In the last article, you mentioned that there were some serious risks to the EB-5 investor visa. Do you have examples? 

Some developers and lawyers lure potential applicants into investing in projects that have yet to be approved as regional centers with promises that government approval is just months away. Be cautious about promises. Potential applicants should research the project, the developer and the lawyers carefully. Some EB-5 projects try to lure investors by giving them some sort of guarantee on their investment. This is not permitted because it means the investment is not “at-risk” as required by the law. Or, developers may try to take advantage of investors desperate for the green card and who are willing to lose their investment and more in order to obtain permanent residency. In such cases, developers charge outrageous “management” fees for managing the projects, knowing that the applicant won’t complain for fear of jeopardizing his visa application. Some developers may also try to use the invested funds while the initial visa application is still pending. If the application is denied, those funds might be lost forever. The investment should be placed into an escrow account until the application is approved.

What do you suggest a potential EB-5 applicant do to avoid being taken advantage of?

Research, research, research and more research; look into the backgrounds of everyone concerned with the EB-5 regional center project. Ask a lot of questions and demand information up front. If not satisfied with the responses, look elsewhere. Beware of promises. Very few things in life are guaranteed, so be cautious when a lawyer promises you a green card or when a developer promises a certain return on an investment. Read all documents carefully. If English is a struggle, then don’t be ashamed to hire an interpreter to help. A lot of money is involved – spending a few hundred dollars on an interpreter could be the best investment of all. After reading the complicated documents, there should be lots of questions. Don’t be afraid to ask them – you’ll regret it later if you don’t.

Do you have any other advice to minimize the risks? 

Demand to visit the project. Sometimes, a person can get a lot of information from inspecting and examining the project. Consider the location of the project, the business plan, and the surrounding area. Does the project seem like a good idea in light of all of the circumstances? Remember, there has to be a showing that you investment created 10 US jobs. If the project is a failure within 2 years of your application, this will be a huge problem. If you are discouraged from visiting the project, this should be a warning sign. Be wary of the fees charged for legal services and/or services related to the management of the project. If the fees seem very high or unreasonable, demand an explanation in writing. The bottom line: use common sense and trust instinct. If there is an uneasy feeling or there seem to be more questions than answers, walk away! There are and will be other legitimate EB-5 projects.

 

—Disclaimer—
This article is made available by Lee & Lee, PS for educational purposes only. The intent is to give the reader general information and a general understanding of the law. The article does not provide specific legal advice. Readers of this article should understand that there is no attorney client relationship between you and the writers. Furthermore, the article is not a substitute for competent legal advice from a licensed professional attorney in your jurisdiction.

I heard that there are educational requirements in order to apply for the EB-5?

This is incorrect. So long as you meet the minimum EB-5 requirements, it doesn’t matter if you are a high school dropout or a highly respected Ph.d.

What about English language requirements?

There is no requirement that the EB-5 applicant must speak English. However, the application forms and the required interview(s) will be in English, so an interpreter may be needed to assist with the process. The cost of the interpreter must be borne by the investor applicant.

Are there any other requirements?

The investor and his/her family must prove that everyone is in good health and do not suffer from any diseases that could harm the public. There are also requirements that hopeful immigrants must have been vaccinated against certain diseases prior to the filing of their petitions/applications. EB-5 hopefuls must also have no criminal convictions. While not all criminal convictions will result in automatic denial, any criminal past will pose significant problems. The remaining long list of things that may make someone ineligible for a visa probably won’t be applicable to most applicants/petitioners as they include such things as involvement in terrorist activities, smuggling, prostitution, human trafficking and participation in radical movements.

Can people apply for an EB-5 visa from any country?

Citizens of any country may apply for a visa so long as the US maintains diplomatic relations with that country. An applicant must also be able to leave his country legally and make the required investment.

What are the most typical reasons for an EB-5 visa to be denied?

Most visa denials are the result of an applicant’s inability to adequately document the sources of the investment funds. Gifted money can be used, but the applicant must still prove that such funds were obtained legally by both the donor and the applicant. Sometimes, it can be difficult to obtain reliable documentation that traces the source of the funds, especially in countries where the banking system is neither reliable nor sophisticated. Another common reason for visa denial is the inability to prove that the investment resulted in the creation of 10 US jobs. Some EB-5 regional center projects are less reliable and diligent with their records keeping and accounting, making it almost impossible for applicants to demonstrate the required job creation. A good and responsible EB-5 regional center project should have this detailed information documented by experts and available for the applicant to submit with his/her application.

