Tuesday, January 27, 2015

Working with Chinese EB-5 Visa Investors:

Working with Chinese EB-5 Visa Investors:

Since I began my work in the EB-5 Visa industry, I have mainly worked with Eastern European and Latin American investors.  Recently, I had the opportunity to assist and investor from mainland China.  This proved to be a real learning experience. 

Thankfully the Regional Center that we worked with has a full staff of professionals who speak fluent Mandarin, so the language barrier was not an issue.  That was a bright spot in this case.  The source of funds for the investment came from the sale or real estate in Hong Kong.  The sale took place rather recently, so we did not encounter any issues in regard to purchase and sale contracts and or funds switching hands. 

The fun started when we had to show the origin of the source of funds which were used to purchase the recently sold property.  Not surprisingly, the property was purchased as a result of the sale of a previous property.  The transition took place in 2009.  Further, the Regional Center requested that we show how property # 2 was acquired.  Drum roll: It was yet the sale of another property in 2004. 
One thing about real estate transactions in mainland China from the early to mid-2000s is that there are very few documents to support them.  Cash was and mainly is still king in that part of the world.  

Also, if a bank was used to facilitate the transaction, there is a large chance that the bank is no longer operating and all documentation is gone and no longer available to evidence the transaction. 
Luckily for this case, the investor did keep good records and was able to present the sale and purchase contracts or all three transactions.  These documents were not easy to come by, but in the end were presented to USCIS for review.  In China the sales contract is also the evidence of tax payment on a property, which in this case satisfied another requirement for USCIS. 

Next came the transfer of funds.  By law in China, only $50k USD may be transferred out of the country in a single year.  Thus, an EB-5 investor must split up the $500k USD between friends and family who then make the transfers individually to the investors Regional Center of choice.  I was amazed by the level or resistance from the Chinese banking authorities when it came to this part of the process.  It took several weeks and multiple attempts from various friends and family members of the investor to complete the numerous wire transfers. 

In the end, the biggest thing I learned about working with Chinese investors is to be ready to expect the unexpected and be prepared to quickly find solutions. I look forward to the next challenge! 


Monday, January 26, 2015

What’s Next For EB-5 Visa?

What’s Next For EB-5 Visa?
It is no surprise that the EB-5 Visa industry has been seeing some major changes in the past year.  Increased processing times, and restrictions on the number of Chinese investors are just some of the few hot topics in the space today.  But what does the future hold for EB-5? 

With the sunset of the EB-5 program quickly approaching at in the 4th quarter of 2015, potential investors should take notice of a few looming changes.  If the visa is extended for another three years or is made permanent by Congress, it is likely that we will see an increase in the investment amount.  There are rumors that the investment will go up to anywhere from $800,000 USD to $1M USD.  However, those who invest prior to the change in policy, will enjoy the limited $500,000. 

It is no surprise that the U.S. may make it more expensive to immigrate to the land of opportunity.  After all, the equities markets prove to be the strongest, there are no bombs falling from the sky, and the employment rate keeps climbing.  Another thing to consider is that, when compared to some of the other developed countries who offer investment immigration programs, the U.S. seems to be the cheapest. 

Another development to be aware of is the number of applicants who are flocking to the EB-5 Visa program.  Rumor has it that the visa will be oversubscribed by middle of the year.  Believe this or not, the closure of the Canadian program and now the closure of the Hong Kong program are driving large numbers of investors towards EB-5. The Chinese dominate the industry and will more than likely be affected by the lack of visas available.

Some leaders in the industry are also on a crusade to bring the EB-5 Visa back to its intended roots. With the mega projects hoarding the majority of the slots, it is becoming difficult for small business owners and innovators to take advantage of the competitive EB-5 marketplace.  Perhaps we may see some proposed changes in the allocation of the visas to smaller and more innovative operators?

With all the changes coming, one thing is for sure: The industry is changing rapidly but still growing at a tremendous pace. 

If you would like to know more, please visit my website http://eb5investgreencard.com/