(Source: EB5info.com) Attorneys Henry Handler and William Berger of the law firm of Weiss, Handler & Cornwell, P.A. in Boca Raton, Florida have filed a memorandum of law in support of the motion to intervene on behalf of EB-5 visa applicant and investors in the IRCTC Chicago Convention Center project. See complete report at http://eb5info.web11.hubspot.com
Michael Gibson Report: Motion filed on Behalf of EB-5 Chicago Center Project Investors
Thursday 28 February 2013
Update: The Invest in America 2013 (Shanghai) Summit & Exhibition announces exhibitors list
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| 2012 Shanghai Summit Opening Ceremony |
Official Event Websites
Event Schedule
Check-in and Setup: 2:00 pm – 8:00 pm March 14, 2013
Exhibition Date: 10:00 am – 5:00 pm March 15-18, 2013
Check-in and Setup: 2:00 pm – 8:00 pm March 14, 2013
Exhibition Date: 10:00 am – 5:00 pm March 15-18, 2013
Dismantling Date: Starting at 3:30 pm - 5:00 pm March 18, 2013
Highlights of Draft USCIS EB-5 Policy Memorandum
This alert will discuss the highlights of the draft policy memorandum in terms of either new policies or clarifications of previously unclear policies. It is not meant to be a summary of the entire memorandum, most of which merely restates existing law and policy.
It is important to note initially that the memorandum is not an exhaustive memorandum in that it does not cover most aspects of I-924 adjudications, including adjudications of EB-5 projects. For example, it makes no reference to use of EB-5 money to pay back bridge financing; whether EB-5 loans can be paid back to a new commercial enterprise before conditions are removed; whether direct employees of the job-creating entity (indirect employees of the new commercial enterprise) must be “qualifying employees”; etc.
Perhaps the most significant change in policy articulated in the draft memorandum relates to the “material change.” The draft policy memorandum, if implemented, would reverse the policy contained in the December 11, 2009 Neufeld Memorandum, which established the material change standard. The draft memorandum appears to have gotten it right. The agency draws a distinction between a material change occurring between the filing and the adjudication of Form I-526 or the filing of Form I-526 and the approval of conditional permanent residence status), which would require a new I-526 petition, and a material change occurring after approval of the I-526 petition, which would not require a new or amended I-526 petition. The stipulations are that the changed business plan must still fall within the I-924-approved industries for the regional center and that the investment capital be “expeditiously redirected into the alternate project, such that USCIS can conclude that the full amount of capital was at risk and fully available to the job creating entities throughout the period of conditional residence.”
USCIS appears to draw a distinction between a material change to a business plan and a complete change in either the job creating entity or the new commercial enterprise. USCIS leaves that area rather ambiguous stating that it “may not comply with the requirements to invest and sustain the investment.” The meaning of that sentence is unclear and needs to be clarified.
USCIS states an intent to develop a mechanism for a petitioner to notify the agency when there are substantive material changes. This would be welcome, and it is an improvement that has been suggested on multiple occasions.
Finally, on the subject of material change, USCIS notes that it may need to revisit issues that had been adjudicated in the I-526 process when there is a material change in the business plan. Examples given are when the investment proceeds are diverted from one industry to another with different multipliers for job creation projections, when the number of investors in a project have changed dramatically or when certain assumptions made in the economic report were not satisfied.
The second area where USCIS states new policy relates to the timing of job creation, specifically with respect to adjudication of the condition removal petition. USCIS restates its position that, in the adjudication of the I-526 petition, the agency must be satisfied that the jobs will be created within 2 ½ years of the approval of the I-526 petition. This author has opined on a number of occasions that this standard is incorrect, and it may be a subject of a separate alert in the near future. For now it remains USCIS policy.
The important new language in the memorandum relates to adjudication of I-829 petitions. First, the memorandum notes that the regulations allow for “substantial compliance” with both the capital investment requirement and the job creation requirement. This is not new, but is a helpful indication that the Service realizes that its regulations do not require full compliance, but only substantial compliance.
The key language relates to the regulatory requirement at the I-829 stage that the jobs be created “within a reasonable time”. USCIS for the first time establishes a one year period after the I-829 filing deadline as generally being considered a “reasonable time” (Director Mayorkas, at various public meetings, had previously advocated 6 months). The draft memorandum states that jobs that will be created within a year of the I-829 filing deadline will “ordinarily” be considered to be created within a reasonable period of time, whereas jobs projected to be created after that timeframe usually will not be considered to be created within a reasonable time (absent extreme circumstances, such as force majeure.)
Various parts of the memorandum deal with geographical areas, either for purposes of a regional center or for purposes of determination of a targeted employment area. The memorandum iterates the standard that the new commercial enterprise must be “principally doing business” in the TEA and adds that a majority of the required jobs must be created in the TEA. The memorandum provides more detail than previously available regarding factors used to determine where businesses “principally do business.”
Helpfully, USCIS reiterates its deference to state determinations of the appropriate geographical area that has been designated as the TEA. This had previously been clarified after USCIS had earlier challenged state geographical TEA determinations.
