Investors, Traders and Entrepreneurs (E visas and Permanent Residence)

Since September 30, 2015 Congress has considered several immigration bills that would have completely overhauled the EB-5 program. All of us in the space, especially attorneys, had prepared ourselves for the inevitable change of the current EB-5 regulations. We all knew that the minimum capital threshold requirement would increase to $800,000. In addition, the targeted employment area (“TEA”) definition would change, thereby eliminating important metropolitan areas such as New York City from consideration. All of this was occurring against the backdrop of Congress trying to pass the appropriations bill so that our government would not run out of money.

Congress has been wanting to revamp the EB-5 program for a significant period of time. All of the recently introduced EB-5 bills contained measures to increase compliance and make the program safer for foreign investors that were seeking a “Green Card”.  Developers and attorneys lobbied for reform that would not be onerous and would provide a certain amount of compliance. Most of us did not want the new legislation to be the “death knell” of the EB-5 program.

Well, we all got our wish. Congress voted to renew the EB-5 program in its present state until September 30, 2016.  What will happen between now and the expiration of the legislation is anyone’s guess.  But I think the writing is on the wall. Congress seeks to reform the EB-5 program on two fronts. The first is the minimum investment capital threshold requirement. It is a foregone conclusion that prior to September 30, 2016 Congress will pass EB-5 legislation that increases the minimum investment in a targeted employment area (“TEA”) to $800,000. The second is on the compliance front. Congress will include provisions in the new bill that require “on-site audits” of projects and regional centers.  In addition, Congress will require all principals that have equity in a regional center to submit to a Federal background check. This will ensure that the players in the EB-5 space are not unscrupulous characters.

All in all, the changes would be welcome by most in the industry. The impact that the higher investment amount would have in China and other markets is something that is yet to be seen. All of us though are breathing a sigh of relief for the EB-5 extension.

 

As Congress works to pass renewal legislation to the EB-5 Regional Center Pilot Program that will expire on December 11, 2015, most observers in the EB-5 space have no idea what will happen. Initially most of us thought that Congress would not have the time to review and vote on several new bills that would overhaul the program. Everyone guessed that Congress would “punt the ball” and pass interim legislation extending the program again until May 2016. Well as of this afternoon, it looks like Congress might actually pass one of the bills. The bill that looks most likely to pass would completely redefine the requirements of an eligible EB-5 regional center based project. The minimum capital threshold requirement would jump from $500,000 to $800,00 for a project in a TEA census tract. A project developed in a non-TEA census tract would stay at $1,000,000.

The bill contains a 5 year extension of the EB-5 Regional Center Pilot Program. It also includes an enhanced compliance provision. The compliance section of the bill provides for annual site visits by USCIS personnel. USCIS personnel would be authorized to request job creation documents from the project developer and/or regional center. It would also require that ownership of regional centers be limited to individuals who are nationals or permanent residents of the United States.

Greater compliance and transparency in the EB-5 program translates into a new background check that would be required of all principals of regional centers. As a result, no person shall be permitted to be involved with any regional center, new commercial enterprise, or job-creating entity if the person has been found to have committed  a criminal or civil violation involving fraud or deceit within the previous 10 years; a civil violation resulting in a liability in excess of $1,000,000 involving fraud or deceit; or a crime resulting in a conviction with a term of imprisonment of more than 1 year. The bill also limits ownership of regional centers where the principal has a final order entered by the U.S. Securities and Exchange Commission for a violation of law or regulation involving fraud or deceit.

As part of the bill’s compliance provision, principals of regional centers would have to execute an attestation that would certify that their regional center was in full compliance with all SEC regulations. All regional centers will have to pay an annual fee in order to continue with their USCIS designation. The fee for regional centers that have 20 or more investors the preceding year shall be $25,000.00 Those regional centers with less than 20 investors shall be $10,000.

Also, the ability of investors to receive funds that have been gifted will be restricted. Gifted funds may be counted toward the minimum capital investment requirement only if such funds were gifted to the alien investor by the alien investor’s spouse, parent, son, or daughter, but not children, sibling, or grandparent and such funds were gifted in good faith and not to circumvent any limitations imposed on permissible sources of capital.

A bit of good news in the bill is that census tracts can still be combined (up to 12) and averaged in order to qualify a geographic area as a TEA. This seems to be a concession made to important metropolitan areas such as New York City that have benefitted from the EB-5 program.

The EB-5 picture should be come clear by the end of this week as Congress wrestles with a challenging task, an overhaul of the EB-5 Regional Center Pilot Program.

The Fox immigration team has expanded in size and scope.  We have welcomed two prominent attorneys; one to the Miami office and one to the New York office.  Before coming to Fox, Scott Bettridge (Miami) and Rogelio “Roy” Carrasquillo (New York) worked together to develop a significant practice that combines immigration and corporate representation, particularly involving Latin America and Puerto Rico.  Scott and Roy have skill and experience in handling complex corporate transactions, including  broad EB-5 experience.

