For five months straight now (January 2018 to May 2018), the Visa Bulletin, published by the U.S. Department of State, has shown a cut-off date of July 22, 2014, for the China EB-5 category. What does this mean for Chinese investors with approved I-526s currently waiting for visa availability (i.e. for their priority date to be earlier than the Chart A cut-off date) and what can we expect in future editions of the Visa Bulletin? Please read below for an explanation of how cut-off dates are established by the U.S. Department of State (“USDOS”) and what factors influence the dates listed in the Visa Bulletin.

Establishing a Cut-off Date

 Each fiscal year, which runs from October 1 to the following September 30, the U.S. is limited in the number of visas it can issue per immigration category and per country. Specifically, only 9,940 visas may be issued per year to EB-5 visa applicants and their qualifying derivatives. Of this number, nationals from any particular country may receive no more than 7% (or 695.8) of the visas.

Visas are issued on a first come, first served basis, which means the I-526 petition with the earliest priority date gets the next available visa and so forth. Further, if any one country has more than 695 visa applicants (e.g., China) and other countries do not use their allotted 695 visas in a given year, then the USDOS may give the remaining visas to visa applicants from oversubscribed countries on a first come, first served basis.

Due to low usage of EB-5 visas by non-Chinese in the past, Chinese nationals have been able to get more than 7% of the total EB-5 visas available per year. For example, in fiscal year 2017, Chinese nationals received 6,833 EB-5 visas or 68.7%. Naturally, as the number of Chinese EB-5 visa applicants increased, demand from this group could no longer be fulfilled in one fiscal year. This led to the creation of a cut-off date in May 2015. Since then, the cut-off date for China EB-5 has moved forward about 1 year and 3 months. Initially, the cut-off date was advanced each month by about 2-3 weeks. More recently, however, the cut-off date has moved forward more slowly, oftentimes with no movement from month to month.

USDOS determines cut-off dates by looking at the number of visa applicants who have registered with the National Visa Center (“NVC”). As of November 1, 2017, NVC had a waiting list of 30,259 visa applicants, including principal applicants and derivatives, for EB-5 visas. Of these, 26,725 (88.3%) were from China. Unfortunately, the cut-off dates do not take into account the number of visa applicants who filed or will file for adjustment of status (“AOS”) with the U.S. Citizenship and Immigration Services. This lack of information can render estimates of demand for visa numbers incorrect, leading to cut-off dates that do not accurately reflect visa availability. However, since the vast majority of China EB-5 visa applicants reside in China and will consular process through the National Visa Center, we can assume that estimates of demand of China EB-5 visa numbers are for the most part correct.

In establishing a cut-off date for a particular country and immigration category, USDOS officials look at the waiting list. For example, if only 695 visas can be issued to Chinese nationals for a particular year, then they look at the 695 EB-5 visa applicants with the oldest priority dates registered with the National Visa Center.[1] Assuming no China EB-5 adjustment of status applications are adjudicated or filed in that fiscal year, then those 695 registered applicants will get the 695 visa numbers available for that year. USDOS will therefore aim to have the cut- off date at the end of the fiscal year for China EB-5 match the priority date of the applicant with the 696th oldest priority date. USDOS is responsible for making this analysis before the beginning of a fiscal year. The expected cut-off date for September is then set as the cut-off date in the Chart B filing table of the Visa Bulletin, because it assumes that the first 695 visa applicants will all apply for and receive the available EB-5 visas during the year.

USDOS then budgets the available visa numbers for issuance by consular posts throughout the year, as opposed to a single month. Stated differently, instead of setting the 696th oldest priority date as the cut-off date at the beginning of the fiscal year, it opts to allocate the visa applications received, processed, and approved throughout the year. Otherwise, all 695 visas would be issued at the beginning of the year and the Visa Bulletin would show a “U” for unavailable the remainder of the fiscal year as no more EB-5 visa numbers would remain for Chinese nationals.

