The Source for Information on the U.S. EB-5 Visa Program
The Source for Information on EB-5 Visa Investments. “Inform your clients, protect your practice.” DECEMBER 2015
SEVEN EB-5 VISA IMMIGRATION ATTORNEYS CHARGED BY SEC WITH VIOLATING U.S. SECURITIES LAWS Page 08 EARLY NEW YORK WHEEL INVESTOR CLAIMS PROJECT HAS NO COHERENT BUSINESS PLAN, INEFFECTIVE MANAGEMENT Page 09
INDICTED DEVELOPER SUES CHINESE BROKERS OVER FAILED O’HARE HOTEL DEAL Page 08
HOW EFFORTS TO OVERHAUL VISA PROGRAM FAILED ON CAPITOL HILL Page 08
The Source for Information on the U.S. EB-5 Visa Program
The Source for Information on EB-5 Visa Investments. “Inform your clients, protect your practice.” DECEMBER 2015 Cash-for-Visa Con Page 04
Grassley Blasts EB-5 Immigration Program Extension Page 05
10 things you didn’t know about ‘immigration for the 1 percent’ Page 06
Early New York Wheel Investor Claims Project Has No Coherent Business Plan, Ineffective Management Page 09
Mount Snow Looking for Sewer Access Page 10
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Project Updates
Regional Centers
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Questions
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EB5Projects.COM • DECEMBER 2015
The Source for Information on EB-5 Visa Investments
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Posts
Cash-for-Visa Con
For the rich across the globe, it is possibly the easiest way to get a permanent residency in the United States (US). One can invest $500,000 or $1 million in specific business projects under the US Immigrant Investor Program, also known as “EB-5” and get a green card after two years. In the recent past, the scheme proved to be a hit among the Chinese, Mexicans and Nigerians. But now, American businessmen, real estate developers, lawyers and immigration agents hope to woo Indians. (Read more)
EB5Projects.COM • DECEMBER 2015
Related stories:
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• Summary of S.2415: EB-5 Integrity Bill • Federal budget compromise drops immigrant-investor visa reforms • What’s really at stake in the EB-5 investor visa overhaul: honesty • Urban Equality NOW Endorses the Latest EB-5 Agreement on the American Job Creation and Investment Promotion Reform Act • The EB-5 Piece of the Omnibus Spending Bill Is Settled • Controversial immigration for jobs program may end • A Bird’s-Eye View of the Pending EB-5 Legislation • The death of EB-5 has been greatly exaggerated • A Modest Proposal: Use the EB-5 Program to Cut the National Debt
Grassley Blasts EB-5 Immigration Program Extension
The Des Moines hotel should still qualify, but the proposed bill makes the project riskier because it only extends the investment program for a short period, said Patrick Hogan, president of CMB Regional Centers. CMB is the Quad Citiesbased business brokering the hotel’s foreign investment deal. (Read more) Related stories:
The program provides U.S. residency to foreign citizens who invest $500,000 in a job-creating U.S. business. Developers plan to use it to fund a convention hotel in downtown Des Moines.
• Congress Set to Extend Foreign Investor Green Card Program • Congress extends EB-5 ‘visa for investment’ policy until Sept. 30 • Extension for EB-5 visa program to be decided by December 16, as fraud worries persist • EB-5 gets five-day reprieve • Fight Over Green Card Investor Program May Be Near End • REAUTHORIZING AND REFORMING THE EB-5 REGIONAL CENTER PROGRAM: The American Job Creation and Investment Promotion Reform Act
Chinese Investors Expand Acquisitions Worldwide to Tap Outbound Chinese Travelers
There is an old Chinese saying which goes: ‘do not let your water flow into the farmland of others,’ meaning keep all the goodies in your family.
HSBC did a survey pegging outbound Chinese traveler numbers are expected to hit 242 million by 2024 which is more than double last year’s amount estimated by HSBC to be 116 million. (Read more)
EB5Projects.COM • DECEMBER 2015
A New York city taxi passes in front of the fabled Waldorf Astoria hotel in New York, which was purchased by a Chinese insurance company as part of an outflow of investment outside the country.
