EB-5 Regional Center Economic Development Program Hits Historic High
More capital investment available for job-creating projects than ever before
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CHICAGO, February 1, 2012 – The Association to Invest In the USA (IIUSA), the trade association for the EB-5 Regional Center Investment Pilot Program, today celebrates a new historic high in Program utilization for the first quarter of FY2012. US Citizenship and Immigration Services recently reported 2,364 EB-5 visas issued in the first three months of the current federal fiscal year. This equates to at least 10,000 new jobs for American workers. At this pace, the 2012 Program will come close to using its 10,000 annual visa allocation for the first time since the Program’s inception in 1994. 10,000 EB-5 Visas would mean at least 40,000 new jobs for US workers.
At a time of limited liquidity around the United States, the EB-5 Regional Center Investment Pilot Program is finally coming of age. Globally integrated marketplaces now facilitate the exchange and migration of capital, resources and people across international borders at an ever-increasing rate. As a result, the Program is able to account for more foreign direct investment now available for American job creating enterprises than ever before.
“These recent numbers confirm the trends that our industry has been seeing for the last couple of years.” said K. David Andersson, President, IIUSA, “We are a functioning example of 21st century economic development policy that works. Thanks to the Regional Center Investor Pilot Program, thousands of Americans are employed today, and at no cost to the American taxpayer. This Program needs to be a permanent part of the American economic development toolbox.”
Despite its record setting statistics and growing economic impact, the EB-5 Regional Center Investment Pilot Program is due to expire in September 2012, absent action from Congress. IIUSA estimates failure to reauthorize the Program in a timely manner would squander a golden opportunity to create over 100,000 new U.S. jobs through investment losses of at least $10 Billion in foreign direct investment over the next five years. IIUSA calls on Congress to support our efforts to create new jobs by immediately passing permanent reauthorization of the EB-5 Regional Center Pilot Program.
The contributions of immigrant entrepreneurs—innovation, job creation and economic growth—are often cited by economists as strong reasons to reform our outdated immigration system. However, the kids of immigrant entrepreneurs receive relatively little attention. Delving into the experiences of these adult children of immigrants provides a new lens through which to witness the struggles and triumphs of parents and their children as they pursue the American Dream.
A new report by the Immigrant Learning Center (ILC) puts a human face on the children of immigrant entrepreneurs. Adult Children of Immigrant Entrepreneurs: Memories and Influences shares the stories of 36 children of immigrants representing a wide variety of countries of origin and family businesses. Some were born in the U.S. and others immigrated here in childhood. While their stories differ, they all have one thing in common: their immigrant entrepreneur parents and experiences growing up around the family business heavily influenced their desire to pursue an education and the American dream.
All of the young adults interviewed witnessed firsthand their parents’ struggles as they integrated into their new home in the U.S., ingraining them with a strong work ethic. They spent long hours along side their parents in their place of business. While most gained valuable experience taking on various activities, many parents shielded their kids from manual labor, encouraging them instead to interact with customers, keep the books, or other business-related tasks. Because they often had better English language skills than their immigrant parents, many of them served as de facto language brokers. Spending time working alongside their parents provided them with valuable business and social skills, giving them the confidence that allowed them to excel in school.
Pen Khek Chear, whose parents came to the US as Cambodian refugees, said:
“My dad did not want to teach me to be a jeweler [like him] because he was afraid I would like it. My parents wanted me to get an education and be a ‘respectable professional’ and not have to do ‘hard labor.”
Pen obtained a Master’s in Social Work from Boston University.
Because of their own struggles, education is very highly valued by immigrant entrepreneur parents, and the young adults interviewed had achieved high education levels. Many of the people interviewed had pursued graduate school after graduating from college. They related how their immigrant parents wanted them to excel educationally, get good, stable jobs, and live more comfortable lives than their parents had. The kids recognized that their parents had performed difficult manual labor, and had sacrificed their weekends and worked all the time so that they could pursue higher education. ILC found that “there is an inherent appreciation among the adult children of immigrant entrepreneurs for the sacrifices their parents made to ensure that they have successful careers and lead normal lives in their adopted homeland.”
Like many American families, the immigrant entrepreneurs highlighted in this study want their children to excel and have opportunities that they themselves did not have. While their children may not always get along with their parents, they recognize the tremendous sacrifices their parents have made for them. Not only did the young adults interviewed excel in school and in their careers, but they also chose careers that allow them to give back to the community. The American Dream is alive and well in these immigrant families.
Many Rich Chinese Consider Leaving
By JEREMY PAGE
BEIJING—More than half of China's millionaires are either considering emigrating or have already taken steps to do so, according to a survey that builds on similar findings earlier this year, highlighting worries among the business elite about their quality of life and financial prospects, despite the country's fast-paced growth.
The U.S. is the most popular emigration destination, according to the survey of 980 Chinese people with assets of more than 10 million yuan ($1.6 million) published on Saturday by Bank of China and wealth researcher Hurun Report.
While growth has slowed, China's economic performance is still the envy of the Western world: It registered annual gross domestic product growth of 9.1% in the third quarter, and the International Monetary Fund has forecast growth of 9.5% for all of 2011.
Concerns are mounting, however, that China's growth could be derailed by a raft of problems, including high inflation, a bubbly real-estate sector and a sharp slowdown in external demand.
Many Chinese who have profited most from the country's growth also express increasing concerns in private about social issues such as China's one-child policy, food safety, pollution, corruption, poor schooling, and a weak legal system.
Rupert Hoogewerf, the founder and publisher of Hurun Report, said the most common reason cited by respondents who were emigrating was their children's education, followed by a desire for better medical treatment, and the fear of pollution in China.
![[CFLEE110211]](http://si.wsj.net/public/resources/images/OB-QJ571_CFLEE1_D_20111102013648.jpg)
Mark Ralston/Agence France-Presse/Getty Images
A man walks past an advertising display at a luxury mall in Shanghai. Thousands of rich Shanghai residents have turned China's most cosmopolitan city into the luxury capital of a country that is expected to become the world's largest market for the sector between 2012 and 2015.
"There's also an element of insurance being taken out here," he said, citing concerns about the economic and political environment.
He cautioned, though, that it was unclear if the survey results signaled capital flight as many high-net-worth individuals who were emigrating also said they were keeping much of their money invested in China.
China maintains capital controls that make it hard for rich Chinese to move their money out of the country, but there are substantial loopholes in the system.
Some economists say they have detected signs of large capital outflows in recent months, likely driven by a decline in global risk appetite and expectations of slower yuan appreciation.
A research report from Bank of America Merrill Lynch's strategy team in Hong Kong last month cited "hot-money outflows" as one of four systemic risks that could lead to a hard landing for China's economy. It said that a sign of such outflows were record gambling revenue in the gambling enclave of Macau, a former Portuguese colony near Hong Kong, where many mainland Chinese go to gamble.
In another indication of the jittery mood among China's rich, several Western embassies have also noted a marked increase this year in the number of applications for investment visas, a category that allows people to immigrate if they invest a certain amount of money, according to diplomats.
There is evidence, too, of an uptick in the number of Chinese people buying high-end properties in major Western cities, especially London, Sydney and New York, according to property analysts.