Their addition greatly enhances both our corporate immigration and EB-5 practices.  The Fox EB-5 team combines immigration, corporate, tax, pre-immigration tax planning, IP and Real Estate attorneys in our comprehensive nation-wide practice. Scott and Roy are welcome additions and will assist Fox clients in navigating the tricky immigration waters.  To learn more about our new partners, see Scott Bettridge’s bio page and Rogelio “Roy” Carrasquillo’s bio page.

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What will Congress do with the soon to expire EB-5 regional center program?

That is the question that most everyone in the EB-5 world is asking each other. Congress chose on September 30th of this year to “kick the proverbial can down the road” until December 11, 2015 with an interim extension of the current legislation. As of the date of the writing of this blog Congress has before it several bills that seek to extend the EB-5 Pilot Program.

The possible changes on the horizon include increasing the minimum investment amount to $800,000.00 for TEA’s and $1,200,000.00 for other areas. Since there has been no change in the capital contribution amount since the creation of the program, most think this amendment will proceed.

The other change that would be controversial would modify the definition of a targeted employment area. The TEA’s would be limited and potentially not include state designations based on aggregated census tracts. This could eliminate many TEA’s.

In addition, it is anticipated that the regional centers will come under greater scrutiny by USCIS. This could include more comprehensive and frequent reporting requirements, as well as the ability of the agency to suspend regional center designation for those centers that do not fulfill reporting requirements or have little or no business activity.

Congress will also examine whether regional center principals can be non-resident aliens. Most regional centers currently are owned by U.S. Citizens or lawful permanent residents.  There are many non-resident aliens that are interested in creating regional centers and developing projects, especially in South Florida.

Developers, as well as investors are rushing to complete exemplars for projects and file individual I-526 immigrant visa petitions in order to “grandfather” their projects and/or investor applications under the present statutory requirements. It is noteworthy however, that no one is certain that “grandfathering” will be part of the final legislation. Will this all be for naught?

What we can be sure of are that changes to the EB-5 regional center program will occur before the end of the year. The changes to the program will hopefully make it better. The program will survive.

 

If you’re waiting for your employment card or greencard to be issued, your wait may be slightly longer than usual by a few weeks. 

AILA (the American Immigration Lawyers Association) provided notice that there have been reports of delayed issuance of employment cards (EADs) and of US Permanent Residence cards.  The delay is not in the adjudication period, but rather in the amount of time between the date of an approval and the date when USCIS issues the EAD or greencard to the beneficiary. 

The delay is said to result from maintenance measures at one of the card-production facilities, which in turn necessitated the temporary transfer of card production processes to a different facility.  The timings are expected to return to normal sometime in the second half of September.

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Ms. Wadhwani is a partner in the Immigration Practice Group at Fox Rothschild LLP.  She may be reached at cwadhwani@foxrothschild.com.

 

I was fortunate to be invited to speak at the City of Miami EB-5 Summit on Affordable Housing a few weeks ago. I was a member of the panel that was comprised of attorneys, economists and other professionals in the EB-5 space. The City of Miami EB-5 Regional Center had sponsored the conference in order to discuss and explore the use of EB-5 capital in developing mixed-use projects that include affordable housing.

Copyright: rabbit75123 / 123RF Stock Photo
Copyright: rabbit75123 / 123RF Stock Photo

Mayor Tomas Regalado gave the key note address. He spoke of the need for affordable housing in the City of Miami and South Florida. According to Mayor Regalado the purpose of the summit was to attract developers and investor capital to projects that include an affordable housing component.

I discussed the use of EB-5 capital in Village Center mixed-use projects. I spoke about how attractive Village Center mixed-use projects are for developers and EB-5 investors. The village center concept includes retail, housing, office space, hotel and a village center. The concept includes substantial green space and pedestrian friendly boulevards. It is meant to be a space for living, working and enjoying life. The Village Center would provide residents with cultural and social activities. That in turn would create the fabric of the community.

Due to a lack of affordable rental housing in Miami the project is one that is financially attractive not only to investors, but also banks that provide construction financing. The abundance of green space in the projects combined with the potential to include health and wellness centers make the space ideal for families and senior citizens.

Currently there are several village center mixed-use projects on the drawing board in the South Florida area. They are slated for municipalities in Coral Gables, Miami and Aventura. All of them provide for rental housing and all include a village center.