Another area where USCIS has, at different times, taken varying positions is the issue of whether indirect jobs can be created outside the geographical boundaries of a regional center. In its most recent prior iteration of policy, USCIS had indicated that these jobs can be counted subject to case by case determination. In this draft policy memorandum USCIS eliminates any conditions whatsoever and simply states that indirect jobs can qualify even if they are located outside of the geographical boundaries of the regional center.
The least helpful language related to geography relates to the determination of the geographical boundaries of a new regional center. Those of us who work with developers in creating new regional centers are very aware of USCIS’ restrictive policies in recent times on this subject. USCIS states that the supply chain, as well as the labor pool, for proposed projects will be important in determining the reasonableness of a proposed regional center’s geographic boundaries. The most disturbing language relates to the regional center having to prove that the proposed economic activity “will substantially promote economic growth in the proposed area as a whole.” Does this mean that every project in the regional center must impact every area of the regional center? This is particularly problematic with respect to previously-approved regional centers with a broad geographical area.
The memorandum clarifies some previously-held agency positions relating to the requirement that the investment be “at risk”. Significantly, USCIS states that if an investor is guaranteed the right to eventual ownership or use of a particular asset, including a real estate interest, the value of the guaranteed ownership or use of such asset will be subtracted from the amount of the investor’s capital contribution in determining how much money was placed at risk. The draft memorandum also states a previously-stated, but rarely- used, position that the investor’s money may be held in escrow not only until approval of the I-526 petition, but also until the investor becomes a conditional permanent resident. Finally, the memorandum confirms that an investor can receive a return on his or her capital during or after the conditional residency period, so long as the return was not previously guaranteed and so long as the funds are not a return of the investor’s principal (but rather a return on principal; namely a profit).
The draft memorandum reiterates some helpful language from the previous draft memorandum regarding the so-called fund model of investments across a portfolio of businesses. In summary, USCIS states that the investment must be made into a single commercial enterprise, but that commercial enterprise can deploy the capital among various wholly owned subsidiaries (in the case of a direct EB-5) or unrelated entities (in the case of regional center EB-5s). Left unstated is the agency position on the extent to which a specific investor’s funds must be traced to a specific job-creating entity and the impact if one of several job-creating entities does not create sufficient jobs. Briefly, the following are other points of note in the draft policy memorandum:
Finally, on the subject of material change, USCIS notes that it may need to revisit issues that had been adjudicated in the I-526 process when there is a material change in the business plan. Examples given are when the investment proceeds are diverted from one industry to another with different multipliers for job creation projections, when the number of investors in a project have changed dramatically or when certain assumptions made in the economic report were not satisfied.
The second area where USCIS states new policy relates to the timing of job creation, specifically with respect to adjudication of the condition removal petition. USCIS restates its position that, in the adjudication of the I-526 petition, the agency must be satisfied that the jobs will be created within 2 ½ years of the approval of the I-526 petition. This author has opined on a number of occasions that this standard is incorrect, and it may be a subject of a separate alert in the near future. For now it remains USCIS policy.
The important new language in the memorandum relates to adjudication of I-829 petitions. First, the memorandum notes that the regulations allow for “substantial compliance” with both the capital investment requirement and the job creation requirement. This is not new, but is a helpful indication that the Service realizes that its regulations do not require full compliance, but only substantial compliance.
The key language relates to the regulatory requirement at the I-829 stage that the jobs be created “within a reasonable time”. USCIS for the first time establishes a one year period after the I-829 filing deadline as generally being considered a “reasonable time” (Director Mayorkas, at various public meetings, had previously advocated 6 months). The draft memorandum states that jobs that will be created within a year of the I-829 filing deadline will “ordinarily” be considered to be created within a reasonable period of time, whereas jobs projected to be created after that timeframe usually will not be considered to be created within a reasonable time (absent extreme circumstances, such as force majeure.)
Various parts of the memorandum deal with geographical areas, either for purposes of a regional center or for purposes of determination of a targeted employment area. The memorandum iterates the standard that the new commercial enterprise must be “principally doing business” in the TEA and adds that a majority of the required jobs must be created in the TEA. The memorandum provides more detail than previously available regarding factors used to determine where businesses “principally do business.”
Helpfully, USCIS reiterates its deference to state determinations of the appropriate geographical area that has been designated as the TEA. This had previously been clarified after USCIS had earlier challenged state geographical TEA determinations.
Another area where USCIS has, at different times, taken varying positions is the issue of whether indirect jobs can be created outside the geographical boundaries of a regional center. In its most recent prior iteration of policy, USCIS had indicated that these jobs can be counted subject to case by case determination. In this draft policy memorandum USCIS eliminates any conditions whatsoever and simply states that indirect jobs can qualify even if they are located outside of the geographical boundaries of the regional center.
The least helpful language related to geography relates to the determination of the geographical boundaries of a new regional center. Those of us who work with developers in creating new regional centers are very aware of USCIS’ restrictive policies in recent times on this subject. USCIS states that the supply chain, as well as the labor pool, for proposed projects will be important in determining the reasonableness of a proposed regional center’s geographic boundaries. The most disturbing language relates to the regional center having to prove that the proposed economic activity “will substantially promote economic growth in the proposed area as a whole.” Does this mean that every project in the regional center must impact every area of the regional center? This is particularly problematic with respect to previously-approved regional centers with a broad geographical area.