Another survey published in April by China Merchants Bank and Bain & Co. showed that almost 60% of high-net-worth individuals in China had either arranged for, or were considering emigration. Of those, more than 20% had already completed their immigration applications, or made the decision to apply, according to that survey, which covered 2,600 high-net-worth individuals.
China Merchants Bank and Bain estimated that in 2010 there were 500,000 people in China with "individual investable" assets valued at 10 million yuan and 20,000 people with 100 million yuan or more.
Bank of China and Hurun estimated there were 960,000 people with "personal assets" of at least 10 million yuan, and 60,000 people with 100 million yuan or more.
Their survey, conducted in May to September, covered 18 major cities including Beijing, Shanghai, Wuhan, Nanjing, Dalian and Suzhou, and interviewed respondents with an average age of 42 and average personal assets of 60 million yuan.
The survey showed that 46% of respondents were considering emigrating, while an additional 14% had either already emigrated or filed immigration applications.
Mr. Hoogewerf said respondents with assets of 100 million or more were even more inclined to emigrate, with 55% considering leaving China, and 21% already living overseas or having filed applications.
The top destination among those emigrating was the U.S., accounting for 40%, followed by Canada with 37%, Singapore with 14% and Europe with 11%, the survey showed.
One-third of respondents said they had assets overseas, and an additional 28% said they planned to invest abroad in the next three years. Half of those with overseas assets listed their children's education as the reason, while 32% cited emigration.
The U.S. was the most popular destination for their investments, accounting for 42%, and property was the most popular type of investment, accounting for 51%, according to the survey.
Reprinted from the Wall Street Journal
Washington, D.C.
The USCIS today announced a teleconference with Director Alejandro Mayorkas scheduled for Wednesday, November 9 at 1 PM eastern time. To RSVP to this event, send an email to This e-mail address is being protected from spambots. You need JavaScript enabled to view it .
The Dial In # is 1-888-810-9647 Passcode: EB-5.
The announcement states that policy guidance will be uploaded for public comment at uscis.gov/outreach very soon.
Please check back regularly for updates.
October 22, 2011 - Scottsdale, AZ
Surge in Charter Schools - and Their Students
by Michelle Reese
When examining the percentage of public school students in charter schools, Arizona has led the nation for years.
This year, it may have taken a leap.
Based on estimates provided to the Arizona Department of Education by Arizona’s charter schools in September, an additional 14,000 students enrolled in their campuses over last year.
Last year’s 100-day average daily membership reported by schools was 119,253. Schools provided an estimate — conservative in most cases, said the department’s Lyle Friesen — of 135,155 around Sept. 15. Though most schools won’t hit their actual 100th day of school until January, they are required to make an estimate to receive payment from the state.
There were 508 charter schools in Arizona last year, comprising more than 23 percent of the state’s public schools. More than 11.5 percent of public school students were attending charter schools in Arizona, according to report released this month by the National Alliance for Public Charter Schools.
The robust growth will continue, said Arizona Charter School Association’s CEO and president Eileen Sigmund, as parents seek out options and additional schools open.
“Are we at our saturation point? No, we’re not,” she said, pointing to a recent enrollment event for Great Hearts Academy in Scottsdale. “They filled it in 98 seconds at 6 a.m. for the 2012-13 school year. Ninety-eight seconds.”
According to the Arizona State Board for Charter Schools, 33 new charter schools opened this year, from Tucson to Flagstaff and from Peoria to San Tan Valley.
Legacy Traditional School opened three new facilities, including its Athlos campus in Chandler. Even though the school opened a week late because of construction, 405 students are there in grades kindergarten through seven, and 60 kindergartners are already enrolled for next year.
“There are more parents who want charter schools than there are spaces available,” said Bill Gregory, director and founder of Legacy Traditional Schools.
There’s also still some confusion about what charter schools are. Some parents still think they’re attached to local school districts (a possibility, but it doesn’t happen often) or are private schools.
For the record, charter schools are public schools that receive state funds. They were created by lawmakers in 1994.
“There are those who are savvy parents and know, but there’s still, ‘This looks good, but how much is it?’ ” Gregory said, referring to questions about tuition.
Charter schools cannot charge tuition. They receive funding based on the number of students attending the school. But unlike districts, they cannot ask taxpayers for additional funds to maintain or build campuses.
Legacy Traditional School Athlos was built with the help of investors and a partnership with Velocity Sports Performance. The new multipurpose building includes an indoor synthetic turf area, alongside a large weight room and basketball court. In the evenings, when school is not in session, Velocity will use the building.
Besides the school’s focus on back-to-basics education, there is a large physical education component. The school’s physical education teachers received instruction from Velocity’s trainers.
“Here, we are offering something the public schools and other charter schools aren’t offering,” Gregory said. “There are the academics and the athletics. With the facilities we have, it’s something parents are really excited about.”
Patty Colehour enrolled her two children, a kindergartner and fourth-grader, this year at Legacy Athlos. Her oldest was already getting a back-to-basics education through a district school, but Colehour was impressed with the commitment from Legacy to provide extra help through tutoring or to move students forward once they master a level.
“It’s not the same vibe,” Colehour said of the Legacy campus. “You want to be here. You want to be a part of it.”
While there are new charter schools opening each year, there’s also a strong group of charter schools with a history of success.
Mesa Arts Academy is one of them. The school serves 230 students near downtown Mesa. Though the school doesn’t advertise, there’s a waiting list at most grades, said principal Sue Douglas.
Alongside budget cuts from the state, it’s prompted Douglas to increase class size the last few years. Most classes have around 24 students with a teacher and an aide.
The school, which received an A from the state earlier this month, often sees 100 percent of its eighth-graders pass the math portion of the AIMS test, Douglas said.
“I have people who drive in from Queen Creek, Maricopa, all over, all because of our results,” she said.
While there are success stories, Sigmund said the state charter school board takes its charge to watch school performance.
“The main authorizer, the State Board for Charter Schools, is saying, ‘If you’re not moving students ahead academically and your students aren’t proficient, then we’re going to take steps to start closing you down,’ ” Sigmund said. “The charter movement is no longer about choice, but good choice for parents and students.”
Reposted from the East Valley Tribune
The Case To Reform EB-5
by Joseph P. Whalen
After doing more in-depth research into the creation and development of the Immigrant Investor path towards a green-card, I have come to the realization that it is misclassified or at the very least the statute is inadequate to the underlying desired outcome. The Immigrant Investor visa classification is codified as the fifth preference employment-based visa at INA § 203(b)(5)[1]. Preference category visas are technically limited to specific proportions of all visas available annually and are allocated in accordance with a precise formula that takes into account the limited worldwide and per country levels as well as authorities and processes described in INA §§ 201 through 205. It is for these underlying reasons that it has been necessary to be as fair as possible in issuing visas. The first step involves the filing of a petition for classification for the desired category of visa. It has evolved that this filing date will be used as a "priority date" which secures the "beneficiary" of the petition their place in a potentially very long line for a visa. Owing to the importance of the priority date, certain expectations have come into being and as have developed over time through the agency and court interpretations of the statutes and the statutory scheme. The realm of the "preference category visa petition" is a specific context. This particular context demands that the beneficiary shall be fully qualified and statutorily eligible for the visa classification at the time of filing and must remain so through time of adjudication and ultimately at time of visa issuance and in some cases beyond that for a specified period of time and with conditions attached to retention of status.