During my presentation I stressed that EB-5 projects need to be marketable. Investors are very savvy and look for projects that have the greatest probability of financial success. The concept of the project is important, but so is the capital stack. The most successful EB-5 projects are those where the EB-5 component is less than 30% of the capital stack. Projects that are well capitalized and financed are usually successfully developed. Investors look for an assurance that the project they are investing in will be completed. The completion of the project guarantees the investor their immigrant visa. The return of the investor’s capital is more likely guaranteed in a project that is financially successful. The village center mixed use project is a good option for creating affordable housing in South Florida utilizing EB-5 capital. The City of Miami accomplished it goal of educating real estate developers and others concerning the benefits of EB-5 capital.

In our continuing series of reports, Charles (“Charlie”) Oppenheim, Chief of the Visa Control and Reporting Division, U.S. Department of State, shares his most recent analysis of current trends and future projections for the various immigrant preference categories with AILA (the American Immigration Lawyers’ Association).

Below are highlights from the most recent “check-in with Charlie” (August 14, 2015), reflecting his analysis of current trends and future projections for the various immigrant preference categories.

This month, Charlie answers a series of questions from the public, with no individual commentary on the immigrant visa preference categories for this month or next:

QUESTION 1: Last month you were hopeful that EB-2 India/China would hold steady or possibly advance for September. However both categories have retrogressed significantly. What caused this to occur?

ANSWER: The September retrogression of EB-2 China and India can primarily be attributed to skyrocketing demand for EB-2 Worldwide, which has left fewer numbers available for India and China. Currently, the availability of visas for India and China is largely driven by Worldwide demand. Earlier this year, EB-2 Worldwide demand was around 2,400 per month and started creeping up in March. In June, demand peaked at 6,700, and with July usage totaling 4,400 it was necessary to take corrective action for EB-2 China and India to limit future number use.

Similarly, fewer EB-1 numbers are available to fall down to EB-2 China and India. During the second quarter of the fiscal year, 9,300 EB-1 numbers were used. That jumped to 13,500 EB-1 numbers in the third quarter.

In particular, overall EB-2 India usage is down significantly this year due to the fact that fewer unused numbers are available for this category. Last fiscal year, EB-2 India used approximately 23,000 numbers. This year, it is expected that EB-2 India will use approximately 7,500 numbers. This is approximately 9,700 fewer numbers than that which were used in FY 2013.

 

QUESTION 2: How likely is it that EB-2 India and China will advance significantly with the start of the fiscal year on October 1?

ANSWER: It remains to be seen what will happen in October as we enter the new fiscal year.

 

QUESTION 3: Is it expected that all numbers in all categories will be exhausted by the end of the fiscal year?

ANSWER: Yes. All visa numbers in all categories will be exhausted. There has been some concern about EB-3 number use because there appeared to be a decrease in demand which caused the Worldwide cut-off date to advanced rapidly. There is sufficient EB-3 India applicants in the pending demand file to ensure that all “otherwise” unused numbers will be used this fiscal year.

 

QUESTION 4: The “Visa Modernization” proposal promises to refine the monthly allocation of visas, increasing the number of visas allocated during the first three quarters, and implementing new processes for allocation during the final quarter of the fiscal year. Can you please elaborate on this plan? Do you expect to implement the changes effective 10/1/15?

ANSWER: This is still a work in progress but members should be happy with what is ultimately rolled out. Some changes have already been implemented. As stated in the Visa Modernization proposal, members may see more aggressive cut-off date movements for some preference categories earlier in the year. Similar movement occurred earlier this year with regard to EB-2 India; advancement of that category started much earlier than in prior years to allow USCIS sufficient time to complete processing of the cases, many of which were EB-3 upgrades, earlier within the fiscal year. However, aggressive movement earlier in the year can have “negative” consequences during the final quarter when there are fewer numbers available. As a result it could be necessary to take corrective action if it becomes clear that there would be fewer numbers available from other categories.

In addition to accelerating cut-off date movements earlier in the fiscal year, other options are being explored. As plans are refined, the information will be made available to the public.

You may access the August 2015 Visa Bulletin here and the September 2015 Visa Bulletin here.

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Alka Bahal is a Partner and the Co-Chair of the Corporate Immigration Practice of Fox Rothschild LLP.  Alka is situated in Fox Rothschild’s Roseland, New Jersey office though she practices throughout the United States and at Consulates worldwide. You can reach Alka at (973) 994-7800, or abahal@foxrothschild.com.

The US Department of State (State Department or DOS) computer systems are not expected to be online again before next week after experiencing “technological systems issues” (a hardware failure) on June 9th. This information came from the State Department yesterday, June 17th, in an update following their initial announcement regarding the problem last Friday, June 12, 2015.

This has caused DOS’s Bureau of Consular Affairs to experience issues affecting overseas passport and visa systems.  This systems issue is without restriction to particular countries, documents or visa types.  Indeed, the effect seems to reach everyone from the nonimmigrant visa applicant, to the US citizen in need of a passport abroad.

