North AmericaPolicy Updates

Hong Kong’s EB-5 Applicants to Join Mainlanders in Retrogression Following Executive Order

When President Trump on Tuesday signed the Executive Order on Hong Kong Normalization, which he is authorized to do by the Hong Kong Policy Act of 1992, he effectively eliminated Hong Kong’s treatment as a separate country from China for purposes of, among other things, immigration. The President has also ordered agencies whose policies will be affected by the change in status to update their regulations to reflect the same within 15 days.

The move has stark implications for prospective investor migrants (indeed, any class of migrant) from Hong Kong hoping to immigrate to the United States. In the absence of new legislation that directly addresses Hongkongers, litigation preventing the executive order from taking effect, or a reversal from the President, Hongkongers will henceforth be considered merely “Chinese”.

For the EB-5 program, it means Hongkongers will be subject to the same quota as mainlanders.

Just yesterday, IIUSA reported that EB-5 applications from Hong Kong have been surging over the last year. The contents of the executive order is now jeopardizing that trend.

The operative sentence in the executive order is found in section 2:

Pursuant to section 202 of the United States-Hong Kong Policy Act of 1992 (22 U.S.C. 5722), I hereby suspend the application of section 201(a) of the United States-Hong Kong Policy Act of 1992, as amended (22 U.S.C. 5721(a)), to the following statutes:

(a)  section 103 of the Immigration Act of 1990 (8 U.S.C. 1152 note);

Section 103 of the Immigration Act of 1990, to which Trump expressly refers, reads as follows:

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SEC. 103. TREATMENT OF HONG KONG UNDER PER COUNTRY LEVELS. 8 USC 1152 note. The approval referred to in the first sentence of section 202(b) of the Immigration and Nationality Act shall be considered to have been granted, effective beginning with fiscal year 1991, with respect to Hong Kong as a separate foreign state, and not as a colony or other component or dependent area of another foreign state, except that the total number of immigrant visas made available to natives of Hong Kong under subsections (a) and (b) of section 203 of such Act in each of fiscal years 1991, 1992, and 1993 may not exceed 10,000.

Section 2 of the Hong Kong Policy Act of 1992, meanwhile, contains the following operative language:

(a) IN GENERAL- Notwithstanding any change in the exercise of sovereignty over Hong Kong, the laws of the United States shall continue to apply with respect to Hong Kong, on and after July 1, 1997, in the same manner as the laws of the United States were applied with respect to Hong Kong before such date unless otherwise expressly provided by law or by Executive order under section 202.

“Hong Kong-born EB-5 applicants should get in touch with their attorneys”
Matthew Galati, principal of Galati Law, which specializes in US immigration, explains the implications of the executive order for EB-5 candidates from Hong Kong:

Matthew Galati

“If fully implemented by the Department of State, individuals born in Hong Kong would now be chargeable to Mainland China,” he laments. “This presents a major problem in EB-5 as PRC-born investors are oversubscribed and most investors will endure a long wait. Individuals born in Hong Kong thought that they would be treated as a separate country and would be unlikely to face any kind of quota issues. Perhaps those filing recently may have thought that they could immigrate in two to three years, following petition and visa processing. They did not anticipate the supply of visas being affected by those to be issued to PRC-born investors. But if they are no longer so treated as being separate from the PRC, then hopes of immigrating to the U.S. relatively quickly will have been dashed.”

Galati points out that even though, as things currently stand, Hongkongers will be treated as mainlanders, hopes remain that such a state of affairs may yet be mitigated.

“This is of course a major shift in policy and, as we saw yesterday with the Administration’s reversal on requiring foreign students attending schools in-person, is subject to amendment and change,” he writes in an email to IMI. “Perhaps Congress may act or litigation may undo this. Perhaps a new Administration will take power in January and restore what was assumed as a given for nearly 30 years. However, for now, Hong Kong-born EB-5 investors who have not yet received an immigrant visa should probably be getting in touch with their attorneys to discuss the fallout of this executive order.”

Christian Henrik Nesheim AdministratorKeymaster

Christian Henrik Nesheim is the founder and editor of Investment Migration Insider, the #1 magazine – online or offline – for residency and citizenship by investment. He is an internationally recognized expert, speaker, documentary producer, and writer on the subject of investment migration, whose work is cited in the Economist, Bloomberg, Fortune, Forbes, Newsweek, and Business Insider. Norwegian by birth, Christian has spent the last 16 years in the United States, China, Spain, and Portugal.

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