On August 23, 2014, the State Department announced that the employment based fifth-preference category (EB-5) is unavailable for Chinese nationals for the remainder of FY2014, through September 30, 2014, due to the large number of visa applications which are being processed from Chinese nationals. Assuming this trend continues, Chinese investors are expected to face a processing backlog (known as "retrogression") at some point in FY2015 which may lengthen the processing time of Chinese EB-5 applications and could consequently impact investors of all nationalities.

Congress imposed an annual quota of approximately 10,000 EB-5 visas for investors and their family members, as well as a per-country limit of 7% of all available worldwide EB-5 visas. To date, these quotas have never been met. However, the number of Chinese applications has increased precipitously over the past several years, and now account for over 80% of the world's EB-5 applications. This increase in Chinese EB-5 applications is projected to lead to a retrogression of EB-5 visas available to Chinese nationals during fiscal year 2015.

Quota retrogression—with projected delays of two years, at a minimum—poses difficulties to investors who must continuously meet the EB-5 requirements throughout the entire period of the application process. The EB-5 application process has two phases: an initial approval phase based on an investment into a new commercial enterprise, and then the later removal of conditions based on whether the investment meets the minimum requirements of the visa category. Moreover, an investor must sustain the investment throughout the period of the applicant's conditional residence in the US, which is required to be twenty-four months before the application can be approved to remove the conditions to permanent residency. Protracted filing dates may to lead logistical issues for investors, as well as raise potential age-out issues for dependent children. Retrogression will also have an impact on regional centers and developers alike in the structuring of EB-5 transactions.

Non-Chinese EB-5 investors may also be impacted by quota retrogression, especially financiers of construction or real estate projects. Many EB-5 regional centers, for example, structure their loans to the developers with a five-year term, often with a right to extend on the part of the developer. However, if the removal of conditions will take additional years to process, investors may need to restructure the timing of the loan, so that the developer will be required to maintain the loan for a greater period of time to accommodate the longer time periods required for a Chinese investor to be qualified to apply for permanent residency in the United States. Any resulting changed circumstances may decrease the predictability of the EB-5 process.