Immigrant Investors are initially granted a conditional status and will then be required to prove that they are deserving of the lifting of conditions at a later time. The only other immigrants who are initially granted a conditional status are those who gain status based on a recent marriage[2] to either a USC or LPR who petitions for them. There is however another employment-based visa that has conditions attached to the attainment of the LPR status. The second preference employment-based national interest waiver provisions for physicians have strings attached. These physicians are not provided with conditional status, rather than that they have to fulfill conditions first and then get the full unconditional LPR status green-card. The physician may file an I-140 for the EB-2 NIW concurrently with an I-485 and get an EAD in order to legally work and fulfill the minimum commitment of service in a specified geographic area, medical specialty, facility, or for a particular qualified employer. In the alternative, a physician who has already met the minimum service will be granted LPR status faster after filing. There is always a certain amount of time required just to process and adjudicate anything. Even though e-filing will speed things up, immigration and nationality benefits will never be available like a pack of gum from a vending machine.
What do "Priority Dates" entail and encumber?
In general, one must be fully qualified for the visa classification at the time of filing. For instance, if a petition is filed for a child, then the beneficiary must meet the INA definition of a child as applicable. As an example, a step-relationship is reliant on several factors. The existing biological or adoptive parent must qualify as the parent of the child and the new spouse may be deemed a step-parent. IF the marriage is valid and legal and takes place before the child reached age 18 years and while the child was unmarried then the step-relationship has been formed. The child will only remain a child as long a petition is filed before the child reaches age 21 years. Depending on other factors a child may remain classified as a child beyond age 21 based on the CSPA (Child Status Protection Act) for visa issuance or adjustment of status purposes. Family-based visas may be either "immediate relative" or "preference visas".
In the realm of employment-based visas, they are all "preference visas". The importance of the priority date is really lost on some of the employment-based visa classifications because they are so hard to qualify for that they have never been oversubscribed and therefore always "current" for visa issuance or adjustment of status purposes. The fifth-preference "employment creation" or immigrant investor visa has always been "current" from day one of its existence. Competition has always been fierce but never robust. The coveted visa has always been a challenge to attain not from competition against a large pool of applicants but rather a struggle to meet the eligibility requirements and qualifications.
Congress has set some high bars. Some were on purpose: the minimum amount of capital must be invested and the alien must create or preserve a minimum number of full-time jobs for qualifying U.S. workers. Some high bars were inadvertent. For example, Congress took the previously created immigrant investor labor certification exemption category defined by INS via regulation and codified it among the preference visa categories. In doing so, Congress placed the "eligible at time of filing" yoke around the neck of the immigrant investor petition without clearly limiting the bare minimum eligibility that should be required in order to be so classified.
What Should The Minimum Requirements Be For EB-5 Investor Classification Approval?
First, they need to have the required investment funds. Second, IF they have not yet created the required jobs THEN they need a plan to create the required jobs. So for the vast majority, the bare minimum is enough money and a plan. Through regulation and Precedent, INS through AAO and later USCIS and the courts have shaped the requirements for an investor's "plan" to mean a comprehensive, detailed, and credible plan. The added requirements do not end there. The investor and his plan have subsequently been saddled with a prohibition against making a substantive material change. This became necessary in order to combat scam artists and fraudsters seeking to buy a green-card with lousy investment schemes and scams put forth by Regional Center promoters. The precautions have gone too far and may inappropriately block investors even (at least in theory) when they achieve the desired results of full investment and enough jobs. This point of a bare minimum as long as results are achieved needs clarification.
Bare Minimum Amount of Investment.
When INS created the immigrant investor labor certification exemption in 1966, they stated that the alien was required to invest or be actively in the process of investing a "substantial amount" of capital. Then INS set an amount. Initially it was $10,000, then it was increased to $40,000 (and there was an earlier attempt to set it at $25,000 that failed[3] ). Then the whole program faltered because the non-preference visas were so scarce that the aliens stopped trying. Then there was almost no activity, then some visas were made available for those few who had actually made real investments. Finally, through IMMACT 90, Congress set the amounts at a significantly increased level to the current amounts of either one or one-half million dollars.
Job Creation.
The other fulfillment requirement of creating or preserving ten jobs was a later addition. Initially, there was no such requirement. Then INS stated that the alien would need to work in his business and be qualified to do so. Then a requirement was proposed to require the alien to create jobs for U.S. workers but the earliest proposal was fought and defeated. The job creation element eventually came back as a regulatory requirement that the alien investor "will employ a person or persons in the United States of which he will be a principal manager and that the enterprisewill employ a person or persons in the United States who are United States citizens or aliens lawfully admitted for permanent residence, exclusive of the alien, his spouse and children."
The Investment Plan.
Rather than making an up-front showing of the two basic elements, most alien investors will submit a plan to achieve the job creation requirement and sometimes they include plans for completing the infusion of capital once first showing that they actually have it. It is the evidentiary weight assigned or ascribed to the up-front plans that needs further clarification and refinement. The current difficult economic realities involved in any investment are at the forefront of the minds of many investors and the general public at the present time but these realities have been and shall continue to be important considerations for all EB-5 investors. In all business-not merely EB-5, plans are made but are subject to change along the way. The artificial and arbitrary prohibition against substantive material change has grown beyond its limited usefulness and become onerous. The concept of material change and the prohibition against it as well as its application need further clarification and refinement.
Conflating "Eligibility At Time Of Filing" With Using An Impermissible "Material Change" In Order To Demonstrate One's "Basic Eligibility Qualifications".
Most importantly and above all else, the basic bare minimum eligibility qualifications required to secure a priority date under EB-5 needs clarification and refinement. The eligibility for securing a priority date is quite different from the fulfillment requirements that must be demonstrated for the lifting of conditions at the very end of the EB-5 process. Through the arduous path from the 1990 enactment through the scam period and reaction to that mess and finally 2011's current rethinking, some wires got crossed.
If you objectively look at EB-5, the requirements to secure a "priority date" are to:
1.) have enough clean money (lawful funds) available to invest, andAs was mentioned,most will rely on "plans" to create jobs. Through a slow evolution and in the course of combating fraud, far too much emphasis has been placed on the initial plan advanced by the alien entrepreneur at the time of filing the I-526. The concept of impermissible material change cropped up in the Regional Center affiliated I-526 context as to financial arrangements. It has spread to the job creation aspect or "business plan" in the I-829 context. In the Regional Center affiliated investor context, the "business plans" form the basis for the "economic analyses" that predict indirect job creation. So in the RC context the plans take on a greater significance. Material Changes to the RC affiliated business plans have a direct effect on the job counts and therefore may indeed undermine the investors' ability to meet the requirements for the lifting of conditions on status. Through the use of previously USCIS-vetted and approved plans, a Regional Center sponsor and/or the affiliated I-562 filer (immigrant investor) is pretty much locked-in to the approved plan in order to reasonably rely on USCIS deference to the job predictions and thereby to lift conditions. This is a precarious position and when substantive material changes happen, all bets may be off. Through the use of transparent complexity, contingency plans can be put forth up-front, thereby putting USCIS "on notice" of the potential changes or shifting from one vetted plan to another vetted plan. Although the final analysis at the I-829 stage may be slightly more complicated than desired, if the results bear out the job counts needed, then conditions can still be lifted and the question of an impermissible material change drops from the mix.
