To a lot of investors, the EB-5 visa quota is a mystery.  A majority of the information online, especially information only available in foreign languages such as mandarin Chinese, merely provides some conclusions without explaining how such conclusions are reached.  At Streit & Su, we respect our clients’ intellectual curiosity and pragmaticneed to understand this issue.  Here is an explanation of the EB-5 visa quota.

EB-5 visa is an employment-based visa, partly because it requires the creation of jobs.Under 8 U.S.C. §1151(d), the worldwide-level of employment-based immigrants for a fiscal year is 140,000 plus theunused number of family-based visa allowance in the previous fiscal year. Under 8 U.S.C. §1151(d) §1153, EB-5 visas shall not exceed 7.1% of the worldwide-level of employment-based immigrants. As a practical matter, almost nothing is ever left in the pool of family-sponsored visas. As such, most EB-5 professionals would say that EB-5 visa quota is approximately 10,000 per year (140,000*0.071=9940).

At least 3,000 of the EB-5 visa quota must be reserved for qualified immigrants who invested in a target employment area (“TEA”), which is commonly associated with regional center-sponsored investments.  No such reservation is provided for investments in non-TEAs.

No more than 7% of the EB-5 visa quota may be issued to citizens of each single foreign state, pursuant to section 202(a)(2) of the Immigration and Naturalization Act (“INA”), while no more than 2% may be issued to such single foreign state’s dependent area, such as colonies.

So, what is the deal for people born in mainland China, which is practically the only group that should be worried about the EB-5 visa quota at this juncture of the EB-5 history?

If you only apply the 7% limitation, you would reach a wrong conclusion that less than 700 visas may be issued to PRC citizens.  However, section 202(a)(3) of the INA provides that in a calendar quarter, if the total number of EB-5 visas available exceeds the number of visa actually issued, section 202(a)(2) shall not apply.  In plain English, that means if other countries do not use the EB-5 visa quota, people born in mainland China may use theirs.

Indeed, according to the Department of State, a total of 9,128 EB-5 visas were issued in FY-2014 to mainland-born petitioners.  No countries other than mainland China has even come close to the 7% limit.  This, in our opinion, has a lot to do with China’s jaw-dropping economic growth and ever-worsening pollution of its environment.  In our experience, EB-5 investors from metropolitan cities such as Beijing and Shanghai may only need to sell one of their apartments to provide sufficient liquidityfor EB-5.

It is important, nevertheless, to understand that each derivative beneficiary of an EB-5 petition also needs one visa under the current system. For example, if a father is petitioning for himself, his wife, and two unmarried children under the age of 21, this family would, in total, need 4 visas to move to the United States.  Such system is the primary cause for concerns ofEB-5 visa retrogression. 

We believe the above communication may be of interest to our clients and friends of our firm. However, such communication is for general information only. It is not, neither is it intended to be, a comprehensive analysis of the matters presented and should not be relied upon as legal advice. Should you have a specific question, please contact an attorney at Streit & Su PLLC.