The memorandum clarifies some previously-held agency positions relating to the requirement that the investment be “at risk”. Significantly, USCIS states that if an investor is guaranteed the right to eventual ownership or use of a particular asset, including a real estate interest, the value of the guaranteed ownership or use of such asset will be subtracted from the amount of the investor’s capital contribution in determining how much money was placed at risk. The draft memorandum also states a previously-stated, but rarely- used, position that the investor’s money may be held in escrow not only until approval of the I-526 petition, but also until the investor becomes a conditional permanent resident. Finally, the memorandum confirms that an investor can receive a return on his or her capital during or after the conditional residency period, so long as the return was not previously guaranteed and so long as the funds are not a return of the investor’s principal (but rather a return on principal; namely a profit).
The draft memorandum reiterates some helpful language from the previous draft memorandum regarding the so-called fund model of investments across a portfolio of businesses. In summary, USCIS states that the investment must be made into a single commercial enterprise, but that commercial enterprise can deploy the capital among various wholly owned subsidiaries (in the case of a direct EB-5) or unrelated entities (in the case of regional center EB-5s). Left unstated is the agency position on the extent to which a specific investor’s funds must be traced to a specific job-creating entity and the impact if one of several job-creating entities does not create sufficient jobs. Briefly, the following are other points of note in the draft policy memorandum:
- Converting a restaurant into a nightclub or adding substantial crop production to an existing livestock farm are cited as two examples of a restructuring or reorganization that would be sufficient to establish a new commercial enterprise.
- Where a new commercial enterprise has owners who are not seeking to enter the EB-5 program, the source of their capital must be derived by lawful means.
- The EB-5 investment can be used for non-job-creating purposes as long as it helps the new commercial enterprise create 10 jobs. Examples are purchasing land, obtaining licenses, staffing a hotel, etc. The memorandum also includes in this list of examples “paying financing costs to unrelated third parties.” It is not clear if this is meant to expand or liberalize the agency’s previous policy on using EB-5 funds to repay bridge financing.
- USCIS states: “In general, multiple EB-5 investors petitioning through different regional centers or on a standalone basis may not claim credit for the same specific new job.” This, of course, is not controversial. However, it is interesting to speculate whether this is meant to articulate an agency position that multiple regional centers can be used for the same project as long as there is no double counting of jobs.
- The draft memorandum references regional center amendments. It does not reference the need for an amendment to change industry code. Is this intentional? It does not clearly indicate whether a change in economic methodology requires an amendment (the Service has taken different positions on this at different times).
- Finally, the policy memorandum discusses the agency’s “deference” policy. Deference will be provided to a determination in an approved I-924 or I-526, but will not apply to a different project or the same project with material changes to the project plan.
In summary, there are some useful clarifications or expansions of previous policy in this third draft policy memorandum. Subject to clarifying or changing a small number of policy statements, the publication of the memorandum as a final policy document will be a step forward. The next step would be a separate policy memorandum covering many of the issues not covered in this draft, especially relating to I-924 and project adjudications.
For questions relating to this alert, please contact H. Ronald Klasko, Esq. at rklasko@klaskolaw.com. Visit our EB-5 Resource Center at www.eb5immigration.comfor the latest information.
For questions relating to this alert, please contact H. Ronald Klasko, Esq. at rklasko@klaskolaw.com. Visit our EB-5 Resource Center at www.eb5immigration.comfor the latest information.
Report from China: Maslink Group opens Nanjing office
Wednesday 27 February 2013
One of the leading EB-5 emigration agencies Maslink Group has opened Nanjing Branch in Nanjing, Jiangsu Province in the east coast, China. Nanjing is one of the largest cities in Yangtze River delta region. Maslink Group is headquartered in Beijing with 10 offices around China. It is one of the highly experienced EB-5 brokers in Chinese market. For more information about facilitating with EB-5 emigration brokers in Chinese investors market, contact us at 217-899-6661.
The Texas Urban Triangle Regional Center gets ready for Shanghai Summit
Tuesday 26 February 2013
The Texas Urban Triangle Regional Center (TUTRC) gets ready for the Invest in America 2013 (Shanghai) Summit and Exhibition. TUTRC is a Diamond Sponsorship to The Invest in America 2013 (Shanghai) Summit & Exhibition March 15-28, 2013. The 4-day conference and trade show is the largest EB-5 investment and business event outside the U.S.
The Texas Urban Triangle Regional Center provides an opportunity to foreign investors looking to obtain permanent residency through the EB-5 Visa Investment Program. The Texas Urban Triangle Regional Center connects foreign investors with reputable development projects in the Texas Triangle area: Dallas; Houston; and San Antonio, Texas.
The Texas Urban Triangle Regional Center provides an opportunity to foreign investors looking to obtain permanent residency through the EB-5 Visa Investment Program. The Texas Urban Triangle Regional Center connects foreign investors with reputable development projects in the Texas Triangle area: Dallas; Houston; and San Antonio, Texas.