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Controversial Funding Program Could Swipe $20 Million from Downtown Hotel Plans The proposed 330 room convention center hotel at 435 Park in Downtown Des Moines has generated a new buzz for the city.
EB5Projects.COM • DECEMBER 2015
Davis Sanders with Renaissance Design Group in Des Moines said, “The lobby is going to be dynamic. Not like anything else in Des Moines.” Iowa Event Center Hotel Corporation Board of Directors President Gerard Neugent agreed, saying, “This is like the crowning jewel because it will turn what is a successful event center even more successful.” (Read more)
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10 things you didn’t know about ‘immigration for the 1 percent’ An EB-5 visa means that $500,000 can buy U.S. citizenship.
In a two-part series, airing this Tuesday and Thursday, Making Sen$e reports on how wealthy individuals can A little-known employment-based visa program has emigrate to the United States. (Read more) soared in popularity in recent years. The EB-5 Immigrant Investor Program gives green cards to wealthy foreigners who invest in commercial enterprises and create 10 fulltime U.S. jobs.
EB-5 Regional Centers Must File Form I-924A by December 29
USCIS reminds all approved EB-5 regional centers with a designation letter dated on or before Sept. 30, 2015, that they must file Form I-924A, Supplement to Form I-924, for fiscal year 2015 no later than Dec. 29, 2015. Regional centers are required to submit Form I-924A every year to demonstrate continued eligibility for the regional center designation. See 8 CFR 204.6(m)(6). (Read more)
Application for Medical School Is Resubmitted
A more detailed application for preliminary accreditation school’s nonprofit arm, Integrative Centers for Science and to establish a medical school in Martinsville (the College of Medicine (ICSM). Henricopolis School of Medicine, or CHSM) was resubmitted ““We’re very happy with the application,” Boaz said. He to the national accrediting agency on Tuesday. added he feels that good answers were provided to “We are submitting the final application, which is everything that was asked. “I’m confident we have a good approaching 300 pages,” said Dr. Noel Boaz, president of shot at getting approved.” (Read more) the medical school. He also is president of the medical
EB5Projects.COM • DECEMBER 2015 7
Indicted developer sues Chinese brokers over failed O’Hare hotel deal A Chicago developer indicted last year over a failed $912 million hotel project is now suing agents hired to raise money in China for the deal. A venture led by Anshoo Sethi sued 15 firms or individuals last week, demanding they return commissions they collected during fundraising for the unbuilt 995-room project near O’Hare International Airport. Sethi, 32, faces criminal charges that he bilked more than 290 Chinese citizens out of $160 million they agreed to invest in the development. Though he pleaded innocent last year, a recent court filing indicates he is preparing to plead guilty in the case. (Read more)
How Efforts to Overhaul Visa Program Failed on Capitol Hill
For more than a year, U.S. Sen. Charles Grassley had been pushing to overhaul a controversial program that gives green cards to foreigners who invest at least $500,000 in certain businesses. So when congressional leaders last week moved forward with a 10-month extension of the so-called EB-5 program without any changes, the Iowa Republican was less than pleased.