So, is the EB-5 investor visa a good idea?

In general, yes. If the applicant has the minimum required funds and can adequately demonstrate the legality of the money, this is a good option for seeking entry and permanent residence in the US. However, there are also many pitfalls. With the rise of EB-5 applications, there has been an equal rise of dishonest developers and lawyers (in both the US and abroad) who are trying to take advantage of the system and the applicants. The required investment is so large that many people see this as an opportunity to take advantage of those desperately seeking to obtain a green card.

 

—Disclaimer—

This article is made available by Lee & Lee, PS for educational purposes only. The intent is to give the reader general information and a general understanding of the law. The article does not provide specific legal advice. Readers of this article should understand that there is no attorney client relationship between you and the writers. Furthermore, the article is not a substitute for competent legal advice from a licensed professional attorney in your jurisdiction.

I have been reading a lot lately about the EB-5 Investor Visa. What is this? 

The EB-5 Visa program was created in 1990 by the US Congress to give foreign nationals a means to seek permanent residency by investing in the US economy. The program has an annual quota of 10,000 visas per year for foreign nationals and their family members. Of those, 5,000 visas are specifically reserved for investments made in regional centers.

What is the difference between a general investment and an investment in a regional center? 

Generally, a $1,000,000 investment is required to apply for an EB-5 visa. But, if an investment is directed into a government-designated Regional Center then the required investment amount is only $500,000. A Regional Center is defined as a target employment area – one which faces a higher than normal unemployment rate or an economically depressed area. There are strict requirements for developers to get a project approved as an EB-5 Regional Center.

Who is eligible to apply for an EB-5 visa? 

Anyone who has the required funds and documented proof that the funds were earned or obtained legally is eligible. When applying for the EB-5 Visa I-526 petition, the investor must be able to provide detailed records demonstrating the financial transactions through which he/she acquired the funds as well as how he/she managed, moved and sustained the required funds during the entire period of ownership by the investor. The investor should also expect to provide at least five years of individual tax returns with proof of payment of all taxes due to all countries that assert tax obligations on the investor.

What is an example of illegally obtained or earned funds? 

Income from any illegal activity (drugs, smuggling, theft etc.) is the most obvious example. Funds earned or obtained in the US while the investor was on unlawful immigration status are also deemed to be unlawfully acquired.

I heard that the funds must be “at risk.” What does this mean? 

This means that there can be no guarantees on an EB-5 investment. The funds must be used by the business enterprise to create employment. Funds used to pay administrative costs or other obligations undertaken to promote the investment (advertising) are not considered to be “at-risk.” Any commitment by the enterprise to the investor that is deemed to transform the relationship from an investment to a debt arrangement (for example, a promise to pay a fixed rate of return or to repay some or all of the investment on a date certain, or to repay some or all of the investment regardless of the financial performance of the project) will not be considered “at-risk.”

You mentioned job creation as another requirement. Please explain. 

Each EB-5 investor must create at least 10 direct or indirect full time US jobs as a result of their investment. If the investment is made outside of a regional center, there must be evidence that the 10 jobs were created directly from the investment.

 

—Disclaimer—

This article is made available by Lee & Lee, PS for educational purposes only. The intent is to give the reader general information and a general understanding of the law. The article does not provide specific legal advice. Readers of this article should understand that there is no attorney client relationship between you and the writers. Furthermore, the article is not a substitute for competent legal advice from a licensed professional attorney in your jurisdiction.

According to the Regional Center Business Journal, EB-5 is stronger than ever. Since 2008, the program has surged in popularity. In an article written by IIUSA Policy Analyst Lee Li, he describes how six data points demonstrate how successful EB-5 has become.