SMART Investment & International Property Expo in Singapore
Monday 25 February 2013
SINGAPORE 16-17 March 2013 ●11am - 7pm
Sands Expo & Convention Center, Marina Bay Sands
SMART Investment & International Property Expo is a comprehensive two-day expo aimed at the experienced, new and potential investor. The expo will feature attractive properties from around the world from condominiums, villas, town houses, resort property to innercity apartments. The show will also offer the best consumer/retail level investment products and strategies including stocks, funds and other alternative investment opportunities. Log on http://www.smartexpos.com
EB-5 Retrogression for China Unlikely in 2013, According to Department of State
Update: The Shanghai Summit announces conference agenda
Report from China: direct EB-5 projects draw investor attention
Sunday 24 February 2013
Direct EB-5 projects are drawing more attention from Chinese investors as tenant occupancy and other issues with EB-5 regional center program are concerning investors. A number of Chinese emigration agencies (including Maslink Group and Wailian Group) have been marketing direct EB-5 projects that seek investment capital. It appears that more direct EB-5 opportunities are available now for Chinese investors, many of them are restaurants and name-brand franchise. Investors are particularly interested in well-established business brands. For more information about seeking capital for direct EB-5 projects, contact us today at 217-899-6661 or email at info@ArtisanBusinessGroup.com.
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| Hong Kong Supermarket a direct EB-5 investment opportunity |
Report from China: update your marketing strategies for EB-5 projects
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| Never Lose Your Focus! |
- What are your specific goals and expectations with the market and the emigration agents you work with?
- Is my project offering good enough to stand out and attract attention from both emigration agents and potential investors?
- How many emigration agents are there that would promote your project?
- How many investment subscriptions should be sold weekly or monthly in order to meet your goals?
- What are the specific demographics you should focus on, large cities or 2nd tier areas?
- What can you offer that will be a more attractive and safer deal to both emigration agents and potential investors?
- How is your project specifically marketed to emigration agents and investors?
- Do your emigration agents have enough resources to execute your project promotion effectively?
- What can you expect when your agents become slow and/or inactive and how do you react to the situation?
While these are general questions to consider in working in the investors market, it is ultimately your own responsibility to analyze and monitor the project promotion and sales. You shall never lose focus of your short term and long term goals and find ways that can actually put your project sales on fast track. To make your project offering to be sold and raise the needed capital in a much more cost efficient and effective way is your ultimate goal with EB-5 program.
Contact us today to learn how we can supercharge your capital raise process in China at 217-899-6661, email: info@ArtisanBusinessGroup.com, or join us at our Phoenix EB-5 Finance Seminar on March 5, 2013.
NES Financial sponsors EB-5 seminars in NYC and LA
Saturday 23 February 2013
(Source: NES Financial) NES Financial, the market leader in EB-5 escrow administration solutions is pleased to be a sponsor of the 2013 National EB-5 Finance Tour with Artisan Business Group and Greenburg Traurig.
The tour focuses on unique alternative financing opportunities for EB-5 projects and provides a great opportunity to gain EB-5 program insight. NES Financial will be discussing best practices in managing investor funds from the I-526 capital raise, through the I-829 approval stage and the benefits gained by all constituents including Regional Centers, Developers, Immigration Attorneys and Investors. In addition to sponsoring the NYC and Los Angeles events, representatives from NES Financial will be attending all tour events - Phoenix (March 5), New York City (April 10), Atlanta (April 30), Philadelphia (June 25), Denver (July 31), New York City (August 27), Los Angeles (September 26), and Miami (November 12).
NES Financial is a leading provider of technology-enabled services for the efficient administration of specialized financial transactions. Combining in-house financial and legal expertise with state of the art technology, NES Financial helps banks, Fortune 500 corporations, and EB-5 Regional Centers improve operational efficiency, lower costs, and improve profitability. Recognized by Inc. 500|5000 as one of the fastest-growing, private companies in America, NES Financial safely processed more than $85 billion last year and protects businesses from financial risk by delivering unmatched levels of transparency, fund security, and regulatory compliance. www.nesf.com
The tour focuses on unique alternative financing opportunities for EB-5 projects and provides a great opportunity to gain EB-5 program insight. NES Financial will be discussing best practices in managing investor funds from the I-526 capital raise, through the I-829 approval stage and the benefits gained by all constituents including Regional Centers, Developers, Immigration Attorneys and Investors. In addition to sponsoring the NYC and Los Angeles events, representatives from NES Financial will be attending all tour events - Phoenix (March 5), New York City (April 10), Atlanta (April 30), Philadelphia (June 25), Denver (July 31), New York City (August 27), Los Angeles (September 26), and Miami (November 12).