EB5Projects.COM • DECEMBER 2015
“Maybe it is only here on Capitol Hill—an island surrounded by reality—that we can choose to plug our ears and then refuse to listen to commonly accepted facts,” he said in a 33-minute diatribe on the Senate floor Thursday. The program, he said, is “riddled with flaws and corruption.” (Read more)
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Seven EB-5 visa immigration attorneys charged by SEC with violating U.S. securities laws The SEC announced yesterday that it has charged seven U.S. immigration attorneys who specialize in providing services to immigrant investors seeking an EB-5 visa with violating U.S. securities laws by offering EB-5 investments while not registered to act as brokers. (Read more)
Project Updates
Early New York Wheel Investor Claims Project Has No Coherent Business Plan, Ineffective Management For some of the partners in Staten Island’s New York Wheel project, the wheels are starting to fall off. Eric Kaufman, a minority shareholder in the ambitious observation wheel project, claims that the project has no coherent business plan, ineffective management and is experiencing unexplained cost overruns, according to allegations contained in an email to fellow investors Andrew Ratner and Jay Anderson of the Feil Organization. Kaufman, who made the claims in response to a 2014 capital call by the wheel’s board of directors, told Ratner and Anderson he would not pony up additional funds “without evidence of a viable business plan,” court papers show. (Read more)
An EB-5 Participant in CMB Export Infrastructure Investment Group 34, LP visited the La Entrada construction site in Santa Barbara yesterday (12/28/15). They were very pleased with the progress, and provided us with some new photos of the project. (Read more)
EB5Projects.COM • DECEMBER 2015
New Construction Pics of CMB Group 34: La Entrada
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Mount Snow Looking for Sewer Access
As part of an expansion at the Carinthia base area, Mount Snow is planning to build a new base lodge as well as 146 residential units. On December 9, Mount Snow vice president of development Laurie Newton came to the prudential board of the North Branch Fire District to ask for clarification of questions about the payments that Mount Snow would need to make in order to obtain permission to use 65,000 gallons of water a day. (Read more)
Mount Snow Addresses Silt Run-Off Pond remediation has seen silt run-off clouding water in the Deerfield River and Cold Brook.
“We’re hoping by Christmas, the discolored water is going to be something of the past,” said Peak Resorts Project Manager Brendan Ryan. As part of the state’s Act 250 permitting process which addresses environmental concerns, Mount Snow was asked if it would be willing to take material it would be excavating for the West Lake project and put it into East Pond. Ryan expects East Pond to be filled in by Wednesday, Dec. 23. (Read more)
EB5Projects.COM • DECEMBER 2015
Hudson Yards Developers Snag $5B in Financing for $20B Mixed-Use Project
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The developers of Hudson Yards, a mixed-use development in New York City, have finalized a $5 billion financing package — including $2.19 billion in debt, and a balance in equity financing. The package marks one of the largest capital raises for a real estate project in the U.S. since the 2008 downturn, according to The Wall Street Journal. (Read more)
Miami Global Realty, Inc., Presents Biscayne Park Residency, a Luxurious Senior Living Experience Community in Miami, Florida The Group 28 Loch Lomond project once again partners CMB Regional Centers with major US real estate developer, Woodridge Capital Partners, LLC. CMB and Woodridge have collaborated on three other projects, including the recent fully subscribed CMB Group 48 Century Plaza project. (Read It is with great pleasure for CMB Regional Centers, announces more) the USCIS has issued an I-924 and I-526 exemplar approval for the CMB Group 28: Loch Lomond project.
From Brooklyn to Berlin: David Belt Dishes on His International Ventures Just after finishing a project with St. John’s University in Rome and in the midst of starting his development company, Macro Sea, in 2009, David Belt went back to the Pennsylvania suburbs to visit his parents. He was driving around and found himself in a vast expanse of vacant shopping malls, which was not an uncommon sight so soon after the initial brunt of the downturn. (Read more)
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Century Plaza Hotel Development Project to Begin in March 2016 The Century Plaza Hotel development project featuring two 46-story luxury residential towers, restaurants, retail shops and a newly designed 400 room 5-star hotel will get underway in March 2016, according to Michael Rosenfeld, CEO of Woodridge Capital Partners who is leading the $2.5 billion project. The historic hotel will close its doors on March 1, 2016 and is expected to re-open in early 2018. (Read more)
Pair misspent millions from Chinese investors in EB-5 visa program, SEC says
For a dozen Chinese investors, the building at Martin Luther King Boulevard and Norton Avenue in Lynwood was supposed to be a ticket to the United States. A Redlands doctor turned developer promised to use their combined $6 million to convert the former adult daycare center into a nursing home, one that would get the investors green cards through a federal program aimed at boosting foreign investment. (Read more)
On the Market: Prokhorov to Buy Out FCR’s Barclays Stake; Related’s EB-5 Lobbying
EB5Projects.COM • DECEMBER 2015
Russian billionaire Mikhail Prokhorov has reached a deal with Forest City Ratner to buy the developer out of its share of the Brooklyn Nets and Barclays Center, which will allow him to take sole ownership of the team and the arena, according to Bloomberg. Mr. Prokhorov currently owns 80 percent of the team and 45 percent of the arena. (Read more)
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Company Able to Get PhoenixMart Servers Back from FBI
AZ Sourcing has gone to court to get back six network servers seized by the FBI last week. The Phoenix Business Journal reported that PhoenixMart’s parent company filed an emergency motion to get back the servers one day after FBI agents searched its offices in Scottsdale and Casa Grande. (Read more)
Regional Centers
Philadelphia Industrial Development Corporation (PIDC) Regional Center
Chicagoland Foreign Investment Group (CFIG) Regional Center
Florida EB5 Investments LLC Regional Center America’s Center for Foreign Investment, LLC Florida Overseas Investment Center RC Metropolitan Milwaukee Association of Commerce (MMAC)
California Green Regional Center
Cleveland International Fund, Ltd
South Atlantic Regional Center (SARC)
EB5Projects.COM • DECEMBER 2015
Golden Gate Global EB-5 Investment Fund
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EB5Projects.COM • DECEMBER 2015
Firms
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Guangzhou Investment Advisory Co.