2.) have already started a business and created (or preserved) ten full-time jobs or be willing to take a stab at starting a business in which the alien will attempt to create (or preserve) ten full-time jobs, for legal U.S. workers.
The Time For Corrective Action Is At Hand.
USCIS is currently undergoing a metamorphosis as to the processing of the Alien Investor Program. Regulations and forms are being reviewed for the needed changes and are yet to be advanced for consideration through notice and comment rulemaking or Information Collections (ICs). As a small part of the government-wide retrospective review ordered by the President, ancillary matters are also under serious review simultaneously. AAO is still working on new regulations that are long overdue since the creation of USCIS as a part of DHS back on March 1, 2003. The form I-924 used in order to seek Regional Center Designation only came into use just under one year ago and is already up for revision. USCIS has already announced that further refinement to the I-526 and I-829 would take place in the near future. With so much up in the air at the same time, this is an excellent opportunity to address some fundamental underlying concepts and requirements and set the stage for successful expansion of the EB-5 Immigrant Investor Program for a long time to come. Above all other complaints from stakeholders, they want clear and consistent answers. They crave certainty. They desire reasonable reliance and have sought assurance of deference on settled points. Some shady characters seek to abuse any assurances as to deference and turn it into unreasonable reliance and would try to force USCIS to grant unworthy requests to lift conditions on the unfulfilled promises of failed businesses. Clearly, controversy can always be manufactured by anyone willing to devote some time to it. However, that is not a reason to be overly and unreasonably restrictive from the start. The inclusion of disclaimers and warnings should suffice to deflect the bogus claims of the unworthy when they come along in the future. A little additional background follows.
A Brief Synopsis of the History the Immigrant Investor Visa[4]
Congress did not create the concept of an immigrant investor classification, they merely codified it and modified it twenty-four years after the fact in the Immigration Act of 1990 (IMMACT90). Previously, in 1965, Congress made a major overhaul of the Immigration and Nationality Act. That 1965 amendment did not include an immigrant investor visa category. The 1965 amendment included an undefined category of "other qualified immigrants" among the "nonquota immigrants" newly renamed "special immigrants" in INA § 101(a)(27).
INS Created the Immigrant Investor Classification
The "investor visa" was created originally in 1966, by INS through regulation utilizing the Attorney General's broad authority under INA § 103 [8 USC § 1103] by construing and interpreting INA § 203 [8 USC § 1153] (a)(8)'s "other qualified immigrants" who could demonstrate that they did not require a labor certification from the Secretary of Labor. It was not termed as a visa classification but rather as a "labor certification exemption". It seems that everybody needed some guidance on who the phrase "other qualified immigrants" actually applied to. Who exactly were these "other qualified immigrants" that did not need a labor certification?
These visas were allocated under INA § 203 (a)(8) but issued as a "special immigrant" class found in INA § 101(a)(27) [8 USC § 1101 (a)(27)]. The Immigration and Nationality Act Amendments of 1965 (Public Law 89-236, Sec. 8 (a)) renamed nonquota immigrants as special immigrants in INA § 101(a)(27). These special immigrants were eligible for visas and investors were among these immigrants but defined in the regulation, not the statute.
The original version of 8 CFR § 212.8 stated, in pertinent part:
(b) Aliens not required to obtain labor certifications. The following members are not considered to be within the purview of section 212(a)(14) of the Act and do not require a labor certification: .......(4) an alien who will engage in a commercial or agricultural enterprise in which he had invested or is actively in the process of investing a substantial amount of capital.
[31 FR 10021, July 23, 1966; 31 FR 10355, Aug. 22, 1966, as amended at 34 FR 5326, Mar. 18, 1969][A modified version of this extraneous regulation is still in 8 CFR but has been slated for repeal as obsolete in the recent USCIS Business Transformation Rule I.]
Footnotes
For a much more extensive review of the older and current Administrative Decisions and additional court cases on the Immigrant Investor Classification from 1966 through 2011, see:http://www.slideshare.net/BigJoe5/a-survey-of-the-immigrant-investor-visa-1966-2011-june-27-2011-jw
Conditional status is given if the marriage is less than two years old at time of approval of I-485 or entry on an Immigrant Visa.
In an earlier version that was put forth in the rulemaking process, INS had wanted to make the minimum capital investment $25,000.00 and include a job creation element termed as a prospective economic benefit requirement. These additions did not make it into the final version codified.
For a much more extensive review of the history and development of the Immigrant Investor Visa see: http://www.slideshare.net/BigJoe5/a-survey-of-the-immigrant-investor-visa-1966-2011-june-27-2011-jw
Reposted from: http://www.ilw.com/articles/2011,1014-whalen.shtm
Continuing the recent flow of good news surrounding the EB-5 program, Presdient Barack Obama's Jobs Council mentions efforts to 'improve and leverage' the EB-5 immigrant investor visa program as part of his initiative to create jobs across the United States. Published by the President's Council on Jobs and Competitiveness, the report outlines ways in which the U.S. government can take action to bolster the economy and spur job creation within the United States.
The portion of the report that specifically talks about the EB5 program can be seen below:
"The Administration is working to improve and leverage the EB-5 immigrant investor visa program, another Council recommendation. DHS' Citizen and Immigration Services (USCIS) is enhancing the program by creating specialized review teams with business expertise, engaging re-engineering experts to streamline the process, launching a premium processing service and evaluating additional options for maximizing the program's potential."
The report goes on to talk about serious efforts to promote foreign direct investment in the United States and other job creating initiatives that affect both foreign and domestic policy.
A full-text PDF of the Council's report can be found here: http://files.jobs-council.com/jobscouncil/files/2011/10/JobsCouncil_InterimReport_Oct11.pdf
The private firms developing two major state-sponsored projects say they are trying to take advantage of a little-known element of immigration law that provides green cards to foreigners who invest $500,000 to $1 million in a job-creating enterprise in the United States. It's apparently the first time something like this has been tried in Maryland, and it's making some people uncomfortable, including Senate Minority Leader Nancy Jacobs of Harford County. She's contemplating legislation to make the use of investor visas illegal for state projects, saying it sounds like we're selling citizenship and "turning the country over to the Chinese."
That's nonsense. The program, which has been around since 1990 but has expanded significantly in the last few years, certainly needs close monitoring to make sure it is achieving its maximum potential in terms of creating jobs. But the idea that we should give priority in immigration to people who are already successful in their native countries and who have the capital to invest in the development of this nation is absolutely sound.
Complaining that this visa program — known as EB-5 — amounts to selling American citizenship reveals a misunderstanding of how our immigration system works. Our borders aren't like a deli counter where people take a number and wait their turn. We give preference, and always have, to people who are most likely to integrate easily into American society and to contribute the most to it. Skilled workers, people with advanced degrees or promises of employment, or those with family members already here get pushed to the front of the line. The reason the investment visa is known as "EB-5" is that there were already four other employment-based visa programs before it. The government allots 10,000 visas a year to the EB-5 program, or 7.1 percent of those allowed for all employment-based visas, though the quota has never been met.