  • Foreign Direct Investment: In fiscal year (FY) 2015, the EB-5 program generated about $4.4 billion ($4,378,000,000) in foreign direct investment (FDI), or about $12 million every day. To put that in perspective, that is more money than the GDP of Barbados. Since FY 2008, FDI has gone from $3.2 million to $4.4 billion in FY 2015. That is a growth rate of over 1,260%.
  • I-526 Stats: The number of I-526 petitions filed increased by 31% from FY 2014 to FY 2015 to a historic high of 14,373 petitions. However, it increased by over a 1000% since FY 2008 when the number of petitions that year was fewer than 2,000. In addition, USCIS has completed more than 9,800 petitions in FY 2015. That is a 54% increase since the year before. This isn’t to say that the I-526 process is without problems; the high volume has caused a massive backlog of petitions waiting to be processed. USCIS will need to reform the I-526 to better streamline the increased number of applicants.
  • I-829 Stats: The approval rate of I-829 petitions in FY 2015 was 99%. That is the best rate the EB-5 program has ever had, and well above the FY 2008-2015 average of 92%.
  • Reaching the 10,000 Visa Cap: For the second year in a row the EB-5 visas have hit the 10,000-cap limit. For comparison, the government issued only 291 EB-5 visas in FY 2000 and fewer than 2,000 in FY 2010.
  • Processing Times: Due to the high volume of petitions, processing times for I-526’s, I-829’s, and I-924’s have unfortunately increased. For example, I-829 petitions used to take about 9 months to be process. Now they take over 15 months. I-526 petitions take 14 months and I-924 petitions take nearly 12 months. Although this is not welcoming news to applicants of these petitions, it is indicative of the success that the EB-5 program is having.
  • The Rise of Regional Centers: In FY 2008 there were only 28 regional centers in the United States. By FY 2015 that number increased to 740.

With investment equaling that of a small nation, the EB-5 program has proven its worth. It is without question that the government reform the process in order to speed up the processing times. USCIS has recently said that they will be hiring more staff to help achieve that goal. In broader view, however, Congress ought to expand the visa cap in order to allow more immigrants and more investment into this country.

For more details on these data points see the article at:

https://iisusa.org/blog/research-analysis/9721/

For more data immigration overall, please go to:

www.uscis.gov/tools/reports-studies/immigration-forms-data

If you have questions about the EB-5 process, then give us a call. If you are considering an EB-5 visa it is highly recommended that you speak to an immigration attorney. An EB-5 immigration attorney will increase the likelihood of you receiving a visa.

Lee & Lee P.S. has helped hundreds of foreign investors navigate the complex EB-5 process successfully.  Let us help you, too!

 

—Disclaimer—
This article is made available by Lee & Lee, PS for educational purposes only. The intent is to give the reader general information and a general understanding of the law. The article does not provide specific legal advice. Readers of this article should understand that there is no attorney client relationship between you and the writers. Furthermore, the article is not a substitute for competent legal advice from a licensed professional attorney in your jurisdiction.

liberty

The EB-5 Program is attracting more foreign investors than ever before

It should come as no surprise that Chinese nationals make up the vast majority of EB-5 visa recipients. After all, China has the largest population in the world with over 1.3 billion citizens. In fiscal year 2014, Chinese immigrants received 9,128 out of the 10,692 visas issued. Rounding out the Top 5 were South Korea (225), Mexico (129), Taiwan (126) and Vietnam (121). Russia was the only other nation to receive more than 100 visas.

But someone appears to have spilled the beans. More nations are starting to increase their participation in the EB-5 program. Chinese immigrants received a thousand fewer visas in fiscal year 2015 (8,156). Meanwhile, Vietnam (280), Taiwan (139), and India (111) saw significant increases in visas. The non-Chinese share of visas increased to 16.5% in 2015 from 14.6% in 2014. Visas issued to citizens of Vietnam have more than doubled (a 131% increase), and Taiwan is steadily increasing their share as well.

India, however, appears to be making the greatest surge. In 2011, USCIS only issued 37 EB-5 visas to Indians. But that number jumped to 96 in 2014, and 130 visas in the first 70 days of 2016 alone! That is a 50% jump each year for the last five years. With the second largest population in world after China, it should come as no surprise that India is rising. It will be fascinating to see how this will affect the EB-5 program in the years to come.

Please contact Lee & Lee P.S. to learn more about the EB-5 Visa Program. We would be more than happy to assist you with the entire process and provide information on EB-5 projects and regional centers. Contact us today!

For more data on employment and other immigrant visas issued by USCIS, please check out the links below:

https://travel.state.gov/content/visas/en/law-and-policy/statistics/annual-reports/report-of-the-visa-office-2015.html

https://www.uscis.gov/tools/reports-studies/reports-and-studies

 

—Disclaimer—
This article is made available by Lee & Lee, PS for educational purposes only. The intent is to give the reader general information and a general understanding of the law. The article does not provide specific legal advice. Readers of this article should understand that there is no attorney client relationship between you and the writers. Furthermore, the article is not a substitute for competent legal advice from a licensed professional attorney in your jurisdiction.