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January 14th, 2010 |
 Don't overlook the important issues in EB-5 selection I am continuing yesterday’s blog from a freezing cold and snowed-in Gatwick airport, London, where I have spent the last 24 hours waiting for the airport to clear a few inches of snow. It never ceases to amaze me when traveling all over the world, including countries where there is an awful lot of snow, such as Canada, Russia, Austria, Germany, to name but a few, that in the UK it only takes a little snowfall to close one of the world’s major airports! To make matters even worse, to rebook the flight you are put into a four hour line, longer than any of the ones you may go encounter for a ride in Disneyland, this would never happen in the USA, anyway enough about my rant for the day!
Yesterday we covered areas that are all too often overlooked by those considering the EB-5 visa, particularly when identifying issues that are very important leading up to the removal of conditions and the exit strategy for the eventual return of the $500,000 investment.
Today we will look at the implication regarding the 10 jobs per investor that will need to be created. Many programs refer to these jobs and refer to an economic model that will lay out how they will be created. However, there are other implications to these jobs which are very important but all too often not discussed.
Let us say you are investing in a program that is investing funds in a portfolio of different investments. For example a hotel, office building, medical center etc. Although the economic model they use to determine jobs may be sufficient to obtain successful approval at I-526 stage, what happens in two years when conditions are due to be removed? Will the projects be completed? Will sufficient tenants be found? Will those tenants provide sufficient proof of jobs to satisfy USCIS? There are a lot of questions that need answering and your continued stay in the USA may depend on those answers.
Taking a completely different scenario; what happens in a project which is in a particularly disadvantaged area? Let us say it actually does create the jobs required, however, the exit strategy to obtain the return of your investment requires the eventual sale of you and your fellow investors shares in the project. Will the project sell, if the area surrounding it remains depressed?
There are many other issues to be considered relating to the creation of jobs as well as exit strategy and tomorrow we will examine a jobs model in more detail that may take some of the uncertainty out of the process.
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Tags: eb-5, eb5, economic model, I-526, investment, job creation model, removal of conditions, USA, uscis, visa
Posted in Immigration | No Comments » |
December 22nd, 2009 |
 Solve the EB5 Visa Puzzle Green card restrictions can be removed long before investments pay off.
Immigrant investors looking for the right Visa to gain residency in the United States shouldn’t expect a fast return on their money from the EB-5 program. Still, when the right choice in a regional center is made, green card restrictions can be successfully removed fairly quickly and risk can be minimized.
The EB-5 program provides a relatively fast way to obtain a permanent green card, but it doesn’t necessarily offer a fast return on investment. There are risks involved in all regional center investments, but they can pay off with eventual earnings returns and, more importantly, a permanent green card.
Immigrants who choose the EB-5 Visa route can expect to have to wait between 21 to 24 months before they can file an I-829 petition for the removal of conditions on a green card. After this, the wait can be several years for an investment return.
The general rule of thumb is five years, Still, it is important to keep in mind that regional centers are not allowed to guarantee a return on investment. Although the EB-5 program is still relatively new, some early immigrants are beginning to see their returns now.
There are steps investors can take to increase their chances of seeing a return on investment. Carefully researching different regional centers, their programs and the stability of investments is vital. Consultants and experienced advisers can be very useful in this process.
Ask all pertinent questions before making a decision with an EB5 investment visa.
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Tags: consultants, eb-5, eb5, green card, I-829, immigrants, investment, investment visa, regional center, removal of conditions, visa
Posted in Immigration | No Comments » |
May 25th, 2009 |
Safety is an important consideration, as is investment risk. Your impartial third-party advisor will also want to be sure all of your potential EB-5 decisions have been thoroughly evaluated from an investment perspective too. You need to know that there is a reasonable potential for a return of your investment and on your investment. Keep in mind that this is always necessary, even if your only true concern is getting a U.S. green card and gaining lawful permanent U.S. residence.
A bleak outlook for return on investment has implications that extend beyond your personal financial circumstances. If you think return on investment is of little or no concern to you because you are only interested in your ability to emigrate, consider this—how likely is an investment project to meet investment and job-creation criteria if it does not stand the tests of viability and produce a return on your investment? Is that investment even capable of achieving the bare-minimum of immigration petition approval and removal of conditions?
The potential for return on your investment needs to be evaluated from several points of consideration. It is always strongly recommended that you seek appropriate professional advice in evaluating all investments; this is not a personal recommendation, it is the advice of any reputable professional or resource in the field. Some of the points of consideration that your third-party advisor will be concerned with are:
• The implications of the viability of the project and return on investment from an immigration perspective.
• Return on investment from a financial investment perspective.
• The published/projected rate of return on investment.
• The variability of the rate of return—is it fixed (such as for loan interest returns) or dependent on market or other factors?