Those who are concerned about immigrants in American society tend to raise several objections, none of which apply here. EB-5 visa recipients are not illegal immigrants; they broke no laws to get here. They are not taking away jobs that could have gone to native-born Americans. On the contrary, they are creating jobs that, by law, must go to American citizens or legal residents. They are not straining the social safety net. Instead, they are sufficiently rich to afford a six- or seven-figure investment, and they are volunteering to come here and pay federal, state and local taxes.
And finally, allowing people to participate in projects like the expansion of Seagirt Marine Terminal at the Port of Baltimore and the redevelopment of the State Center office complex doesn't amount to turning the country over to the Chinese or anyone else. The people who take advantage of this program are putting themselves and their entire families on a path to become American citizens. If the firms completing these projects sought financing through traditional means, the money could have come from investors anywhere. This way, they are selling ownership stakes in their ventures to people who will live here and who will have a tremendous incentive to make sure the developments' job creation potential is realized. Their legal status in this country depends on it.
The state also realizes real benefits from the willingness of the private development firms it has partnered with to consider the EB-5 program. Because the state has a limited ability to issue bonds to pay for projects like the Seagirt expansion or the State Center renovation, it has increasingly looked to public-private partnerships. EB-5 investors make it easier for private firms to make those projects viable. Not only has it been more difficult since the financial collapse of three years ago to secure traditional financing, but EB-5 investors often require less stringent terms, since they are also getting the benefit of a path toward U.S. citizenship out of the bargain.
There's a reasonable case to be made that we should not be quick to hand public assets over to private management. But absent a willingness to take on substantial public debt — and to raise taxes to pay for it — there is no other viable way, for example, to expand the Port of Baltimore to handle the big cargo ships that will be moving through the Panama Canal starting in 2014. The fact that some of the investors in these projects might be new legal immigrants bringing their families and their capital to this country should sweeten the deal, not be cause for alarm.
September 29, 2011 - Washington, D.C.
Report and Comments on EB-5 Meetings in Washington
by H. Ronald Klasko
I share the following comments after spending two days in Washington, DC attending the Congressional EB-5 hearing and the EB-5 Stakeholders Meeting, as well as listening to the meeting with USCIS Director Mayorkas:
Premium processingis unlikely to be implemented in the very near future. My best estimate is the first half of calendar year 2012, and maybe the first quarter. It will likely be limited to regional center designation applications and exemplar I-526 (project pre-approval) petitions. There is a possibility that individual I-526 investor petitions will be eligible for premium processing at a later date. In the meantime, regional centers and investors should file petitions in the normal fashion. If premium processing is implemented, almost certainly it will apply to pending petitions.
There appears to be agreement between Republicans and Democrats in the House of Representatives for a long term and hopefully permanent extension of the regional center pilot program. The biggest area of disagreement may be whether, as part of the extension, Congress implements a new EB-6 program for venture capital financing of startup ventures in the U.S. If so, there is some indication that at least the Republicans in the House of Representatives may want to take the visa numbers for the EB-6 program out of the EB-5 quota. EB-5 advocates will be arguing against any attempt to reduce EB-5 numbers.
USCIS has already hired three new business analysts and is in the process of hiring one or more economists. Hiring and training these individuals will be a critical part of implementing premium processing and implementing the proposed Decision Board, which would allow for in-person or telephonic discussions between regional centers and CIS prior to decisions on regional center designations and project pre-approvals.
Even without premium processing, regional center designation applications and project pre-approval applications will likely be processed more promptly than the present 8 to 10 months. Now that USCIS has mostly completed the November 2010 filings, and since there were far fewer filings in the months following November 2010, processing times should improve. It is not as clear that processing times will improve on the investors’ I-526 petitions.
USCIS will not commit to a formal position on three legal issues “for several weeks” and likely will include most or all of the positions in a new policy memorandum. The three issues are:
- Deference to safe designation letters with respect to geographical areas of TEAs;
- EB-5 money used to pay down bridge financing;
- Definition of “material change” for purposes of condition removal and what must be done in the event of a material change.
- It appears likely that CIS will agree that it should defer to state designation of geographical areas of TEAs and that EB-5 money can be used to pay down bridge financing. Until issuance of a policy memorandum, there are indications that CIS adjudications on these issues have been more favorable since we had our meeting with Director Mayorkas on August 10. The material change issue will likely be the subject of a separate USCIS stakeholders engagement meeting prior to issuance of any memorandum.
Following our August 10 meeting, it appears that USCIS is rethinking its policy on exemplar. Hopefully, the policy memorandum will include a commitment that, if the documentation regarding the regional center and the project in the investor’s I-526 petition is identical with the exemplar 526, CIS will be bound by the approval of the exemplar. Unless and until that happens, there does not appear to be any good reason for waiting the necessary time for approval of the exemplar 526 if it will be filed independently of a regional center designation application. If it will be filed concurrently with a regional center designation application, since the processing time will be the same as the regional center designation processing time, it may be sensible to continue filing the exemplar 526 for the first project.
Link to Original Article: http://blog.klaskolaw.com/2011/09/29/report-and-comments-on-eb-5-meetings-in-washington/
Director of the USCIS Alejandro Mayorkas met with the U.S. Chamber of Commerce on Wednesday to discuss reforming America's high skilled immigration system, competitiveness, and jobs. During the course of his presentation, Director Mayorkas pointed to changes in the EB-5 program which are expected to provide additional support for adjudicators and make the EB-5 process more efficient in the coming months. He also mentions a "targeted request for proposal to re-engineer our business process from beginning to end".
The comments, coupled with the fact that EB-5 is now being discussed by the U.S. Chamber of Commerce, provides a glimmer of hope that the policy changes advocated by Director Mayorkas will help to increase efficieny and reduce adjudication timelines for a variety of EB-5 related applications.
The full text of the Director's comments can be seen here:
"We have made significant changes in the way we adjudicate cases in the immigrant investor or EB-5 program, a program that is designed to create American jobs. We have retained business analysts to support our adjudicators, and received more than 75 applications for additional economists. We will be hiring corporate expertise, issuing new policy guidance in the next few weeks. And currently we have outstanding a targeted request for proposal to re-engineer our business process from beginning to end. The EB-5s full allotment of 10,000 investor visas has never been reached. In 2008, just over 1,200 were issued and the potential remains great. This year, we will more than triple that number."
Full text of Director Mayorkas' presentation to the U.S. Chamber of Commerce can be found here, as well:
http://www6.lexisnexis.com/publisher/EndUser?Action=UserDisplayFullDocument&orgId=574&topicId=25151&docId=l:1510562947&isRss=true&Em=4
September 22, 2011 - Amedabad
Rattled with economic woes since 2008, the USA has dusted off a 1990 visa programme offering a short-cut to the once coveted Green Card (permanent residency) within six months if a foreigner invests a minimum of $ 500,000 to settle down there along with family.
The investment, under this Immigration Investors’ Programme, is expected to provide one per cent interest in three to four years, subject to market conditions. The investment would have to be made through authorized legal channels.
The US Congress had passed the Immigration and Nationality Act in 1990 which created the fifth employment-based visa category (EB-5), enabling a foreign national to secure a US Green Card for self, spouse and unmarried children under the age of 21 years.
