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The bill, known as the U.S. Citizenship Act of 2021, provides undocumented individuals with an eight-year path to U.S. Citizenship. Undocumented individuals physically present in the United States on or before January 1, 2021, would be eligible for Temporary Protected Status (TPS). After five years, if they pass criminal and national security background checks and pay their taxes, they may apply for their green cards. Three years after receiving their green cards, and after passing additional background checks and demonstrating adequate knowledge of English and U.S. civics, they would be eligible for U.S. citizenship.

Undocumented farmworkers who worked in agriculture for at least 100 days in the last five years will be able to immediately apply for green cards. After three years in green card statusy, they would be able to apply for U.S. citizenship.

This bill, if passed, would grant an estimated 11 million undocumented individuals and 1 million farmworkers a streamlined path to green card status and U.S. citizenship.

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On January 7, 2021, U.S. Citizenship and Immigration Services (USCIS) published a final rule on the H-1B selection process for new petitions filed in 2021. This new process prioritizes petitions with higher wage levels for selection. Petitions that offer “Level IV” wages will be given the highest priority, and then to wage Level III, Level II, and Level I, in descending order. A randomized selection would be applied to petitions offering the lowest wage level to fill any remaining visa numbers.  

The final rule will be effective March 9, 2021, which would make it applicable for FY 2021 H-1B lottery. The rule is expected to be challenged in federal court on the basis that the new selection process is in conflict with congressional mandate. The final rule may also be delayed or eliminated by the Biden administration prior to its effective date.  

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On December 16, 2020, the Ninth Circuit Court of Appeals issued a decision on Innova Solutions, Inc. v. Baran, holding that the languages used by the Bureau of Labor Statistics’ Occupational Outlook Handbook (OOH) for the computer programmer occupation meets the H-1B “specialty occupation” definition. The OOH publishes information on many occupations and their requirement for entry. USCIS regularly relies on the OOH to evaluate whether a particular position qualifies as a “specialty occupation.”  

The regulatory language states that a “specialty occupation” is one that a bachelor’s degree is “normally” required for entry. Despite the OOH stating that “most” computer programmers have a bachelor’s degree, USCIS relied on this language to deny a visa for a computer programmer finding that it was not a “specialty occupation.” The court rejected USCIS’ logic stating that there is no difference between the words “normally,” “most,” and “typically.” 

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A federal court recently struck down Interim Final Rules promulgated by the U.S. Department of Homeland Security and the U.S. Department of Labor (DOL).

In October 2020, DHS and the DOL issued final rules that would materially change the H-1B program. The DHS’s “Strengthening the H-1B Nonimmigrant Visa Classification Program” Interim Final Rule revised the definition of specialty occupation, employer-employee relationships, and limited the length of H-1B approvals to only one year for work performed at third-party worksites. The “Strengthening Wage Protections for the Temporary and Permanent Employment of Certain Aliens in the United States” Interim Final Rule by the DOL significantly increased the wages U.S. employers must pay to H-1B workers. On December 1, 2020, the U.S. District Court for the Northern District of California overturned these rules for violating the Administrative Procedures Act (APA), which required a public notice and comment period before the rules can be finalized.

On November 2, 2020, the DHS also published a proposed rule that seeks to replace the current H-1B selection process with a system that gives preferential treatment to higher-paying positions. The proposed rule is expected to face similar challenges under the APA.

The Biden administration does not oppose the wage-based H-1B selection process.

According to Biden’s policies outlined on his website, the administration believes that an “immigration system that crowds out high-skilled workers in favor of only entry level wages and skills threaten American innovation and competitiveness.” The administration will “work with congress to first reform temporary visas to establish a wage-based allocation process and establish enforcement mechanisms to ensure they are aligned with the labor market and not used to undermine wages.” Biden’s emphasis on collaboration with congress suggests the administration will seek to make these changes through the legislative process. This will be challenging should the government remain divided. While acknowledging the possibility for a shift towards a wage-based allocation process, the Biden administration also expressed its support to increase the total number of H-1B visas available annually.