NES Financial is a leading provider of technology-enabled services for the efficient administration of specialized financial transactions. Combining in-house financial and legal expertise with state of the art technology, NES Financial helps banks, Fortune 500 corporations, and EB-5 Regional Centers improve operational efficiency, lower costs, and improve profitability. Recognized by Inc. 500|5000 as one of the fastest-growing, private companies in America, NES Financial safely processed more than $85 billion last year and protects businesses from financial risk by delivering unmatched levels of transparency, fund security, and regulatory compliance. www.nesf.com
Jeff Campion addresses the importance of EB-5 due diligence
Thursday 21 February 2013
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| Jeff Campion of Texas Urban Triangle RC at 2012 Shanghai Summit |
As a result of this recent SEC inquiry, it becomes abundantly clear that investors must be careful and perform due diligence on the documents that are received when making their investments into the projects. In fact a phone call to the flag hotels named in the offering in this case could have alerted possible investors as to an issue. At the same time, the other challenge is knowing what documents were actually provided to the investors in their native language or translated to ensure that the documents that were signed were substantially similar to the information the investors reviewed to make the investment. That is, the investor may have not read the information that was allegedly false because either (1) it wasn’t in the native language or (2) it wasn’t part of the information in the native language that was reviewed.
This only highlights the necessity for the investors to perform due diligence on even basic facts contained in the offering documents and the other materials received. While no one is immune from fraud, in this case it appears -- from the allegations in the SEC complaint -- that even a cursory due diligence would have at least given rise to caution regarding the investment.
(About the author: Mr. Campion practices immigration law, with a focus on the EB-5 Investor Program, and is CEO of Texas Urban Triangle Regional Center. Please see more information about Mr. Campion at http://www.eb5texastriangle.com.)
USCIS approves new EB-5 regional center in New York
Wednesday 20 February 2013
Congratulations to New York Federal Regional Center! USCIS approved the designation of New York Federal Regional Center on Feb 11, 2013. For more information about EB-5 regional center program, contact us at 217-899-6661.
Report from China: Beijing Exit Entry Services Association issues notice on the U.S. EB-5 risk prevention
Tuesday 19 February 2013
One of the leading emigration trade associations the Beijing Exit Entry Services Association issued a notice on the US EB-5 risk prevention as a result of the US SEC charges against an Illinois EB-5 regional Center in Chicago. The notice requires all member companies that promoted the alleged project to report investor details to the association and the Beijing Municipal Department of Public Security's Exit Entry Administration. The notice urges member companies to fully disclose risk factors when introducing EB-5 projects to clients. For more information about Chinese EB-5market, contact us info@ArtisanBusinessGroup.com.
Brian Su visits EB-5 projects in Miami
Monday 18 February 2013
Mr. Brian Su is invited to visit EB-5 projects in Miami area, meetings with local developers have been scheduled to discuss capital raise strategies in Chinese investors market. For more information about EB-5 program, contact us at 217-899-6661.
SLS Casino & Hotel project starts construction in Las Vegas
Sunday 17 February 2013
According to the WSL report, Los Angeles nightclub operator and hotelier Sam Nazarian is set this week to begin construction on a $415 million renovation of the old Sahara casino and hotel, which once entertained such guests as Sammy Davis Jr., Frank Sinatra and Dean Martin. See complete report at http://online.wsj.com/
The SLS Casino and Hotel project's $150 million EB-5 capital raise efforts are organized by American Dream Fund's Las Vegas Regional Center. Artisan Business Group served as a China market advisor to Las Vegas Regional Center on this project. For more information about EB-5 program, contact us today.
The SLS Casino and Hotel project's $150 million EB-5 capital raise efforts are organized by American Dream Fund's Las Vegas Regional Center. Artisan Business Group served as a China market advisor to Las Vegas Regional Center on this project. For more information about EB-5 program, contact us today.
CCTV reports SEC action against IRCTC
Saturday 16 February 2013
China's largest state owned TV network CCTV (China Central Television) reports SEC action against Intercontinental Regional Center Trust of Chicago. Chinese Consulate General Chicago Office also issued a warning statement to Chinese investors about the risks associated with EB-5 investment projects. Watch CCTV news clip at http://v.ku6.com/show/3nC6FnKe8T_ud6RxeUIJTg...html
To learn how Chinese emigration industry and investors respond to SEC investigation and its impact on the future EB-5 market in China, join Mr. Brian Su and other legal experts at our Phoenix Seminar March 5, please register your seat at http://phoenixeb5.eventbrite.com.
To learn how Chinese emigration industry and investors respond to SEC investigation and its impact on the future EB-5 market in China, join Mr. Brian Su and other legal experts at our Phoenix Seminar March 5, please register your seat at http://phoenixeb5.eventbrite.com.
USCIS approves new EB-5 regional centers in Oklahoma and Maryland
USCIS approves a new EB-5 regional center in Oklahoma on Feb. 13, 2013. Briight Partners Regional Center covers Cherokee, Creek, Delaware, Mayes, Osage, Rogers, Tulsa and Wagoner counties in Oklahoma. The industry categories include Other Electrical Equipment and Component Manufacturing and Nonresidential Building Construction. Congratulations to Briight Partners Regional Center! Artisan Business Group assisted Briight Partners in exploring investors market in China two years ago.