• How well suited the projected return is to your lifestyle and financial plans.
• Projected rates of return in comparison to actual returns on this or other past projects (in other words, historically speaking, has the regional center achieved the rates of return for its investors that it has said it would?).
Your best interests are served when you and your advisor are able to work together to match you to the regional centers, and eventually center, that is/are best suited to you all-around. That means that not only should your immigration goals be prioritized, but also your goals for investment and return. As any investor knows, each individual has his or her own investment style. What you consider to be a good rate of return is very much related to your style, as is what you consider to be a reasonable amount of risk. It takes a lot of work and evaluation to match you to the regional center that is really suited to your needs.
Next we’ll look at hidden costs and fees associated with your EB-5 investment. In the meantime, if we can answer any of your questions please contact Stephen Parnell or Andrew Bartlett at Which EB5
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Tags: eb-5, green card, Immigration, investment, regional center, removal of conditions, safety
Posted in Immigration | No Comments » |
May 18th, 2009 |
Immigrating through an EB-5 investment hinges heavily on the job creation of the regional center. Without creating jobs, there is no way a project will result in an approved green card application. Economic stimulation through job creation is the express mission of the EB-5 and the regional center pilot program. What’s more, the approval of your green card application is not all that is riding on the center’s job creation methodology—the removal of conditions on the green card (which happens after two years) and your full permanent immigration status also relies on it.
The ability of the center to actually come through on their job creation forecasts is integral to achieving full permanent residence in the U.S. At the completion of the two-year conditional visa period, the number one factor that the USCIS will be looking to see proven is the implementation of the center’s business plan and the actual—not proposed or forecasted—creation of at least ten jobs which can be directly attributed to your $500,000 (or 1 million if that is the case) investment.
To say the very least, the job creation methodology of the regional centers you are considering is crucial; therefore, your advisor will be focusing in heavily on evaluating their methodology, specifically looking to see that the jobs created, either indirectly or directly, can be solidly accounted and their projections reproduced. In addition, your advisor will dig deeper to try to determine what else backs up the center’s original plan. As he or she does this, he will put the center’s plan to the test, asking questions such as:
• How did the center arrive at its calculations for job creation?
• What documentation and analysis supports the number put forth by the regional center?
• Do these numbers make sense?
• How will job creation be monitored as the project progresses?
• Is there a plan to remedy the situation if job creation is not proceeding as planned?—In other words, a plan to make up for your lost, but still required, ten jobs?
Along with determining the number of jobs created, you need to know just what that job creation looks like. You need to know what types of jobs are being counted toward the requisite number. You need to know if those jobs are positions that are directly created and attributable to your investment money, or if they are projected jobs that will be induced or indirectly created by extension of the business plan and project funds.
Certainly the great advantage of the EB-5 regional center program is that indirect job creation is accepted by the USCIS. This means that you need to be sure of the center’s job creation methodology, and to do that you will most certainly want the added security of having a professional researching that and double-checking the information that is used to produce the number and the conclusion that has been arrived at. He or she will look to see that not only does the center have a plan for creating jobs, but that at minimum ten of those positions will fulfill the requirements of being full-time positions (remembering that part-time positions do not qualify), and that those positions are solely attributable to your investment money, as there is no overlap or “sharing” of job creation allowed between investors.
To give you some idea of how complex an undertaking proving job creation is, here are some of the different ways that regional centers and the USCIS go about proving that your investment will result in jobs being created.
As we know, the limited liability company or limited partnership (the regional center project) that you invest in does not have to directly hire anyone. Instead, the center’s plan may be to arrange for the businesses and loan recipients who borrow or obtain the funds to produce the jobs by directly creating positions and filing them through direct hires (in other words, the person or entity who receives the money hires, ten workers).
Another common scenario in the case of real estate-based projects is that the businesses who rent the developed space will directly hire a set amount of people into full-time positions they have created. To determine qualification of the jobs created, the CIS will “plug” these numbers into an econometric model. That model will have certain multipliers based on each specific industry. To be successful, the model should return at least ten new jobs created based on that model per each investor. These must be new jobs, and cannot be comprised of transferred positions that are simply relocated into the regional center’s geographical area.
Another possibility is that the regional center project had its job-creation model approved based on a specific number of jobs being created for a certain amount of investment money. For example, the partnership (regional center) may lend money to a private company or a government agency who in turn agrees to invest a specified amount of money. These figures are again “plugged into” an econometric model that projects the numbers of jobs created for certain levels of investment, and for certain amounts of money spent by the borrower. When this is the case, the project must be able to illustrate the model, and also prove that the borrower has spent that requisite amount of money to have resulted in the creation of at least ten new jobs.