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President-elect Joe Biden will be nominating Alejandro Mayorkas to lead the Department of Homeland Security (DHS), the agency that oversees the U.S. Citizenship and Immigration Services (USCIS). Under the Obama administration, Mayorkas served as the head of USCIS and the deputy secretary of DHS. If confirmed by Senate, Mayorkas would be the first Latino and the first immigrant to serve in this position.  

Mayorkas was born in Havana, Cuba, fled the country with his family as political refugees. He is known for developing and implementing the Deferred Action for Childhood Arrivals program (DACA) under the Obama administration. The DACA program allows certain immigrants who entered the United States illegally as minors to remain in the country and receive employment authorization. The Trump administration terminated the DACA program in 2017, but the termination was subsequently overturned by the U.S. Supreme Court.

In 2015, Mayorkas was investigated by the Inspector General for his influence on the agency’s administration of the EB-5 investor visa program. The EB-5 program provided green cards to foreign investors who invest $500,000 in high unemployment or rural areas while creating at least 10 jobs for U.S. workers. Investor capital are often pooled to provide stakeholders of large-scale development projects an alternative source of financing.

According to an Inspector General report, Mayorkas may have personally intervened in the adjudication process of EB-5 petitions at the behest of certain stakeholders. One such stakeholder was Tony Rodham, the brother of the then secretary of state, Hillary Clinton. Rodham directed Gulf Coast Funds Management which provided EB-5 financing to GreenTech Automotive Inc., an electric car maker co-founded by former Virginia Governor Terry McAuliffe.

Despite the controversy, Mayorka’s nomination remains a welcomed change among immigration advocates. Biden’s nomination of someone with extensive immigration expertise highlights the administration’s focus on immigration reform. Nevertheless, with the likely scenario of a divided government, the passing of any comprehensive immigration reform will prove challenging for the new administration.

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For individuals who are nationals of both a treaty and non-treaty country, the nationality claimed at the time of entry will determine whether change to E-2 status is possible. For example, if a person entered the United Status as a national of Mainland China with a B1/B2 visa, that person cannot then request a change of status to E-2 based on him or her also being a national of Grenada.

“It is hereby found that, in the case of a dual national alien nonimmigrant, the nationality claimed or established by him at the time of his entry into the United States must be regarded . . . as his sole operative nationality for the duration of his temporary stay in the U.S.”

Matter of Ognibene, 18 I&N Dec. 425 (Reg’l Comm’r 1983).

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Day Care Facility

A developer in the United States wish to build and operate a day care facility in Edgewater, New Jersey. The project has a total cost of $7.5 million, which shall be applied towards land acquisition and construction. Once completed, the day-care facility aims to employ 40 full-time workers. On that basis, the project would be able to support a total of four EB-5 investors.

The developer conducts an analysis of the location of the project and finds that it qualifies as a Target Employment Area. This means the EB-5 investors can now invest based on the minimum $900,000. The total amount raised from the EB-5 investors is $3,600,000. Therefore, the developer can finance up to $3,600,000 of the $7.5 million with EB-5 capital.

The individual investors evaluate the project business plan, financials, and terms of the offering. Upon their satisfaction, they execute the project’s subscription and operating agreements, and transfer the investment amount to an escrow account set up for the investment. The investor prepares the I-526 with the attorney and submits the filing. Within 2 weeks, the USCIS issues a receipt notice acknowledging that the I-526 petition has been received. The notice is provided to the escrow agent, and the funds are released to the EB-5 project.

The I-526 is approved after a period of 18 months adjudication by USCIS. With the approval notice, the investor submits for consular processing for the family. Upon completing the consular process, the investor and the family enters the United States as conditional permanent residents.

After two years of obtaining conditional permanent residence, the investor submits the I-829 to remove the conditions. The I-829 properly documents that the project was completed according to plan and a total of 45 full-time U.S. workers were hired and are still employed. Based on that finding, the investor obtains final permanent residence. The project, due to having operated successfully, can now return the investor’s initial investment of $900,000 from its cash reserve along with any accumulated gains attributable to the investor.