Faced with difficult times, the Barack Obama Administration dusted off EB-5 programme in 2008. “Even we came to know about it only three years ago,” Mr Greg Wing, Managing Partner, Green Card Fund, LLC (also known as Arizona EB-5 Regional Center), now in India seeking investors, investments and immigrants,told Business Line on Thursday.
A wholly-owned subsidiary of Bedford Venture Group, LLC, monitors the investors’ immigration throughout the process of getting their Green Card.
Interestingly, although the immigration quota under EB-5 permits up to 10,000 investors per annum, there have been few takers so far. In 2010, only 1,885 investors availed of it, investing a total of $1.1 billion. They included China (866 investors), South Korea (295) and Great Britain (135). Only 62 Indians availed of the facility, investing $40,000,000. “This year, we expect 70% more Indians availing of EB-5.”
Unlike tightening of norms for other categories of visas, the USA is leaving no stone unturned to encourage more Indians and others to follow the EB-5 visa route. “We are holding seminars and meets across China, India and other countries in this regard. In the first six months of 2011, the number of Chinese applying for it has already crossed the 1,200 mark.”
To facilitate its work, Green Card Fund has roped in the Bangalore-based Fox Mandal Consultants and Advisors. Another US-based immigration consulting firm, Kenn Morris America, is also offering its services to Indian investors. The US Citizenship and Immigration Services (USCIS) ensure processing of applications within 15 calendar days for an additional fee under the premium processing of Green Cards.
Link to Original Article: http://www.thehindubusinessline.com/industry-and-economy/economy/article2476603.ece
September 22, 2011 - Ahmedabad
Facing unemployment of over 9 per cent, the US is trying to woo high networth individuals (HNIs) from India through its employment-based immigrant visa EB-5.
"Due to lack of awareness, the participation in EB-5 investor programme from HNIs in India is low. In first six months this year, only 40 Indian investors have availed the programme as compared to 62 in 2010," Green Card Fund (GCF) Managing Partner Greg Wing said here today.
"Around 10,000 EB-5 visas are available every year, but so far not more than 4,200 have been availed in any given year by investors in the US from across the globe," he said.
GCF is a federally-approved United States Citizenship and Immigration Services (USCIS) regional centre for EB-5 programme. It has joined hands with Fox Mandal (FMAS), an Indian consultancy and advisory firm, to create awareness about the investor programme for job creation in US.
As part of its promotional drive in India, GCF, jointly with FMAS, will be organising seminars to educate HNIs in cities like Ahmedabad, Surat, Hyderabad and Chennai.
The EB-5 programme enables a foreign national secure green card (permanent residence) for himself as well as for his family (children up to 21 yrs) by making an investment of USD 5,00,000 into American commercial business that creates at least 10 jobs for US citizens, Ashok Kumar Joshi of FMAS said.
FMAS is the facilitator of this programme in India.
"The investment of half a million dollars in American commercial business shall be refundable to the investor over next three to four years' period with some minimal interest," said Wing, referring to advantages of the programme.
"GCF offers projects in sectors like education, health care, clean energy and healthcare facilities," Wing said.
China topped with 866 investors under the programme in 2010, followed by South Korea (295), Great Britain (135) and India (62). The programme helped US attract investment of USD 1,104,500,000 in 2010.
Link to Original Article: http://articles.economictimes.indiatimes.com/2011-09-22/news/30189346_1_eb-5-programme-indian-investors
Lyndsey Layton - Washington Post
President Obama is poised to broaden federal influence in local schools by scrapping key elements of No Child Left Behind, the Bush administration’s signature education law, and substituting his own brand of school reform.
The move will bypass Congress, drawing fire from Republicans on Capitol Hill and some in the educational establishment but winning applause from governors across the country struggling to meet the demands of the nine-year-old law.
On Friday, Obama and Education Secretary Arne Duncan are scheduled to detail plans to waive some of the law’s toughest requirements, including that schools ensure that every student be proficient in math and reading by 2014 or risk escalating sanctions.
In exchange for relief, the administration will require a quid pro quo: States must adopt changes that could include the expansion of charter schools, linking teacher evaluation to student performance and upgrading academic standards. As many as 45 states are expected to seek waivers.
For many students, the most tangible impact could be what won’t happen. They won’t see half their teachers fired, their principal removed or school shut down because some students failed to test at grade level — all potential consequences under the law.
“It’s a momentous development,” said Jack Jennings, president of the nonpartisan Center on Education Policy. The White House is essentially rewriting the law, he said.
Duncan said the administration has no other choice, driven by mounting pressures on schools caused by the law and no clear sign that Congress will fix its flaws. Lawmakers have been trying for four years.
“I feel compelled to do this,” Duncan said as he rode a bus two weeks ago to tour schools in Michigan, Wisconsin, Pennsylvania and Ohio, among other states. “My absolute preference is for Congress to fix it for the entire country. But there’s a level of dysfunction in Congress that’s paralyzing. And we’re getting to the point that this law is holding back innovation, holding back progress. We need to unleash that. We need to get out of the way.”
For Duncan, one of the most visible members of Obama’s Cabinet, the move is likely to cement his reputation as arguably the most powerful education secretary in the department’s history.
Duncan already has propelled school systems across the country to make far-reaching changes by awarding a record $8 billion, provided by the economic stimulus package, to states and districts that embraced Obama’s agenda.
Even states that didn’t win money through the best-known of those programs, called Race to the Top, changed policies and laws to compete for the funds.
Duncan “walked into office and was handed a big pot of money and very few congressional restrictions,” Jennings said. “Congress went off and got into health reform, the budget, all these other issues that sucked up their attention. He was left alone with his money and took advantage of the opportunity. Now he’s got another opportunity.”
Some say the administration is reaching too far.
“This is all top-down stuff,” said Rep. John Kline (R-Minn.), chairman of the Committee on Education and the Workforce. His own state is likely to seek a waiver. Duncan, he said, is “using the simple power to grant waivers and expanding it to say, ‘I will grant you waivers in exchange for changing public school policies to something that I would like.’ And there’s a growing sense that he really doesn’t have the authority to do this.”
No Child Left Behind allows the education secretary to waive “any statutory or regulatory requirement” of the law. It says nothing about the authority to set conditions for those waivers.
Sen. Marco Rubio (R-Fla.) has accused the White House of violating the constitutional separation of powers. And Sen. Lamar Alexander (R-Tenn.), a former education secretary, filed a bill to restrict Duncan’s ability to issue waivers.
“He’s acting as the superintendent for the country,” said Daniel A. Domenech, executive director of the American Association of School Administrators, which wants Duncan to issue waivers to every state without strings attached.
While the conditions for waivers won’t be spelled out until Friday, Duncan has said he wants states to adopt academic standards that will prepare high school graduates for jobs and college; measure teacher performance in part by how much students grow during the year; and make “robust” use of data to track learning, among other things. Historically, the federal government has left such decisions to states and local communities.
“It’s a very clever way to manage a political crisis that is not of his or the president’s making,” said Chris Cerf, acting schools commissioner under New Jersey Gov. Chris Christie (R). His state intends to apply for a waiver.
A number of states are already in sync with the administration’s goals.