Bisnow
Berry Moorman
Steve Smith Development LLC
H&H Law
Azarmehr Law Group
Bander Law Firm
Law Offices of Taraneh Khorrami
Manesh & Mizrahi, APLC
Law Offices of Feng & Associates
Zwaik, Gilbert & Associates, P.C.
IdeaVibe
Dentons
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EB5Projects.COM • DECEMBER 2015
Professionals
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Randolph M. Wright
Simon M. Edelstein
Austin Kim
Dae W. Lim
Michael A. Bander
Taraneh Khorrami
Mike S. Manesh
Hui Feng
Allen E. Kaye
Scott Anderson
Larry J. Kosmont
Matthew J. Merrick, Esq.
Mehron P. Azarmehr
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Questions
1. Question on how long bridge financing can be in place. - 22nd April 2015 Answer: The rules say that the bridge financing has to have been contemplated as short term. There is no guidance for what is defined as short term, and I have seen some attorneys try to use EB-5 capital to replace a mortgage (the very antithesis of short term in my opinion). The rule of thumb I typically see being followed is no more than 1-2 years.
2. Is there any kind of supervisor review before RFEs go out? - 22nd April 2015 Answer: In my experience, RFEs are hot and miss. I don’t know if there are supervisor reviews, but one would hope so. We have seen people get RFEs for items that were addressed in the plan and we have seen some that didn’t make a lot of sense give the context. We recommend making sure business plan headings to make it easy for adjudicators to find key information. We have also noticed that some RFEs become quite extensive (i.e. asking for more than what is reasonably necessary) if the business plan is too vague or not entirely credible.
EB5Projects.COM • DECEMBER 2015
3. How do investors become permanent residents if EB-5 is a visa program?
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Answer: Under the U.S. Immigration laws there are various Employment Based ( EB) categories, as in this case number 5 ( EB-5), that allows U.S. permanent residency. The EB-5 category allows a foreign national investor by investing in a new commercial enterprise and creating ten jobs to obtain U.S. permanent residency.
4. How are EB-5 investors affected if the JCE goes bankrupt? Answer: If the jobs have not been created and sustained for the requisite amount of time (2 years from I-526 approval), unfortunately the investor will not be granted and I-829 approval.
5. How can an EB-5 direct business be changed during conditional residence? Answer: There is some latitude in terms of how a business can change. Provided it is in the same industry and the TEA has not changed, reasonable changes to the business can be allowable, however there is no set definition on what is reasonable. A restaurant for example, should not have any issues if it should change from being quick service to fast food.
6. What position should EB-5 investors have in the capital stack? Answer: There is no hard and fast rule here. Investors and agents prefer to see investors in the first position, however this is not always possible and everyone knows that. If it is possible, it helps from the marketing perspective, but a strong project with a strong team and feasibility study can lessen this need. Additionally if a bank is lending money to the project, most investors and agents expect the bank to demand first position. Just be careful of placing the developer/ founder and other independent investors ahead of EB-5 investors. The lower down the EB-5 investor is in the stack, the harder it is to sell the deal. Capital preservation is an important consideration.
