EB-5 News Archive for March, 2011
There are two different programs in which the EB-5 immigrant investors are allowed to invest in; the regular Direct EB-5 Program and the EB-5 Regional Center Pilot Program. To encourage immigration through the EB-5 category, Congress created the temporary Regional Center Pilot Program in 1993. The Pilot Program was created to stimulate economic activity and to create jobs for U.S. workers, while simultaneously giving eligible aliens the opportunity to become lawful permanent residents.
Through this innovative program, foreign investors are encouraged to invest funds in an EB-5 Regional Center and project that have been approved by the U.S. Citizenship and Immigration Services (USCIS). A Regional Center is defined by “any economic unit, public or private, which is involved with the promotion of economic growth, including increased export sales, improved regional productivity, job creation or increased domestic capital investment.”
In order to receive Regional Center designation from the USCIS, the business entity must submit a proposal along with business plans and other detailed documents showing how it plans to focus on development of a business and economic impact in a specific geographic region within the United States providing the specified growth. The proposal must show in detail how the EB-5 investment funds will be used to create direct and indirect jobs. Regional Centers typically look to be formed in certain areas called “TEA” (Targeted Employment Area); the definition of “TEA” is a geographic area or political subdivision located within a metropolitan statistical area or within a city or town with a population in excess of 20,000 with an unemployment level at least 150% of the national unemployment rate. TEAs within a state can also be identified and designated by the Governor of the specific State provided the proper documentation is provided to USCIS.. If the Regional Center achieves this TEA designation, they will then be able to take advantage of the lower capital investment requirement of $500,000 from the EB-5 immigrant investors.
The most important requirement from USICS that all Regional Center applicants should keep in mind is that the business (or “project”) applying for Regional Center designation approval, must prove that ten (10) permanent jobs will be created and sustained for a minimum of two years per every $1,000,000 or $500,000 (if Regional Center is located in TEA) received from EB-5 immigrant investor. The USCIS also reviews the Regional Center’s Business Plan and Marketing Plan along with the Business Plan and Offering Documents for each individual EB-5 Project within the Regional Center.
Statistics show a 105% increase in initial Regional Center proposals filing in fiscal year 2011 first quarter. By the end of fiscal year 2010, the USCIS confirmed 110 Regional Center proposals had been filed and at the end of the first quarter for fiscal year 2011, 116 Regional Center proposals had already been filed. In fiscal year 2010, approximately 55% of the initial proposals were approved and in fiscal year 2011 first quarter, 76% of the initial proposals were approved. It is clear that the EB-5 Pilot Program has increased in popularity in the past year.
You may have the greatest idea for an EB-5 opportunity and more than likely, if presented to par with the USCIS’ requirements, your application will be approved; however, if you do not have the right marketing plan or the best marketing team it is likely that the Regional Center will fail to attract immigrant investor. It is highly recommended that those businesses seeking EB-5 Regional Center designation work with the right team to develop a winning business plan and marketing strategy that will be used to raise EB-5 capital from foreign investors. Now more than ever it is critical that you hire a qualifiedEB-5 Consultant to make certain that your Project and Regional Center raises the capital that it needs. We recognize that the success of your project depends on how attractive your offering is to the EB-5 Investor, now more than ever it is critical that you hire a qualified EB-5 Consultant to make certain that your Project and Regional Center raises the capital that it needs and nobody knows the EB-5 market like Exclusive Visas. By paying close attention to the concerns of the EB-5 investors, we ensure that your Regional Center Project is set apart from the others.
To learn more about the depth of our services and about the EB-5 Investor Visa Program, please contact Fred Burgess or Joe Sloboda for a personal consultation via email at email@example.com or submit our “Contact Us” form.
Alongside countries like China, India, and Korea; Russia is attracting more and more interest as an EB-5 market. However, immigration from Russia to the United States is still not at levels similar to China and India.
Despite the infancy of the Russian EB-5 market, the Exclusive Visas’ team decided to pay a visit to this mysterious country and evaluate the situation themselves. During their visit to Moscow, Russia from March 9 to March 12, our team was able to provide EB-5 consulting services to many interested Russian citizens.
Representatives from Exclusive Visas held 4 seminars for agents in Russia educating them on EB-5 legislation, EB-5 visa requirements and existing opportunities of the investor visa program in the United States. Additionally, Exclusive Visas took part in the two-day Moscow International Investment Show on March 11-12, where we were able to evaluate the actual interest of the visitors in the EB-5 Investment visa program and particularly in the Regional Center Program.