Washington Center for Foreign Investment, LLC is also recently designed by USCIS. The regional center covers Frederick, Montgomery, Carroll and Washington counties in Maryland; and Industry Categories are Multifamily Housing Construction, Commercial and Institutional Building Construction, Architectural, Engineering and Related Services, Lessors of Real Estate. For more about EB-5 regional center program, join us in Phoenix on March 5.
Washington Center for Foreign Investment, LLC is also recently designed by USCIS. The regional center covers Frederick, Montgomery, Carroll and Washington counties in Maryland; and Industry Categories are Multifamily Housing Construction, Commercial and Institutional Building Construction, Architectural, Engineering and Related Services, Lessors of Real Estate. For more about EB-5 regional center program, join us in Phoenix on March 5.
USCIS seeks comments on new policy memo
From: U.S. Citizenship and Immigration Services [mailto:uscis@public.govdelivery.com]
Sent: Thursday, February 14, 2013 4:23 PM
To: artisanbuinsess@yahoo.com
Subject: USCIS Public Engagement Division: EB-5 Policy Memorandum for Public Comment
Dear USCIS Stakeholders,
U.S. Citizenship and Immigration Services (USCIS) is continually focused on enhancing its administration of the EB-5 program. As part of our efforts we have undertaken an iterative policy development process which includes the posting of a draft EB-5 policy memorandum for public comment. We would like to thank stakeholders for providing comments on previously posted versions of the EB-5 memorandum.
Today USCIS is posting an updated EB-5 memorandum for your further review and comment. Your feedback is a vital part of the stakeholder collaborative process and is critical to informing the development of our policies. To comment on the updated EB-5 memorandum, visit the Draft Memoranda for Comment section of www.uscis.gov. Please send all comments on the draft memorandum to opefeedback@uscis.dhs.gov.(Final date for comments: Monday, April 1, 2013)
- PM-602-XXXX, EB-5 Adjudications Policy
We look forward to receiving your feedback.
Sincerely,
U.S. Citizenship and Immigration Services
Please do not reply to this message. See our Contact Us page for phone numbers and e-mail addresses.
Host your EB-5 project seminar at The Shanghai Summit
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| 2012 Shanghai Summit - Seminar |
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| 2012 Shanghai Summit - Project Seminar |
The Invest in America 2013 (Shanghai) Summit and Exhibition still have a few project seminar slots available. If you have not booked one, or would like to take on additional seminar slot, this would be the best opportunity for you to present projects or services to potential investors in a more professional and effective way in a seminar setting.
You can choose your seminar time slot from below, fill out Exhibitor Manual Form 4-Meeting Room Reservation and fax back to the Conference Coordinator Ms. Sherry Xu at the earliest. The Conference Room B2 has a 50 to 60 people sitting capacity.
03/15: 1:00pm to 1:50pm, conference room B2
03/16: 10:00am to 10:50am, conference room B1 and B2
03/17: 10:00am to 10:50am, conference room B1 and B2
Exhibitors only please. Please call conference coordinator Ms. Sherry Xu at Tel: (626) 280-0851.
USCIS approves new EB-5 regional center in New York
Friday 15 February 2013
USCIS approved another new EB-5 regional center in New York City on Feb. 5, 2013. Lam NYC EB-5 Fund Regional Center LLC is designated to cover the following counties: New York, Bronx, Kings, Queens, Westchester and Nassau. Approved industry category includes: traveler accommdation and nonresidential building construction. For more information about EB-5 program, contact us today.
Update on Wait Lines for Chinese EB-5 Investors-Is it Really Good News?
Thursday 14 February 2013
(By Bernard Wolfsdorf, Esq.) In our November 2012 blog, we discussed the consequences if a wait line developed for Chinese-born immigrants in the EB-5 Investor category. Our blog was based on a prediction in the official December 2012 U.S. Department of State Visa Bulletin, which contained an alert that a China cut-off date might be imposed at some point during the second half of the fiscal year (FY). That would be as early as April 2013. The update in the March 2013 Visa Bulletin, however, brings good news. It states: “Currently there is no reason to believe that it will be necessary to establish a China Employment Fifth preference category cut-off date during FY-2013, since demand over first six months of FY-2013 has now averaged out to a manageable level.”
How did this occur? It appears the massive disruption in adjudication caused by Tenant Occupancy issues slowed visa issuance, such that the wait line may not develop as early in the FY as previously predicted, but it could still happen July 1, 2013 when the fourth and final quarter of the FY begins. Mr. Oppenheim, the Department of State official who oversees the Visa Bulletin, has reported that his office was concerned that the EB-5 numbers for China were moving too fast, but as of late, they appear to be “liveable.” If the numbers and usage remain at the current levels, he does not expect a cut-off for China EB-5 at this time.
However, worldwide EB-5 visa issuance is up 75% compared with this time last year. We predict that as the Tenant Occupancy issues get resolved, we will see more approvals and the potential for a fourth quarter backlog remains high. Moreover, as most cases take at least 1 to 1 1/2 years to reach the green card appointment stage, most Chinese nationals filing cases now should expect to be affected by this looming wait line. Of course, Congress could tackle the issue in its overhaul of immigration laws and increase the quota, thereby alleviating the looming risk, yet another reason to support immigration reform.