The Multi-Family Development

A national development company wish to construct a mixed-use residential high-rise and retail in downtown, New York City. The total project cost is estimated at $100 million; of which, $75 million constitutes hard construction expenditures. Since this is a pure real estate development, there is little to no direct jobs after the completion of the construction. In order to secure EB-5 financing, the developer obtains a sponsorship by a local Regional Center. With the help of the Regional Center, the project can estimate an Indirect Job count through an econometric model. Based on the hard construction costs, and the period of construction, the econometric model indicates at least 750 jobs would be created in the region as a result of the new project. Furthermore, it is determined that the project is located in a Target Employment Area (as designated by the State of New York). As a result, the developer can raise up to 75 investors with $900,000 per investment.

Similar to the example above, the investor (having reviewed the project documents) invests the $900,000 into an escrow account of the project. Those funds are distributed to the project upon receiving a notice from USCIS that the I-526 has been filed. Upon approval of the I-526, the investor undergoes consular processing or adjustment of status to obtain the conditional Green Card.

Two years after obtaining the conditional Green Card, the investor applies for the I-829. At this point, instead of showing individual jobs were created and sustained the investor just needs to show that project was successfully constructed in accordance to plan and budget. Based on that finding, the investor would be able to obtain an approval of the I-829 and obtain the final Green Card. At that point, the investor would be eligible to receive a return of the initial $900,000 investment in addition to any accumulated gains attributable to the investor.

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To qualify for the EB-5 Green Card, the foreign national must invest a minimum of $900,000 or $1,800,000 USD in a for-profit business. There is no restriction on the type of business so long as it can generate at least 10 full-time jobs for U.S. workers. By meeting these qualifications, Green Cards can be obtained for the investor, his or her spouse, and any unmarried children under the age of 21.

There are two important variations that determine the minimum investment amount and the process of job creation. Whether the minimum investment is $900,000 or $1,800,000 depends on the business or project’s location. If it is located in a designated area called a “Target Employment Area” (“TEA”) then the lower investment amount of $900,000 can qualify. If it is not, then the minimum investment must be $1,800,000. Under the current regulatory standards, it is important to verify the TEA eligibility prior to making the investment.

There are also two variations for calculating job creation. The first is known as the “Direct Job”. This means counting individual human workers who work at least 35 hours per week. If the EB-5 investment relies only on Direct Job-creation, then each investor must generate and maintain at least 10 jobs for individual U.S. workers. In order to improve the EB-5 capacity for project finance, Congress implement a “test” program involve the establishment of “Regional Centers”. These Regional Centers are designated by the U.S. government to oversee qualified EB-5 projects and pool investments from foreign investors.

The investments pooled by Regional Centers are not required to rely on Direct Job-creation. This means each investor does not have to establish the hiring of 10 individual U.S. workers. Instead, they can meet the job creation requirement through “Indirect Jobs”. These jobs are determined through econometric modeling based on certain inputs involving expenditures of the project or business. In other words, it is an estimate of the economic impact of a project on a region.

A well-managed Regional Center can be beneficial to both the investor and the project owner. From the investor’s perspective, the Regional Center acts as a business or investment manager. They are responsible for the day-to-day decision making and ensuring that the project satisfies requirement for EB-5. This allows the investor to take on a more passive role similar to that of a limited partner. For the project owner, they can raise more funds through a regional center because they are no longer restricted to only Direct-Job creation.

The concepts within this section will be further illustrated in subsequent sections. For now, the key points to keep in mind are:

  • Minimum Investment Amount: $900,000 or $1,800,000 depending on whether the investment is made in a Target Employment Area (or TEA).
  • Job Creation: The Investment must create at least 10 full-time jobs for U.S. workers. The jobs can be created through direct employment of individual workers or through an economic formula that estimated indirect impact of a project or business on a region’s economy.
  • Indirect Job Creation: Regional Centers investments can utilize Indirect Job Creation which can help greatly reduce the work required of investors and can significantly increase the amount that can be raised for projects.

EB-5 Application Process

There are three key steps to the EB-5 petition process. The first, is the Petition “I-526”, which is known as the Immigrant Petition for Alien Entrepreneur. This petition documents that the project qualifies for EB-5 and that the investor’s funds are derived from a lawful source. In other words, it needs to show that the EB-5 project or business can generate at least 10 full-time jobs for U.S. workers, and it also needs provide evidence of how the investor earned the $900,000 or $1,800,000 used for the investment.