7. Someone told me that I have to have a feasibility study for my EB-5 project, is that true? Answer: There is no rule requiring a feasibility study, however, the program requires that a business plan be ‘credible’ and a feasibility study goes a long way in that regard by providing independent, third party validation of important things like demand, revenue assumptions, competitive profiling and the overall market picture. We here of more and more requests these days from USCIS for feasibility studies. Beyond the program rules, feasibility studies are becoming more and more common in EB-5 and therefore from a marketing perspective, a project is at a disadvantage if they do not have one as the investor must rely on what they can perceive as a biased view (i.e. that of the project owner) for many ‘credibility’ elements.
8. How long should my business plan be? Answer: There is no rule about how long a business plan needs to be as long as it meets all the program requirements, however, we discourage people from submitting exemplar plans with only summary detail. Anyone reviewing the business should be able to do a ‘deep dive’ into the details to get their questions answered and to get confidence in the project. Providing sufficient detail also helps not to have to answer too many questions from investors/ agents about details from a marketing perspective.
9. What are the pros and cons of using guest expenditures and/ or revenues inputs to my economic impact model to show more job creation? Answer: These kind of inputs in the economic model will help to add to the indirect job count, however: 1. Guest expenditures are contentious as an input and will likely invite push-back from USCIS and from investors. 2. Revenues are allowable inputs but this puts more risk on the certainty of job creation. If only development expenditures are used as inputs then the money only needs to be spent as indicated in the business plan for the jobs to be effectively created. If revenues are used as an input, the jobs tied to the revenues used as inputs cannot be claimed until those revenues are achieved so it’s a more difficult path to the green card for investors.
Answer: An RFE is a ‘Request for Further Evidence. RFEs are issued by USCIS if they are not convinced of claims being made in either the business plan or other parts of the overall submission, or if USCIS just wants more evidence or verification of certain details.
11. What is flexible adjudication and when would I use it? Answer: When unsure of whether a business plan has sufficient detail to meet the ‘exemplar’ standard, there is the possibility of trying to get the maximum benefit of an exemplar approval without losing time should USCIS determine that there is insufficient information to approve the plan as an actual/ exemplar. The way to go about requesting flexible adjudication is to make a written request when the project is being submitted that the plan be adjudicated as an exemplar, but if this is not possible to adjudicate the plan as a hypothetical. In most cases, this will not hold up the process and allows the
EB5Projects.COM • DECEMBER 2015
10. What is an RFE?
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project owner to move ahead with the project as quickly as possible should they not be able to get actual/exemplar approval right away. Saving the step of addressing the RFE that could otherwise result can also save some of the costs and time involved in doing so.
12. How can an EB-5 direct business be changed during conditional residence? Answer: There is some latitude in terms of how a business can change. Provided it is in the same industry and the TEA has not changed, reasonable changes to the business can be allowable, however there is no set definition on what is reasonable. A restaurant for example, should not have any issues if it should change from being quick service to fast food.
13. How important is it to show aggressive revenue growth for my EB-5 project? Answer: An EB-5 project is very different from other venture or mezzanine investments. A rule of thumb for VCs is that they want to see (on average) a return of 5-7 times the original investment within 5-7 years, so plausible aggressive growth is important. In EB-5, however, aggressive revenue and growth projections do not have the same importance to an EB-5 investor as they might to other investors such as a venture capitalist. Today’s more sophisticated investors know that aggressive projections often come with additional risks. Conservative projections and core stability are more important to EB-5 investors; they simply want to know that the business will be secure enough not to fail and to create the necessary jobs and make enough money to be able to pay them back.
14. How long should my business plan be? Answer: There is no rule about how long a business plan needs to be as long as it meets all the program requirements, however, we discourage people from submitting exemplar plans with only summary detail. Anyone reviewing the business should be able to do a ‘deep dive’ into the details to get their questions answered and to get confidence in the project. Providing sufficient detail also helps not to have to answer too many questions from investors/ agents about details from a marketing perspective.
