Solving EB-5 Retrogression without Changing the Law

Interest in the EB-5 immigrant investor program has surged in recent years. A major factor in the growing appeal of the EB-5 visa is the opportunity it provides for children of immigrant investors to attend U.S. schools and universities. This is reflected by the fact that roughly two-thirds of the 10,000 EB-5 visas available each year are used by spouses and children of investors. In fact, a larger portion of EB-5 visas go to family members than in any other employment-based visa category.

However, with the increasing demand for this family friendly visa program came a preliminary warning from the U.S. Department of State that the EB-5 category may soon reach its quota.

As retrogression in the EB-5 category appears more and more likely, proposals have called for a change in the way green cards are counted.  The most prominent of these proposals came from the U.S. Senate bill on comprehensive immigration reform last summer. The bill called for changing the current scheme, which includes children and spouses among the 10,000 total visas, to a plan in which only the principal investor would count towards that number. This small change would more than double the potential number of investments from approximately 3,500, to the full 10,000.

However, comprehensive immigration reform has been stuck in Congress for a year, and there is little indication that a vote is forthcoming. Meanwhile, many immigration attorneys are questioning the longstanding interpretation of the relevant sections of the Immigration and Nationality Act (“INA”) and wondering whether the impending EB-5 backlog could be resolved without an act of Congress.   

Section 203(b)(5) of the INA sets the quota for “qualified immigrants” that have “invested or [are] actively in the process of investing” in a new commercial enterprise. Logically, the only one actively in the process of investing is the investor, not the investor’s spouse and certainly not the investor’s children. This begs the question: why are spouses and children included in the 10,000 visa counts when the language of the law specifies that there may be up to 10,000 investors?

Furthermore, within the section of the INA relating to family members, Section 203(d), there is no mandate that family members be counted under the quotas. While spouses and children are “entitled to the same status, and the same order of consideration” as the principal, nothing requires that separate visa numbers be given to spouses and children. Thus, it seems that neither logic nor law command the current result.

Nevertheless, the United States Citizenship and Immigration Service and the Department of State lack the authority to increase the allotment of EB-5 visas. Such a reinterpretation of the law would need to come from the President or a court. Although this would be a very bold move by a President, there does seem to be enough constructive ambiguity in the law, that it could be done without the need for Congress to sanction it.  And at a time when comprehensive immigration reform has stalled and the EB-5 category nears retrogression, this simple solution would provide enormous benefits for immigrants and the U.S. economy.



Vaughan de Kirby
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San Francisco California EB-5 Investment Immigration Attorney
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