Assistance from the State Department is available to nonimmigrant visa applicants who need to travel for urgent humanitarian reasons and DOS has indicated that it is always able to issue an emergency passport to a US citizen who is overseas and has an urgent need to travel.

Yet, one should be prepared that visa appointments and issuance of some visas will be delayed.  A June 15th update from the State Department said that some visa applicants will “be contacted directly to reschedule their appointments”.

Affected parties will want to seek the guidance of immigration counsel to assess potential impacts on employment start dates and such questions as whether in-country processing is available and should be used for a change or extension of nonimmigrant status instead of processing abroad, among other possible issues.

DOS stated that the “failure is preventing the Department from processing and transmitting biometric data checks at visa-issuing embassies and consulates.”  This affects the Department’s ability to meet its legal  requirements to screen  visa applicants before issuing visas for travel.  The State Department offered its apologies to those affected and indicated that it has more than 100 private and public sector computer experts working “around the clock” to resolve the problems as quickly as possible while of course keeping in mind its responsibility to screen visa applicants as part of its critical border security responsibilities.

DOS stated that it will continue to provide regular updates on their website, travel.state.gov.

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Catherine Wadhwani is a Partner in the Immigration Practice Group at Fox Rothschild LLP.  She may be reached at cwadhwani@foxrothschild.com.

 

In the spring of 2013, Customs and Border Protection changed its procedures and implemented an automated process for generating I-94 admission records electronically. As such, foreign visitors to the U.S. arriving via air or sea no longer need to complete paper Customs and Border Protection Form I-94 Arrival/Departure Record or Form I-94W Nonimmigrant Visa Waiver Arrival/Departure Record (for those using visa waiver/ESTA).

This not, however, relieve foreign nationals from their obligation to present documents evidencing their status in the U.S.   Proof of status may be needed by employers, schools/universities or government agencies.  Accordingly, foreign visitors MUST access their CBP arrival/departure record information online to retrieve a paper print out.

We recommend that all foreign travelers access their electronic I-94 records by visiting www.cbp.gov/I94 and printing a hard copy of the record as soon as possible upon your arrival into the U.S. This is now the only mechanism by which foreign nationals can retrieve I-94 record information, if no paper I-94 card was issued into the passport upon arrival into the U.S.

It is important that foreign nationals retrieve and review their I-94 record as soon as possible after entry to verify that the record reflect the correct visa status and expiration date.   The I-94 record controls the term and length of admission to the U.S. so accuracy in the record is critical to every foreign national’s status in the United States.

In generating the electronic I-94 record, CBP converts travelers’ arrival/departure information automatically from their electronic travel records. This means that, by and large, the information imported into the I-94 records system is information entered by hand by airline personnel (not government officials).  As such, it is imperative that you are precise when providing your information to the airline and vigilant with regard to managing flights (if you fail to cancel a booked flight without enough notice, it could cause an incorrect record to be generated indicating a departure, which will then have to be corrected.)

CBP continues to issue a paper form I-94 at land border ports of entry.

Information from CBP on the I-94 Process:

Upon arrival, a CBP officer stamps the travel document of each arriving non-immigrant traveler with the admission date, the class of admission, and the date that the traveler is admitted until. If a traveler would like a paper Form I-94, one can be requested during the inspection process. All requests will be accommodated in a secondary setting.

Upon exiting the U.S., travelers previously issued a paper Form I-94 should surrender it to the commercial carrier or to CBP upon departure. Otherwise, CBP will record the departure electronically via manifest information provided by the carrier or by CBP.

This automation streamlines the entry process for travelers, facilitates security and reduces federal costs. CBP estimates that the automated process will save the agency $15.5 million a year.

For more information and for answers to frequently asked questions, see the I-94 Fact Sheet.

The CBP INFO Center offers questions and answers for I-94.

 

Happy travels!

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Alka Bahal is a Partner and the Co-Chair of the Corporate Immigration Practice of Fox Rothschild LLP. Alka is situated in Fox Rothschild’s Roseland, New Jersey office though she practices throughout the United States and at Consulates worldwide. You can reach Alka at (973) 994-7800, or abahal@foxrothschild.com.

 

The US Government recently streamlined procedures for E visa applications, allowing easier and quicker cross-border travel to the US from Canada.  Applicants applying to renew their E visas may now submit minimal supporting documentation to the consulate, whereas, previously, the consulate required in depth evidence and material prior to setting up a visa appointment.  You can find more information on the U.S. Consulate in Toronto’s E visa processing revised instructions here.

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Alka Bahal is a Partner and the Co-Chair of the Corporate Immigration Practice of Fox Rothschild LLP.  Alka is situated in Fox Rothschild’s Roseland, New Jersey office though she practices throughout the United States and at Consulates worldwide. You can reach Alka at (973) 994-7800, or abahal@foxrothschild.com.