15. If I have tenants in my project business who will be creating their own businesses, can I count those jobs towards qualifying EB-5 job creation?
EB5Projects.COM • DECEMBER 2015
Answer: This is referred to as ‘tenant occupancy’ in EB-5. While this is allowable, there are several hurdles that must be jumped in order to qualify for this kind of job claim and there is often some backand-forth with USCIS before they will allow it. For example one must be able to demonstrate that the tenant business is not moving jibs from another location. For a complete overview of tenant occupancy requirements have a look at the Guidance Memorandum issued by USCIS on December of 2012: http:// www.uscis.gov/sites/default/files/USCIS/Laws/Memoranda/Interim%20EB-5%20Tenant-Occupancy%20 GM.pdf.
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16. Why do I need a business plan writer for my EB-5 project if I already know how to write a business plan? Answer: A business plan writer who is experienced with EB-5 will have familiarity with Matter of Ho, RFEs, and other memoranda and guidance provided by USCIS. Additionally an experienced EB-5 BP writer should have some insight into what the market wants to see in order to be able to provide guidance along the way as well as to suggest when certain issues should be reviewed with counsel. You can of course write your own plan, however, it is hard to find a comprehensive knowledge resource to ensure that you have a comprehensive set of guidelines to work from.
17. How are EB-5 investors affected if the JCE goes bankrupt? Answer: If the jobs have not been created and sustained for the requisite amount of time (2 years from I-526 approval), unfortunately the investor will not be granted and I-829 approval.
18. How difficult is it to track information that I need to use for my regional centers annual reporting? Answer: This is something that is not often discussed. We strongly recommend using some tools that are out there for tracking and reporting purposes. There is at least one escrow service provider that offers a strong tool for this and I have met other service providers who have developed solutions as well. This makes the tracking and reporting part of a project much easier and helps to ensure that a project or regional center will remain compliant with regulations and keep their investors happy.
19. What is the difference between an I-924 and an I-924A? Answer: An I-924 is the submission used to form a regional center. An I-924A is the annual filing required by a regional center to report on regional center activity to USCIS. In USCIS’s words, “Form I-924A, Supplement to Form I-924 (“I-924A”) is used to demonstrate a regional center’s continued eligibility for the regional center designation and must be filed with USCIS on an annual basis for each fiscal year (October 1 through September 30) within 90 days after the end of the fiscal year (on or before December 29th).” I-924A reports include (among other things): aggregate investment amount, jobs created industries in which an RC is operating, I-526 and I-829 approvals. The form can be found on the USCIS website.
20. Do I need to worry whether an adjudicator will understand my business if it is very complex? Answer: An adjudicator should be able to understand the business as they need to determine whether it is credible. If your business is complex, the business plan should be presented in such a way as to present it in layman’s terms, but then it should provide sufficient detail so that the layman’s portion can be investigated and validated if need be. If you are in the drug development business for example, the business plan should discuss the drugs, what they do, patents and an overview of how they work. The backup detail could be a brief explanation of molecular compounds, but the plan does not need to extend into a lesson of molecular biology.
21. Can all of the invested funds be a gift? Answer: Yes; 100% of the invested funds can be a gift. There are a few things to remember, though. First, there must be a gift letter that makes it clear the funds are being gifted and not loaned, i.e., they do not have to be repaid and there are no other restrictions. Second, the lawful source of funds of the donor must be clearly documented. Third, if the donor’s funds are secured by a loan, USCIS might have a problem since the collateral likely will not be owned by (held in the name of ) the investor/petitioner.