How did this occur? It appears the massive disruption in adjudication caused by Tenant Occupancy issues slowed visa issuance, such that the wait line may not develop as early in the FY as previously predicted, but it could still happen July 1, 2013 when the fourth and final quarter of the FY begins. Mr. Oppenheim, the Department of State official who oversees the Visa Bulletin, has reported that his office was concerned that the EB-5 numbers for China were moving too fast, but as of late, they appear to be “liveable.” If the numbers and usage remain at the current levels, he does not expect a cut-off for China EB-5 at this time.
However, worldwide EB-5 visa issuance is up 75% compared with this time last year. We predict that as the Tenant Occupancy issues get resolved, we will see more approvals and the potential for a fourth quarter backlog remains high. Moreover, as most cases take at least 1 to 1 1/2 years to reach the green card appointment stage, most Chinese nationals filing cases now should expect to be affected by this looming wait line. Of course, Congress could tackle the issue in its overhaul of immigration laws and increase the quota, thereby alleviating the looming risk, yet another reason to support immigration reform.
The Shanghai Summit: 64 exhibition booths are sold out!
Wednesday 13 February 2013
All 64 exhibition booths are sold out! The Invest in America 2013 (Shanghai) Summit & Exhibition will be taking place at the Shanghai Exhibition Center March 15-18, 2013. The 4-day conference is the largest EB-5 trade show outside the US. More than 50 EB-5 regional centers, law firms, and other professional services from the US will be promoting their business opportunities to Chinese investors. For more information, please log on event website at http://www.InvestAmerica2013.org.
Brian Su visits TDI in Dallas
Brian Su visits TDI office in Dallas. TDI is a real estate investment firm formed to buy and build a portfolio of multifamily assets in select major U.S. markets. TDI currently manages a $1 billion portfolio of assets located throughout the U.S. Mr. Su also visited other Austin projects with Chinese emigration agent. Artisan Business Group is currently assisting TDI's EB-5 efforts in Chinese investors market. For more information about funding projects through EB-5 program, contact us today at 217-899-6661.
Report from China: SEC's action against IRCTC causes media attention
Tuesday 12 February 2013
The SEC's investigation and action against the Intercontinental Regional Center Trust of Chicago (IRCTC) has been widely reported by mainstream media and social media in China. News stories are spreaded overnight on major online media and Chinese newspapers. Chinese media also reached out to SEC for further comments. Though it is Chinese New Year holiday season, Chinese emigration brokers that promoted and marketed the Chicago project are panic and busy to remove the project information off their websites. Some are trying to reach US attorneys for assistance. Leading emigration service agency Worldway Group issued an official statement that the firm terminated its marketing agreement with IRCTC after a due diligence study last year and did not send any investors to the project. Because of holiday season, we do not know how Chinese investors are responding to the news, but certainly they would wonder when the investment capital will be returned back to them. It is expected that many emigration agencies will drop EB-5 program for good to avoid risk. To learn if your Chinese EB-5 broker/agent has involved in marketing IRCTC project, contact us today at info@ArtisanBusinessGroup.com.
SEC Freezes Assets and Brings Civil Charges against EB-5 Investor Visa Project
Monday 11 February 2013
(Source: corporatesecuritieslawblog.com by SheppardMullin) In the first SEC enforcement action of its kind, the SEC announced on February 8, 2013 that it had filed civil charges against, and received an emergency order to freeze assets of, the Intercontinental Regional Center Trust of Chicago, a designated Regional Center under the EB-5 Immigrant Investor Program administered by U.S. Citizenship and Immigration Services (USCIS), and the Regional Center’s principal. See full complaint here.
What is the EB-5 Immigrant Investor Program?
The Immigrant Investor Program, commonly known as EB-5, was created by Congress in 1990 to stimulate the U.S. economy through job creation and capital investment by foreign investors. Under the pilot immigration program, first enacted in 1992 and rolled out in 1993, certain EB-5 visas are set aside for investments in Regional Center projects. The pilot program is currently authorized until September of 2015. Foreign nationals investing the required funds who demonstrate creation of the requisite number of jobs will receive conditional permanent residency, or a conditional “green card,” in the United States for himself/herself, his/her spouse and all dependent, unmarried children under age 21.
Are EB-5 investments exempt from federal or state securities laws?
No. There is no EB-5 specific exemption to any U.S. securities laws. Despite the investor pool consisting entirely of foreign nationals, individuals and entities raising money in these offerings must comply with (or find an applicable exemption from) the Securities Act of 1933 and state “blue sky” laws concerning the offer and sale of securities, the broker-dealer registration requirements of the Securities Exchange Act of 1934, the Investment Advisers Act of 1940 and state equivalents, and the Investment Company Act of 1940, as well as all applicable foreign securities laws.
Who are the defendants in the SEC litigation?
Intercontinental Regional Center Trust of Chicago (Intercontinental) is a Regional Center that was designated by USCIS in June 2011. A Regional Center is an economic entity, public or private, which is involved with the promotion of economic growth, improved regional productivity, job creation and increased domestic capital investment. The other defendants are the special purpose fund that received the investors’ proceeds and the principal of Intercontinental, who is alleged to have directed all of the illegal activities and misappropriated investor funds to a personal account.