Factors Influencing the Cut-Off Date

Allocation of visa numbers throughout the fiscal year is necessary due to varying factors that can impact visa numbers available to oversubscribed countries. For instance, if USCIS receives 100 EB-5-based AOS applications, then the number available to those consular processing is decreased to 595. The result is that the China EB-5 cut-off date will move forward more slowly than expected or even retrogress so that only 595 Chinese visa applicants are issued visas in that fiscal year.

USDOS tries to predict how many visas will remain unused from other countries to allot those to applicants with the oldest priority dates from any country. To date, this has meant that all unused visas go to Chinese nationals since China is the only oversubscribed country and, therefore, Chinese applicants have the earliest priority dates in the EB-5 waiting list. If other countries begin to increase their use of EB-5 visa numbers in a particular year, then the number of available unused visas decreases. For example, if Vietnam,[2] Hong Kong, South Korea, and India each use their allotted 695 visas, then the number of unused visas will dramatically drop and much less will be available to China, resulting in either a slowdown of movement forward for the China EB-5 category or a retrogression of the cut-off date in the middle of the fiscal year.

Other factors impacting movement in the Visa Bulletin are the addition of dependents, postponement of visa interviews, withdrawals of I-526 petitions, and typical family size of EB-5 applicants from other countries. Of course, this list is not exhaustive.[3] As discussed above, these factors can lead to either faster movement or a slowdown of the EB-5 cut-off date for China. That the cut-off date for China EB-5 has remained at the same date for five months now does not mean that visa numbers are no longer available this year; it is simply the result of the varying factors described here.

With the understanding that many factors impact cut-off dates in the Visa Bulletin, predicting future movement in the China EB-5 category is clearly difficult. However, one thing is certain: certain time periods saw a large increase in the number of I-526 filings with USCIS. Each of these filings represents a visa applicant (or multiple for those with derivatives) that will be added to the waiting list at NVC. More specifically, surges in EB-5 filings occurred in September 2015, December 2015, September 2016, December 2016, April 2017, September 2017, and December 2017. As the China EB-5 cut-off date approximates these time periods, the cut-off date will slow down and, at times, retrogress.

To illustrate, consider that it took the Visa Bulletin seven months (April 2016 to October 2016) to issue visas to those whose I-526 petitions were filed in February 2014, six months (May 2017 to October 2017) to clear those who filed in June 2014, and at least seven months (November 2017 to present) for those with priority dates in July 2014. From July 1, 2015, to September 30, 2015, USCIS received 6,575 I-526 petitions compared to the 3,240 it received in that same time period in 2014, which includes July 2014. Therefore, if issuing visas to just those with priority dates in July 2014 is taking at least seven months, then issuing visas to those with priority dates in September 2015, which saw more than twice as many applicants than July 2014, will take at least 14 months. This is a liberal estimate as EB-5 has increased in popularity in other countries, thereby reducing the number of unused visa numbers that will be available to Chinese EB-5 visa applicants.

To summarize, a variety of factors may influence the movement, or non-movement, of the Visa Bulletin. These include usage by other countries, number of I-526 filings per month, family size, and number of AOS applicants, among other things. Accordingly, EB-5 applicants should be prepared for slow movement of the Visa Bulletin and also periods of no movement.

[1] In reality, due to the Chinese Student Protection Act of 1992, China’s employment-based visa numbers are reduced by 1,000 each fiscal year (300 from EB-3 and 700 from EB-5). This reduction is expected to last for several more years. Until then, China starts each fiscal year with 0 available EB-5 visa numbers and instead relies entirely on unused EB-5 visa numbers.

[2] Starting May 2018, Vietnam EB-5 will have a cut-off date of July 22, 2014, the same as China EB-5. Since Chinese applicants have the earliest priority dates in the overall EB-5 waiting list, they get first rights to the remaining unused EB-5 visa numbers for the fiscal year. Vietnam is expected to continue having a cut-off date in the Visa Bulletin for the upcoming fiscal year. However, as explained above, its cut-off date in October 2018 will be the priority date of the 696th Vietnamese EB-5 visa applicant waiting at NVC.

[3] See, for example, Footnote 1.