22. How are EB-5 funds usually returned after I-829 approval?
23. How can I split my $1 million investment between land purchase and working costs? Answer: Forget it. It won’t work because merely building one residence is excluded from EB-5 completely by regulation. 8 CFR 204.6(e) definitions: Commercial enterprise means any for-profit activity formed for the ongoing conduct of lawful business including, but not limited to, a sole proprietorship, partnership (whether limited or general), holding company, joint venture, corporation, business trust, or other entity which may be publicly or privately owned. This definition includes a commercial enterprise consisting of a holding company and its wholly-owned subsidiaries, provided
EB5Projects.COM • DECEMBER 2015
Answer: The return of funds (the principal invested) typically can occur in one of two ways, depending on the type of EB-5 investment. In a loan model (which is really an equity investment in an NCE and a loan from the NCE to the JCE), the return of principal is “funded” when the JCE repays the loan to the NCE and the NCE “cashes out” its investors. In an equity model, the investor must find a willing buyer (sometimes the NCE or developer, sometimes an unrelated entity) to purchase his or her equity interest in the NCE at fair market value. Hopefully, the FMV is equal to or greater than the investor’s initial capital contribution. As you noted in your question, the return of funds cannot be contemplated or activated before I-829 approval.
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that each such subsidiary is engaged in a for-profit activity formed for the ongoing conduct of a lawful business. This definition shall not include a noncommercial activity such as owning and operating a personal residence.
24. How can someone without an employment history apply for EB-5? Answer: Employment history or other work experience and education are not requirements of the EB-5 immigrant investor law. While having business experience certainly will help if you are going to run a business (direct EB-5), you do not need to have employment history to qualify for this category.
25. Is an investment in a regional center guaranteed? Answer: The EB-5 immigrant investor law requires that the invested capital be at risk. Therefore, there can be no guarantee. You can seek to reduce the financial risk, but if a regional center project eliminates the risk by giving you a guarantee, that would be grounds to deny the I-526 petition.
26. Should I have the same attorney for all EB-5 applications? Answer: The filing of the I-829 comes with its own unique challenges, different from those faced in the I-526 petition. While remaining with the original attorney does indeed afford you with consistency, retaining an experienced and qualified EB5 attorney like the attorney at our law firm can help you prepare and file an approvable package with USCIS. A new attorney would correspond with the Regional Center to obtain all the necessary documentation for the filing, and prepare the forms and other supporting documentation.
27. What happens if a conditional permanent resident leaves the U.S. for six months? Answer: The absence likely will not affect your I-829 processing, but potentially, the USCIS (or more likely the CBP on your next entry) may question whether or not you have abandoned your status. An absence of more than six months raises that presumption. If required, you need to rebut that presumption by the submission of documents demonstrated ties to the U.S. such that you did not intend to abandon your U.S. residence. If you need to spend more than six months outside of the U.S., you should obtain a reentry permit.
28. What happens if the necessary jobs are not created? Answer: If either the investment is not sustained or the required number of jobs have not been created within two years (or within a reasonable period of time), then the I-829 will be denied, the condition will not be removed, and the investor’s permanent residence will be terminated.
EB5Projects.COM • DECEMBER 2015
29. What is the I-829 approval rate for the EB-5 program?
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Answer: The overall approval percentage rate is available because USCIS publishes its numbers (filed, approval, denied). The historical I-829 approval rate is between 88% and 90%. The numbers are not broken down any further so data for each regional center is not publicly available.
30. What must be proven in order to obtain removal of conditions on permanent residence? Answer: In order to remove the condition, the petitioner must demonstrate by a preponderance of the evidence that the investment has been sustained for the entire period of conditional permanent residence and that the required number of jobs have been created.
31. When is it possible to apply for U.S. citizenship? Answer: There are a number of requirements to apply for U.S. citizenship. The applicant must have been a lawful permanent resident (the two-year conditional period counts) for at least five years, must have good moral character, must not have any absences of more than six months, must have resided in the U.S. and been physically present for at least 2.5 years during the past five years, must be able to
speak, read, and write English (with certain age exceptions), and must pass a test of U.S. history and civics.
32. Can I appeal an I-829 denial to USCIS? Answer: No AAO appeal lies from the denial of an I-829. Such a denial will result in termination of status and the issuance of an NTA to place you in Removal Proceedings. An IJ has authority to do a de novo review but lacks the time and expertise. Any tricky denial is likely (but not an absolute thing) to be certified to the AAO first and an IJ or the BIA would likely rubber stamp the AAO or CSC Director’s Decision.
33. Do I need to invest before the I-526 petition is filed? Answer: Yes, Immigration wants to see money at risk. So you either need to be on an E-2 visa or have a U.S. partner or manager.