Job creation analysis is a highly complex undertaking. Some centers are partnered with Universities and leading economists for the projection and calculation of job creation. That is not to say that you can trust in a job creation claim from a regional center just because they have a big name University or professional on their list, but just to show that this is no simple matter, and that it is one that requires thorough analysis by an experienced professional. A good advisor will have the experience working with centers, their plans and projects, and the economic tools that indicate the reliability of a regional center’s job creation projections.
Too often the viability of a project’s job creation methodology is taken for granted by investors who are given only the rosiest of projections by EB-5 centers. But with everything riding on this one factor, there is no room for that kind of error. You must be as sure as you can be that the jobs created in your name will be there when the time comes to prove them.
Next we will look at Location considerations of regional centers. In the meantime, if we can answer any of your questions please contact Stephen Parnell or Andrew Bartlett at Which EB5
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Tags: eb-5, econometric model, green card, Immigration, investment, investors, job creation, permanent residence, regional center, regional center pilot program, removal of conditions, uscis, visa, Which EB-5
Posted in Immigration | No Comments » |
April 14th, 2009 |
Regional center track records are one of the first forms of comparison that help investors choose between various investment possibilities. Early on in the EB-5 program, that was almost enough to compare center to center and come up with the best investment. As there were only a handful of approved centers, comparisons were fairly straightforward. That situation has changed dramatically in recent years. With more than 30 approved centers and more being added to the list on a regular basis, it is much harder for immigrants to compare all the centers, to understand the diversity of information and statistics that are found, and to be able to confidently choose which center is best for their needs. Add to that the facts we discussed before—the fact that the centers should not be your one and only reliable source of research and information—and what you have is an unmanageable situation for the average immigrant investor.
In addition to this, and this is a very important fact to highlight and always remember, there can be quite a lot of differentiation even within an established and trusted regional center. A good track record with a specific or past project may not be a guarantee of the investment and visa potential of the next planned project. For this reason it is always necessary to evaluate not only the overall and long-term track record of the center, but also the track record of each project in conjunction with an in-depth analysis of the proposed projects that are being offered by the center at the current time.
It is also critical to know that designation or approval as a regional center by the USCIS does not mean that all projects and petitions emanating from that center will automatically be approved. Each project that the center undertakes is evaluated individually, as are all petitions and applications. It is true that designation as a regional center is a more secure avenue of investment for immigration, but this is only a threshold requirement—the project and the petition still need to prove their worth beyond doubt to the USCIS.
The track record of a regional center, while not a guarantee of individual approval, is a strong indicator of what the center and its management are capable of achieving. It indicates whether or not the program and its principals have the “know how” to develop strong investment programs that will qualify as immigration investments and get approved by the USCIS, and whether or not the individual investor’s petitions will be approved, both at the I-526 Stage for Conditional Permanent Residence and at the I-829 stage for Removal of Conditions.
That being said, track record alone is still not enough for you to commit to any regional center. The project that you are considering investing in also needs to be thoroughly evaluated on its own merits. Success with a past project is a good start, but in conjunction with this you need professional advice to determine the potential viability of the project that you will be investing in.
To add yet another contributing factor to the mix, all the recently launched centers and new projects must also be evaluated and considered. It takes an even higher level of care, research, and due diligence to evaluate the potential of a brand-new project where there is little or no record of success to fall back on. In order to consider a new center and/or project on your regional center “short list”, it must be thoroughly researched in conjunction with economic forecasts and business plans in order to determine its potential viability.
Contact Andrew Bartlett or Stephen Parnell for additional in-depth analysis of any potential regional center you are considering.
In the next blog we will look at the geographic location of a regional center and what they may mean to you as a potential investor.
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Tags: andrew bartlett, eb-5, I-526, I-829, immigrant petition, regional center, removal of conditions, stephen parnell, uscis
Posted in Immigration | No Comments » |
February 21st, 2009 |
It is fascinating how potential immigrants from different countries have such widely varying initial priorities when looking at their choice of regional center investment programs.
In working with clients from around the world it can often surprise us how these initial priorities affect the regional center choices that clients of different nationalities make.
We remain concerned that not all potential EB5 applicants are given the widest range of regional center options.
Your choices at this critical stage can have a major impact.
For example, some programs may well seem an excellent option in terms of successfully completing the initial I-526 petition stage, and the two year conditional green card approval. However, this is only half the story. It is also necessary to have the conditions removed, (application at 21 months for I-829 removal of conditions) to ensure your stay in the USA is not of a temporary nature. In addition, most investors are looking for a return of their investment after a finite number of years.
The important implications of your early choices require detailed explanation – for further information without obligation please contact Which EB5.
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Tags: eb-5, eb5, I-526, I-829, Immigration, options, regional center, removal of conditions, USA
Posted in Immigration | No Comments » |
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