Hong Kong — up till now, a thriving EB-5 market with very reasonable EB-5 processing times — will be subject to the same treatment and wait times as China. While the executive order (EO) has up to 15 days to go into effect, Trump may reconsider it based on China’s actions regarding Hong Kong’s autonomy. Immigration lawyer Robert Gaffney says, “there will almost certainly be legal pushback.” And he notes the next administration could rescind or amend the order.
The last few years for Hong Kong as an EB-5 market have been positive indeed with the region being a top-10 market for the Green Card by investment program. Hong Kong, despite essentially being a city rather than a country, had thriving I-526 filing rates since FY2015 and enjoyed a far greater approval rate than global averages. As a region with a robust economy and many high net individuals — a third of whom may be interested in leaving Hong Kong — it was a market full of opportunity and optimism. But that was until now.
On July 14, 2020, Trump signed an executive order to end Hong Kong’s separate status and treatment from mainland China. The executive order positions the move as a response to China’s “series of actions that have increasingly denied autonomy and freedoms that China promised to the people of Hong Kong.” The order speaks to the fact that the people of Hong Kong people may now face life in prison for protests, that the right to a trial may be suspended, and that it will be harder for journalists and human rights organizations to hold China accountable for its treatment of the Hong Kong people.
The executive order’s impact on EB-5
Speaking of EB-5, Trump’s executive order would prolong Hong Kong’s green card wait times and make Hong Kong EB-5 investors subject to the onerous wait times suffered by Chinese investors — sometimes well over a decade. Hong Kong had a separate annual EB-5 visa total until now, but going forward it would be subject to mainland China’s country cap.
The number of EB-5 visa applications from mainland China has been consistently exceeding the 10,000 annual cap, which has resulted in a long queue of applicants. Since the executive order for Hong Kong normalization, the “EB-5 China” queue is expected to get longer, with the addition of Hong Kong-born investors to this category, as they will no longer enjoy preferential treatment. For EB-5 Hong Kong applicants, it means that their visa availability, as of August 2020, will be pushed backward from the priority date of August 2015.
What can be done about the executive order?
Veteran immigration lawyer Robert Gaffney comments on the longer immigration wait times for Hong Kong: “There will almost certainly be legal pushback against the Trump Administration on this aspect of the EO.”
Trump himself allows for an “out” of the executive order based on his judgement that China’s actions result in Hong Kong being “sufficiently autonomous.” This expectation of Chinese concessions, however, is wrongheaded, according to Chinese policy experts, who feel that China will not be swayed by U.S. pressure.
Beyond any immediate legal measures to stop the executive order, or the unlikely scenario of Chinese concessions, there is hope in the form of a new administration. Gaffney believes there’s a good chance a “more informed U.S. president will reconsider the EO in light of the text and spirit of the Joint Declaration and amend or rescind the EO to better support the people of Hong Kong.”
If the executive order is implemented you can bet that more than a few of Hong Kong’s 7.5 million people will be glued to the U.S. election this November 3.
Effect of US Election Results on EB-5 China Backlogs and Hong Kong Investors
The Trump administration has regularly instituted convention-defying policies, be it in the domestic or international sphere. With regards to China, Trump has been largely known to take a confrontational stand, whether it was rebuking it for the treatment of Hong Kong by ending preferential treatment for Hong Kong or the economic sanctions for its human rights violations against Muslim minorities in the Xinjiang region.
While it is generally believed that if Biden comes to power, the executive order for the normalization of Hong Kong may be rescinded, one can’t say for sure. The uncertainty stems from the expectation that Biden too may likely take a hard or even harder stand against China for its alleged rights violations. However, since his approach differs in that it may be less confrontational, he may consider revoking the executive order impacting EB-5 China backlogs and the fate of Hong Kong investors. Either way, one must simply wait and watch.
See the executive order