34. How are EB-5 funds usually returned after I-829 approval? Answer: What to look for: There should be a reasonable expectation of the ability to raise funds. Ideally, there is some kind of back up exit in place (not that common buy nice if you can find it), such as a party who is committed to refinancing the deal after 5 years based on certain conditions, or a party who is willing to buy out the project under certain conditions). The terms of exit, including variables, should be outlined clearly in the PPM. This should not change once you have agreed and signed the subscription agreement
35. How are public-private EB-5 projects different? Answer: The investment can be made into public private partnerships. These partnerships market well because of the element of government involvement, which tends to give investors confidence, both that the project will get completed (and create the necessary jobs, and rightly or wrongly, and that the project will not run out of money.
36. How can a regional center administer an ongoing EB-5 project? Answer: You can take this approach, but each EB-5 raise has to be net new; you cannot replace one EB-5 investor’s money with another. Typically, we see projects that might do a second raise of EB-5 capital to further relieve some of the short-term debt that it is holding or to finance a new stage of an existing project. Any investors that come in after a first round have to be assigned different jobs that have been created, but there can be provision that if there are buffer jobs for first round investors that are not used, these unused jobs can be made available to next-round investors.
37. How can an EB-5 application be expedited?
38. How can an EB-5 investment be split between several businesses? Answer: Two years is too large a gap between investments of 2 businesses, but may be OK if $150,000 is the remaining amount needed in original investment for a total of $500,000 and it is documented in the business plan.
EB5Projects.COM • DECEMBER 2015
Answer: Under certain circumstances the EB-5 investors I-526 petition can be expedited. For instance, the investor showing that it would be in the best interests of the national economy to approve the investors petition so that the investors funds can be used quickly to finically support the project. The I-526 petition can be expedited but the applications for the conditional permanent residency cannot be expedited.
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Events
EB5 INVESTOR CONFERENCE
EB5Projects.COM • DECEMBER 2015
CHINA PRIVATE EQUITY FORUM (LOS ANGELES)
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WEBINAR: 1/7/2016 EB-5 & DATA SECURITY – RISK MANAGEMENT AND INSURANCE CONSIDERATIONS
Litigation
OPEN RIVERS MEDIA GROUP INC. D/B/A/) OPEN RIVERS PICTURES, ALVIN WILLIAMS AND TAMMY WILLIAMS VS SOUTHERN FILM REGIONAL CENTER, LLC
EB5Projects.COM • DECEMBER 2015
UNITED STATES SECURITIES AND EXCHANGE COMMISSION VS ROGER BERNSTEIN
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION VS KEFEI WANG ORDER INSTITUTING CEASE-AND-DESIST PROCEEDINGS, PURSUANT TO SECTION 21C OF THE SECURITIES EXCHANGE ACT OF 1934, MAKING FINDINGS, AND IMPOSING REMEDIAL SANCTIONS AND A CEASE-AND-DESIST ORDER
UNITED STATES SECURITIES AND EXCHANGE COMMISSION VS MANESH & MIZRAHI, APLC
EB5Projects.COM • DECEMBER 2015
UNITED STATES SECURITIES AND EXCHANGE COMMISSION VS TARANEH KHORRAMI
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION VS ALLEN E. KAYE
UNITED STATES SECURITIES AND EXCHANGE COMMISSION VS BANDER LAW FIRM
UNITED STATES SECURITIES AND EXCHANGE COMMISSION VS AZARMEHR LAW GROUP
UNITED STATES SECURITIES AND EXCHANGE COMMISSION VS LAW OFFICES OF FENG & ASSOCIATES
EB5Projects.COM • DECEMBER 2015 27
EB5Projects.COM • DECEMBER 2015
“The Source for Information on EB-5 Visa Investments. Inform your clients, protect your practice.”
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EB5Projects.com, EB5News.com and EB5Info.com are administered by USAdvisors an independent Registered Investment Advisory (FINRA CRD #157403) firm that specializes in performing risk analysis, verification and due diligence on EB-5 visa offerings for investors, advisors and attorneys since 2007.