“I support the idea of waivers, because we think the way to assess a school is not solely through testing and proficiency,” said Wisconsin Gov. Scott Walker (R), who met with Duncan at a Milwaukee school two weeks ago. “Overall, the reforms [Duncan] is looking at are really similar to what I’m looking at. What he’s saying makes sense. We would be moving toward these changes even if the waivers came without conditions.”
In the Washington area, Virginia intends to seek a waiver, while officials in Maryland and the District want to see the conditions first.
When Congress passed No Child Left Behind in 2001, it marked a bipartisan effort to hold schools accountable to parents and taxpayers and a federal commitment to attack student achievement gaps.
For the first time, the law required schools to test all children in grades 3 through 8 and once in high school and report results by subgroups — including race, English learners and students with disabilities — so it was clear how every student was faring.
The law required states to set goals for improvement and make steady progress toward them, including the expectation that all students tested show proficiency in math and reading by 2014. Advocates of the law say it provides plenty of leeway for schools to meet annual goals.
Still, No Child Left Behind places a premium on test results. If a student enters fourth grade reading at a first-grade level and improves during the year to read at a third-grade level, her score counts as failure under the law because she is not reading at a fourth-grade level. “Instead of getting rewarded for helping that child leap two grade levels, the school gets punished,” Duncan said.
Schools that fall short year after year can face significant penalties, such as requirements to provide free tutoring, replace staff or even shut down to reopen as a charter school. Duncan has warned that more than 80 percent of schools could be labeled as failing next year, although some experts question that figure.
Many educators say the pressure of trying to reach full proficiency has created an unhealthy focus on standardized tests, with continual drilling in the classroom and a narrowing of curriculum to focus on math and reading.
“Teachers see courses in arts disappearing, courses in civic education, science, history — all those things have been diminished,” said Dennis Van Roekel, president of the National Education Association, the nation’s largest teachers’ union.
The law’s weaknesses have undermined education reform, Duncan said. Because No Child Left Behind allows states to create their own standards and measures of proficiency, nearly one-third “dummied down” standards to inflate test scores, according to a 2009 Education Department study.
Tennessee, for example, was posting scores that showed 91 percent of its students were proficient in math. After it recently raised standards, that figure fell to 34 percent, Duncan said.
On Capitol Hill, talks between Republicans and Democrats on rewriting the law have floundered. It appears unlikely Congress will pass comprehensive reform any time soon.
Kline plans five bills to revise the law. One, promoting expansion of quality charter schools, passed last week with bipartisan support in the House.
Sen. Tom Harkin (D-Iowa), chairman of the Committee on Health, Education, Labor and Pensions, said that he expects to file a bill by October but that progress has been bogged down by “leadership on the Republican side that doesn’t want to give anything to Obama to sign.”
Rep. George Miller (Calif.), the ranking Democrat on Kline’s committee, said: “When you look at the congressional timetable, the presidential timetable and the political divisions that now exist, it’s getting very late to navigate that minefield.”
Reprinted from the Washington Post.
September 13, 2011 - Beijing
Top of Chinese wealthy's wish list? To leave China
By LOUISE WATT
Associated Press
BEIJING (AP) -- Chinese millionaire Su builds skyscrapers in Beijing and is one of the people powering China's economy on its path to becoming the world's biggest.
He sits at the top of a country - economy booming, influence spreading, military swelling - widely expected to dominate the 21st century.
Yet the property developer shares something surprising with many newly rich in China: he's looking forward to the day he can leave.
Su's reasons: He wants to protect his assets, he has to watch what he says in China and wants a second child, something against the law for many Chinese.
The millionaire spoke to The Associated Press on condition that only his surname was used because of fears of government reprisals that could damage his business.
China's richest are increasingly investing abroad to get a foreign passport, to make international business and travel easier but also to give them a way out of China.
The United States is the most popular destination for Chinese emigrants, with rich Chinese praising its education and healthcare systems. Last year, nearly 68,000 Chinese-born people became legal permanent residents of the U.S., seven percent of the total and second only to those born in Mexico. Canada and Australia are also popular.
It is a bothersome trend for China's communist leaders who've pinned the legitimacy of one-party rule on delivering rapid economic growth and a rising standard of living. They've succeeded in lifting tens of millions of ordinary Chinese out of poverty while also creating a new class of super rich. Yet affluence alone seems a poor bargain to those with the means to live elsewhere.
Despite more economic freedom, the communist government has kept its tight grip on many other aspects of daily life. China's leaders punish, sometimes harshly, public dissent and any perceived challenges to their power, and censor what can be read online and in print. Authoritarian rule, meanwhile, has proved ineffective in addressing long standing problems of pollution, contaminated food and a creaking health care system.
"In China, nothing belongs to you. Like buying a house. You buy it but it will belong to the country 70 years later," said Su, lamenting the government's land leasing system.
"But abroad, if you buy a house, it belongs to you forever," he said. "Both businessmen and government officials are like this. They worry about the security of their assets."
Leo Liu, marketing manager at Beijing emigration consultants Goldlink, said the company has noticed an increasing trend of rich Chinese wanting to emigrate, particularly to Canada, in the 15 years since it was founded.
The main reasons people want to move abroad, he said, are their children's education and for better healthcare. Some want to leave because they got their money illegally, such as corrupt government officials and businesspeople, while others are inspired by friends who have already emigrated to the U.S.
"They want to get a green card even though they may still do business here in China," Liu said. "They might have sent their wife and children abroad.
"And some of them just love life in a foreign country, the Western style," he said.
There is also a yawning gap between rich and poor in China, which feeds a resentment that makes some of the wealthy uncomfortable. The country's uneven jump to capitalism over the last three decades has created dozens of billionaires, but China barely ranks in the top 100 on a World Bank list of countries by income per person.
Getting a foreign passport is like "taking out an insurance policy," said Rupert Hoogewerf, who compiles the Hurun Rich List, China's version of the Forbes list.
"If there is political unrest or suddenly things change in China - because it's a big country, something could go wrong - they already have a passport to go overseas. It's an additional safety net."
Among the 20,000 Chinese with at least 100 million yuan ($15 million) in individual investment assets, 27 percent have already emigrated and 47 percent are considering it, according to a report by China Merchants Bank and U.S. consultants Bain & Co. published in April.
Nearly 60 percent of the people surveyed said worries over their children's education are a reason for wanting to leave.
A millionaire who works in the coal industry, who also spoke on condition of anonymity, said the main push behind his plans to emigrate is China's test-centric school system, often criticized for producing students who can pass exams but who lack skills for the world of work.
He will take his 7-year-old to the U.S. as soon as the child graduates from junior high at an international school in Beijing where pupils are instructed in English.
"The U.S. has a good educational system and excellent health care," said the 39-year-old, who has three homes in China and assets worth $5 million. "That's why we look forward to going there."
Other top motivations cited in the Merchants Bank study are to protect assets and to prepare for retirement. Also cited as reasons for leaving: having more children and making it easier to develop an overseas business.
Alongside increased emigration there has also been a massive outflow of private money from China despite its strict currency controls. The report estimates that rich Chinese - those with assets of more than 10 million yuan - have about 3.6 trillion yuan ($564 billion) invested overseas.