The immediate success outcome of the trip to Russia proves that there is not enough marketing of the EB-5 investment program in Russia and due to its misinterpretation and absence of clear understanding Russian investors have not really considered the EB-5 Visa as their way to United States permanent residency. However, proper presentation of the EB-5 information and the ability of a company like Exclusive Visas to clearly explain the EB-5 visa requirements have raised serious interest among many visitors of Investment Show in Moscow, inspiring the Exclusive Visas team to continue working with this market closely.
Russia is attracting more and more interest as an EB-5 market and we are seeing the number of EB-5 applicants grow year over year from Russia. However, immigration from Russia to the United States is still negligible. This can be explained by existing conditions in the market: already open economy that is still overcoming consequences of its past.
On the one hand, Russia strived to become a modern, open economy and succeeded in becoming part of global economy, with growing real estate, consumer and financial markets. The improved transparency of the Russian tax system has proved to be effective in ensuring greater tax compliance, therefore, increasing the prospective Russian investors’ ability to demonstrate the source of their funds (a vital part of the EB-5 program process). The privatization of the 1990s and the ensuing real estate boom of 2000s created large numbers of wealthy people, who represent potential EB-5 investors. Moreover, there is no need to be concerned about currency restrictions because, in contrast with Korea and China, there are no limitations in Russian law on transferring funds abroad to escrow accounts or EB-5 Regional Centers and projects.
On the other hand, besides the overall improvement of economic situation in Russia, there are reasons to still be cautious when searching for investors in this great country. The growth of the EB-5 program in Russia is being deterred by little to no marketing of the program; the short-term mentality of the typical Russian as well as the perceived risks of EB-5 investments regarding the two-year conditional status. When you add all of this to the continuing existence of grey and corrupt source of funds; the unattractiveness of the U.S. taxation of the worldwide income on permanent residents; and low return on investments, at first glance the typical qualified Russian will look at other options. Moreover, there is a high chance of a Russian EB-5 participant facing inadmissibility issues being related to the so called “Russian mafia times” of the 1990s and early 2000s.
Overall, there exist many myths surrounding EB-5 program in Russia as well as a lot of misinterpretation. Therefore, it is vital for EB-5 consultants to educate their clients and ensure proper understanding of EB-5 investment in the U.S.: its requirements, benefits, and risks.
However, with all of this being said it is amazing how far relations between the United States and Russia have come in the last 20 years. And it is refreshing to see such promising possibilities for the EB-5 program in the Russian market.
The EB-5 Investment Program was created by the US federal government in 1990. According to this investor program, foreign nationals have an opportunity to obtain U.S. green card eligibility by investing $1 million (or $500,000 if the EB-5 investment is made in the project located in a Targeted Employment Area) in the USA project or company that allows either to maintain or to create at least 10 full-time jobs.
Very often investors get confused with the total amount of money they have to come up with in order to obtain their green card through investment. Generally, most of them realize that the USA investor visa requires $1,000,000 investment or $500,000 if the EB-5 investment is made in the project located in a Targeted Employment Area.
However, many investors are not familiar or get confused with other costs that may arise when they decide to take part in the investor visa program. We will try to clarify that below.
First of all, when searching for a Regional Center project, the investor needs to consider paying an administrative fee, which varies depending on the Regional Center. On the one hand, there are Regional Centers that do not charge administrative fee. On the other hand, there are those that charge up to $60,000. However, the average administrative fee required by Regional Centers is about $35,000. Keep in mind that a higher administrative fee does not necessarily mean better programs. It is important to understand where the money is going. To understand how your investment funds and the administrative fee are being used it is important to understand that the EB-5 Regional Center and the EB-5 Project are two independent entities. The total amount of investment ($500,000 or $1,000,000) is invested into the development of the EB-5 Project and the administrative fee charged by the EB-5 Regional Center usually covers the Regional Center’s costs connected with its approval, as well as marketing, referral fees and promotion of the EB-5 Project.
Secondly, the investor should know that obtaining an EB-5 green card is a complex process that requires hiring an experienced EB-5 attorney. The costs associated with the attorney’s EB-5 services usually vary from $10,000 to $18,000.
Moreover, the investor should keep in mind that on top of legal fees, associated with the immigration attorney, he/she will need to pay fees to the USCIS (United States Citizenship and Immigration Service) when filing petition I-526 for conditional permanent residence, and in two years after its approval they will need to file petition I-829 for removal of conditions and will need to pay an additional fee to the USCIS.
Many EB-5 investors that have contacted us think that the total cost of the EB-5 Visa is $500,000 or $1,000,000. It is important to always keep the fees mentioned above in mind, to avoid confusion.
If you would like to better understand the EB-5 process and the costs associated with the program, please contact Fred Burgess or Joe Sloboda via email at firstname.lastname@example.org or use our online request form.