US based immigration.  People who want to come into the United States to invest and set up businesses primarily.

It’s interesting to see what other countries are doing in this regard.  The US is unique because it has its focus on job creating enterprises with no US guarantees.  Other countries (such as Canada) allow direct investment into the government and the government guarantees the investment.  Other places require investment into properties (the US specifically forbids “passive” investments, which covers a lot of real estate transactions).

NPR did a segment on the sale of passports that was interesting to say the least.

Check it out:  Passports for Sale