EB-5 Visa Issuances Drop with the End of FY 2022

The stock market has been relatively calm in recent months if you compare it to the gyrations in the issuance of EB-5 (immigrant investor) visas, which numbered 37 in April, rose to 2,600 in September, and then fell to 596 in November. I suspect that the end of the fiscal year, on September 30, had something to do with these variations.

Congress has put an annual limit of 10,000 of these visas, which are very popular in China, but not used as much elsewhere in the world. The visas go to the investors, their spouses, and their children under the age of 21 when the investor puts up a minimum of (currently) $800,000 in a Homeland Security-approved, but not guaranteed, project, usually big-city real estate. The visas, after a waiting period, lead to permanent resident status (a green card).

The program has been marred by numerous scandals as unwitting alien investors have been cheated out of their money by States-side con men, often of the same ethnicity as the investors, but usually U.S. citizens. Another reason for the instability of the program is that Congress allowed the authorization of the main part of the program — which called for pooled investments handled by DHS-approved regional centers — to lapse from July 1 of last year to March of this year. Covid, of course, has contributed to the ups and downs.

Meanwhile, because of the popularity of the program with nervous — and wealthy — Chinese, another variable comes into play, the interactions among the flow of visa applications, the overall global ceiling (near 10,000) on them, and the long-existing law that allows no more than 7 percent of a visa category (under given circumstance) to go to people from a given nation. This complex process (just outlined here) has led to long backlogs of Chinese investors; they have invested their money, been approved by DHS, but have not yet been given their EB-5 visas. (An unknown number of them are in the States, anyway, with different visas.)

India is the only other nation with EB-5 backlogs, but those are on a much smaller scale.

Back to the issuance of EB-5 visas; these are the numbers for four months in 2022:

Note the relative stability, this fall, of the rest-of- the-world data as opposed to that of the Chinese.

Most, if not all, of the burst of activity in September for Chinese investors is the result of clearing up part of the backlog, not because of the approval of new applications. If one is a native of Mainland China, one needs to have an approved EB-5 visa application dated before January 1, 2016, to actually get a visa. As a result of these backlogs, the number of new applicants from that country has dropped to near zero in recent years.

The 7 percent ceiling is not on Chinese people generally, it is on those born there. People born in Taiwan and Hong Kong can — and do — secure EB-5 visas without regard to the limit on those born in Mainland China.

For more on this program, see here.