"The Chinese economy now looks like a massive funnel," said Zhong Dajun, director of the non-governmental Dajun Center for Economic Observation & Studies in Beijing.
Zhong said it is mostly corrupt government officials who transfer entire fortunes overseas because they have been illegally acquired and "they have fears and feel guilty."
Wealthy Russians have also been establishing footholds abroad for the past decade, seeking a safe haven both for their money and their children. In recent years, the trend has extended to Russia's emerging middle class. They cannot afford to invest in London, a favorite destination for Russia's billionaires and millionaires, so have been setting up second homes in less expensive European countries, including those like the Czech Republic that were once part of the Soviet bloc.
Su, the property developer, intends to stay in China and continue building residential high-rises and office buildings for another 10 years because he fears it would be too difficult for him to replicate his mainland business success abroad.
His wife is already in the U.S., expecting their second child. Under China's one-child policy in place for the last three decades to control population growth, couples can be penalized for having more than one child. In Beijing, the penalty is a one-off fee 3-10 times the city's average income, a maximum of 250,000 yuan ($40,000).
"The living conditions abroad are better, like residential conditions, food safety and education," said the millionaire as he dined in the VIP room of a Beijing restaurant. Lowering his voice, he said for many rich there are worries about the authoritarian government. "This is a very sensitive topic. Everyone knows this. It's freer and more just abroad," he said.
David Joyce marched his way to the front of the U.S. immigration line using his pocketbook, sinking half a million dollars into a Vermont ski resort.
The British citizen had spent years in a futile effort to secure green cards for himself, his wife and their 9-year-old son so they could relocate to sunny Florida. Then, a fellow emigre tipped him off to a little-known federal program that helps foreigners gain permanent U.S. residency by investing in American businesses.
"In six months, we had our green cards," said Joyce, 51. "Considering everything we've been through, this was easy."
Joyce is one of thousands of foreigners speeding through the U.S. immigration labyrinth — for a price.
Those who invest $500,000 in a U.S. enterprise that creates at least 10 jobs in a rural area or a community with a high unemployment rate are eligible for special visas that put them and their families on the fast track to becoming permanent residents.
For some wealthy immigrants lacking the family ties or special skills required for traditional U.S. visas, it's the fastest way to establish permanent residency apart from marrying a U.S. citizen. Investors aren't required to work in the business or participate in its management; some never even see the enterprises they buy into.
The federal program, known as EB-5, is relatively small, capped at 10,000 visas annually. But applications have skyrocketed since 2006 as entrepreneurs and cash-strapped towns have begun aggressively wooing wealthy foreigners as a low-cost source of capital.
In San Bernardino, the city is tapping EB-5 funds to redevelop its downtown theater district. In Jupiter, Fla., overseas money is fueling the construction of an outdoor amphitheater, marina slips and entertainment hub. In Philadelphia, it was used to expand a hospital complex and improve a school for disabled children.
Once the federal government gives preliminary approval to a project and conducts background checks, the would-be immigrant can invest in the deal and apply for the visa.
But the government's initial approval doesn't always lead to desired results.
Some immigrants have faced deportation when their investments failed to create enough jobs or otherwise didn't comply with program rules. Others have secured their green cards but lost their entire investments when projects foundered.
Yet the prospect of U.S. residency has proved so enticing that some are willing to take the chance. Once approved for the program, the investor can apply for a conditional green card, good for two years. If the investment creates 10 jobs during that time, he or she can apply to live in the U.S. permanently.
Applications from mainland China have soared in recent years, fueled by well-off parents eager to get their children into U.S. schools.
"They can afford to do this," said Zhang Runan, an immigration attorney in Washington.
Proponents laud the program as a way to boost struggling local economies while rewarding immigrant risk-takers.
In the hamlet of Jay, Vt., where Englishman Joyce was part of a $215-million investment pool, EB-5 money has helped finance luxury condos and a new ice hockey arena. Up next: an indoor water park, a golf complex and a hotel aimed at attracting more visitors to the ski town hit hard by the recession.
"We tried going to banks, but the lending environment was impossible," said Bill Stenger, chief executive of the Jay Peak Resort. "There is no way we could have done this without EB-5."
But some critics contend this is little more than a cash-for-visa program, one that is more beneficial to project promoters than the depressed communities it's supposed to help. A cottage industry of middlemen has emerged to introduce investors hungry for permanent U.S. residency to American developers and communities eager for money.
A flurry of EB-5-related websites has popped up with pitches written in Chinese, Korean, Spanish and Arabic. Promoters regularly offer seminars in hotel ballrooms in China, as well as in the U.S., proffering deals and collecting hefty fees.
(Source: The Los Angeles Times)
According to a recent story in Mexico City’s daily newspaper “Reforma”, The Texas cities of Mission and El Paso are experiencing a population and business boom, as many Mexicans flee violence in the border states of Nuevo Leon, Tamaulipas, and Chihuahua.
The newspaper reports that many of the newcomers arrive with investor visas, which the United States provides to persons who bring job-creating investments with them.
An increasing number of Mexicans are focusing on the EB-5 regional center immigrant investor visa, which, for a $500,000 investment in a regional center program that has been approved by the United States Citizenship and Immigration service (USCIS), allows permanent residency anywhere in the USA for the applicant, their spouse and their unmarried children under 21.
The boom in El Paso, according to the story, can be seen in the growth of the year-old Network of Mexican Businessmen Living in El Paso, which has seen its membership grow to 235 because of the flight from the neighboring Mexican city of Juarez.
“Juarez is no-man’s land,” the organization’s president told the newspaper. The network’s members include restaurateurs, accountants, and professionals in real estate and finance.
The USA may have its problems but these tend to be political and economic as opposed to the persistent violence that seems to have become more and more prevalent in parts of Mexico.
For many Mexicans applying for permanent residency in the USA, confidentiality is all important. The level of violent crime in Mexico is a major concern and it is critical that their plans are kept secret to avoid any problems before they leave Mexico.
Reposted from Which EB-5 Blog.
If you are considering a permanent move to the USA you may be researching a number of issues. One of the major ones is likely to be tax implications. We have therefore included some commentary from one of our Tax specialists that may be of interest.
“In general terms taxes are currently lower in the USA than compared with many other industrialized countries. Of course generalities are always difficult, as there are many forms of taxation in each country. An individual’s tax liability will vary according to their particular circumstances. As an example take sales tax. The USA does not have a country wide system of sales or value added tax. An average figure for sales tax in the USA varies according to each State but is in the region of 5% to 7%.Some states do not have any sales tax! Compared too many European countries where the figure can be 20% this can make for a considerable difference in the cost of living. There is also a federal income tax in The USA which is progressive, increasing with the amount of income. Currently this ranges from 10% to 35% of taxable income with the highest level only cutting in at a taxable income exceeding $375,000 for a husband and wife filing a joint tax return. There are many deductions available which can reduce taxable income, these can include, home mortgage interest, property taxes, investment interest, local taxes, State sales taxes etc. Some States also levy taxes on income, figures vary. It is important to understand that tax liabilities are a highly individualized topic and each set of circumstances may differ. Different countries may have tax agreements with The USA to avoid double taxation and it is important to obtain professional advice”.
Reposted from Which EB-5 Blog