Once the I-526 is approved, the investor and immediate family members can apply for the Green Card. If the investor and family are in the United States, this process can be done through an adjustment of status. If they are overseas, this would be processed through a designated U.S. consulate. The family members that can be included are the spouse and any unmarried children under the age of 21.

Often, investors wish to obtain Green Cards for their children and not necessarily for themselves. In these cases, it is important to consider the age of the children at the time the I-526 is filed. This is because the processing time for the I-526 can take some time and the age of the children need to be under 21 at the time the I-526 is approved. Therefore, if a child is near age 21 at the time the I-526 is being filed and the parents have no immediate need or desire to come to the United States, then it may be more prudent to make the child the primary applicant on the petition.

After the investor (and or family) completes adjustment of status or consular processing, he or she would obtain a conditional permanent residence status (or “Conditional Green Card”). The Conditional Green Card is same as a normal Green Card with the exception of one requirement: the investor must maintain the investment and job creation for a period of two years. Near the end of that two-year period, the investor needs to do an additional filing to remove the condition and obtain the final Green Card.

The final filing to remove the conditions is known as the I-829 (or the “Petition by Entrepreneur to Remove Conditions on Permanent Resident Status”). The primary component of this petition involves documenting that the required jobs were created by the investor. For a Direct Job-creation project, the investor must show that the employment of at least 10 U.S. workers has been sustained. For projects relying on Indirect Job-creation, the investor would need to show that the project has been completed in accordance with the estimated expenditures. (In other words, the project spent the money in the region like it said it would.) With the approval of the I-829, the investor (and or family) would become permanent residents (Green Card holders) in the United States. Furthermore, the investment can be returned by the project to the investor.

It is important to note the that the complete timeframe of the EB-5 will differ depending on the processing time of the USCIS and the country of birth of the investor.

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On March 31, 2020, U.S. Citizenship and Immigration Services (USCIS) changed its processing of I-526 petitions from a first in first out (FIFO) approach to one based on visa availability. Under the FIFO approach, EB-5 petitions were reviewed in the order that it was received. The new approach based on visa availability will queue EB-5 petitions in the order that a visa becomes available. This means that investors from countries without a visa-backlog will have their EB-5 petitions reviewed more quickly.

According to USCIS, the purpose of this change is to provide investors from traditionally underrepresented countries better access to the EB-5 program. Under the old approach, an investor from China (a country with a visa backlog) with a priority date of March 1, 2020, will not be able to receive a visa even if the EB-5 petition is approved because the visa priority date is not yet current. Whereas an investor from Uruguay (a country without a visa backlog) with the same priority date would be able to receive a visa immediately upon approval of the EB-5 petition. Under the new visa availability approach, the Uruguayan investor’s petition would be reviewed first and the Chinese investor’s petition would be reviewed when the priority is close to being current.

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F-1 students are not prohibited from investing in or having ownership interest in a business. However, students in F-1 status cannot be actively involved in the management of the business unless otherwise authorized to do so. This is because managing one’s own business is also regarded as employment, which would require authorization.

An option for F-1 students to operate their own business is to do so during their Post-Completion Optional Practical Training (OPT). The student would need to show he or she will be working full-time and that the work performed for the business is related to the student’s degree program. The issue, however, is that the OPT period can only last up to 12 months.

The options to continue self-employment beyond the OPT period becomes more complicated. While a 24-month OPT extension is available for STEM degree recipients, self-employment will be much more difficult. While not expressly prohibited, the employment under STEM OPT requires a bona fide employer-employee relationship. This relationship is often difficult to prove if the student has ownership interest in the employer. H-1B sponsorship through a business owned by the F-1 student is difficult for the same reason.

The bona-fide employer-employee relationship requires an independent authority to exert control over the employment. This means that the right to hire, fire, supervise, and control the work is with the company and not with the student-owner. To document this relationship, evidence relating to the terms of the employment, organizational structure, and corporate governance will need to be provided. U.S. Citizenship and Immigration Services (USCIS) has the discretionary authority to determine whether this relationship exists, and any evidence provided will be closely scrutinized.

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