Vietnam is about to retrogress in EB-5. This is going to cause a disruption in the market. However, know this: It may, for the next few months, look as bad as that for applicants born in the People's Republic of China ("China"), industry hysteria may seem as bad as China, but know that the wait times are virtually certain to NOT BE AS BAD AS CHINA.

In June 2017, the USCIS Ombudsman sent shockwaves through the industry by projecting that the wait time for Chinese EB-5 families to receive a Green Card is 10 years or longer. Chinese demand for EB-5 visas thus plummeted, and has not come anywhere close to recovering since. There are ways to mitigate the pain of retrogression, however.

With Vietnam now approaching its statutory limit on visas per year, some investors are nervous as to how severely retrogression will affect them.

Visa allocation might be the most complicated topics in immigration law, so allow us to explain the current situation and what to expect, as best we can. In the April 2018 Visa Bulletin, the Department of State said the following:

DELAY IN OVERSUBSCRIPTION OF THE VIETNAM EMPLOYMENT FIFTH PREFERENCE CATEGORY

Continued heavy applicant demand had been expected to result in the Vietnam Employment Fifth preference (EB-5) category reaching the per-country annual limit during March. However, the return of unused February EB-5 numbers during the past few days has been much higher than had been expected. This appears to be a direct result of the continuing resolution signed on December 22, 2017 extending the immigrant investor pilot program until January 19, 2018, and the subsequent extension until February 9, 2018.  Uncertainty over category extension greatly delayed the scheduling of February appointments, which would normally have occurred in early January.  As a result, many applicants did not have sufficient advance notice to enable them to appear for their February interview, which could have been expected to result in the use of visa numbers.  

The oversubscription of this category will definitely occur for May.

Oversubscription occurs because no more than 7% of any one country may capture any preference visa category's allocation. When a category is oversubscribed, priority dates retrogress. In the EB-5 context, a priority date is allocated based on the date an I-526 is receipted by the Texas lockbox. Pundits often refer to waiting for a priority date to become current as waiting "in line for a Green Card."

We cannot state this enough: Determining overall wait times is extremely complicated and there is likely no one on the planet who knows for sure how long a given wait time will be. Compounding the simple mathematics of a given year's allocation is that any unused visa numbers in a given category may be put towards backlogged countries or chargeability. Put another way, at present, the total number of EB-5 visa available (approximately 10,000) is larger than the entire world plus Mainland China's 7% allocation. Therefore, any "extra" visas may be allocated to Chinese applicants in the backlog. But how many visas are available in future years? The numbers of denials, withdrawals, divorces, and even deaths remain a wildcard as to visa availability.

What does this mean for the Vietnamese investor? While China is the only country backlogged at present, for the rest of the fiscal year (May-September 2018), the "extra" visas described above must be allocated on a first-come, first-serve basis. The May Visa Bulletin accordingly will pin Chinese and Vietnamese Current priority dates as the same, and this will continue until at least October, when new Vietnamese-only visa allocations are available. Put another way, Vietnamese and Chinese-born visa applicants will be in the same first-in, first out "line" until October. In October, the lines will be separated. The "Vietnamese Line" will almost certainly be shorter, as discussed below.

Another thing to consider is the effect on visa allocations for the next five months. China's April Visa Final Action Priority Date is July 22, 2014. Form I-526 processing times are generally not that long and thus virtually all Vietnamese families that filed their petitions before that date already have CPR status. Therefore, because this is a first-in, first-out allocation system, this accordingly means that virtually no EB-5 visas will be available to Vietnamese applicants until October 1, 2018.

A new allocation of EB-5 visas for Vietnam will become available at the beginning of the new Fiscal Year, or October 1, 2018. This will separate the "lines" for Vietnamese and Chinese chargeable applicants. The big question, accordingly, is what will be the Vietnamese backlog as of this October. It is impossible to say at this point. Thus, families with elder children may be wise to file two petitions instead of one to protect against ageouts. The Child Status Protection Act will protect long I-526 processing times but not the time after approval when one awaits a priority date to become current.

Nevertheless, we know that because Vietnam is allocated 7% of all EB-5 visas, and because Chinese Applicants were over 80% of EB-5 visas last year  we know that barring some massive, unforeseen surge in visa numbers, simple mathematics dictates that the Vietnamese backlog cannot be as bad as China's. In fact, in FY2017, Vietnam supplied only 471 (approximately 5%) of all EB-5 visas. It's unthinkable that numbers surged to reach China levels in such a short period of time.

 With I-526 processing times approaching two years, the question remains as to how long Vietnamese EB-5 applicants will need to wait for their visas after approval. It could be several years. Because priority dates are based on date of filing, and I-526 processing times are increasing, it could also be zero. However, it is a near-certainty that it will be less than the wait for those born in Mainland China, simply because there are many fewer Vietnamese-born applicants in the backlog.

Take this to heart when you see the May 2018 Visa Bulletin.

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