Intercontinental has been raising funds since late 2011 for a proposed hotel and convention center located close to Chicago’s O’Hare Airport. The special purpose fund offered 499 limited liability company membership interests for $500,000 each, plus a $41,500 administrative fee, and was one of the largest EB-5 projects in the history of the program. At the time of the SEC’s receipt of the emergency order, the fund had taken in $145 million of job-creating capital and over $11 million in administrative fees.
What are the SEC’s allegations?
The allegations relate to misrepresentations or omissions in the offering documents and in documents filed with USCIS in connection with the applications for conditional permanent residency. According to the complaint filed by the SEC in U.S. District Court for the Northern District of Illinois, the offering documents made numerous false claims, including the receipt of all necessary building permits, franchise agreements with several major hotel chains, the availability of a state-sponsored bond facility, the value of the underlying land, the financial potential for the project to provide a return to investors and the refundability of administrative fees if visa approvals were not granted. The SEC’s complaint also alleges that the sponsors provided falsified documents to USCIS in an attempt to secure conditional visa approvals for investors, which approvals were a precondition to release of each investor’s $500,000 investment to the issuer. Finally, the complaint alleges that more than $2.5 million of $11 million in administrative fees were directed to the principal’s personal bank account in Hong Kong and most of the balance spent rather than available for refund.
Why is this case important?
While there have been allegations of fraud around other regional center projects, this is the first EB-5 enforcement action filed by the SEC. Press reports from September 2012 indicate that an internal memorandum prepared by the USCIS noted that Regional Centers “are not even making good-faith attempts to conform their offering documents to basic securities regulations.” Press reports also indicate that the Department of Homeland Security’s Office of Inspector General has launched an investigation into fraud in the EB-5 program. The SEC notes in its press release for this action there was close coordination with USCIS in bringing the case. This case confirms that both the SEC and USCIS are paying attention to compliance with securities laws, and USCIS is now monitoring for securities law compliance in its review of visa applications.
Should I consider participating in the EB-5 program?
This case should not discourage anyone from considering or participating in the EB-5 program. Rather, it should be considered a strong message that these investments programs, like any other investment program, must comply with all applicable laws, including securities laws.
The EB-5 program is not right for every project that needs capital, but it can be very attractive for project sponsors, local communities and foreign investors alike.
If I am an investor considering an EB-5 investment, what can I do to better protect my investment and my ability to obtain U.S. permanent residence?
Due diligence is extremely important. Every investor should ensure he/she has an understanding, at a minimum, of the Regional Center, the investment opportunity and risks, the job counting methodology and projections, any aspects of the project that introduce risk into the visa process, and the background and experience of the project’s sponsor and the principals of the sponsor and the Regional Center. The SEC’s allegations in the Intercontinental case suggest a failure of due diligence, as many of the allegedly false representations in the offering documents could easily have been confirmed as questionable through the same simple investigation of verifiable facts that the SEC describes in its complaint. Effective due diligence usually requires hiring experienced professionals. Many overseas investors rely on intermediaries, such as finders and marketing firms, but many of these intermediaries have historically lacked the experience or incentive to perform effective due diligence. We speculate that in order to be competitive in the marketplace, some Regional Centers will begin facilitating verifiable due diligence for potential investors and their professionals.
What if I have further questions?
Sheppard Mullin has substantial experience representing Regional Centers, individual project sponsors and foreign nationals considering EB-5 investment. The firm has assembled an experienced interdisciplinary team to assist with all aspects of the EB-5 program. Key members of our team have two decades of experience in the EB-5 program. We have prepared FAQs on the EB-5 program available here. For any questions or for more information, please contact any of the members of our EB-5 team. John Tishler (858-720-8943, jtishler@sheppardmullin.com), Dawn Lurie (202-469-4963, dlurie@sheppardmullin.com) and Mahsa Aliaskari (310-228-2280, maliaskari@sheppardmullin.com) participated in drafting this posting.
What is the EB-5 Immigrant Investor Program?
The Immigrant Investor Program, commonly known as EB-5, was created by Congress in 1990 to stimulate the U.S. economy through job creation and capital investment by foreign investors. Under the pilot immigration program, first enacted in 1992 and rolled out in 1993, certain EB-5 visas are set aside for investments in Regional Center projects. The pilot program is currently authorized until September of 2015. Foreign nationals investing the required funds who demonstrate creation of the requisite number of jobs will receive conditional permanent residency, or a conditional “green card,” in the United States for himself/herself, his/her spouse and all dependent, unmarried children under age 21.
Are EB-5 investments exempt from federal or state securities laws?
No. There is no EB-5 specific exemption to any U.S. securities laws. Despite the investor pool consisting entirely of foreign nationals, individuals and entities raising money in these offerings must comply with (or find an applicable exemption from) the Securities Act of 1933 and state “blue sky” laws concerning the offer and sale of securities, the broker-dealer registration requirements of the Securities Exchange Act of 1934, the Investment Advisers Act of 1940 and state equivalents, and the Investment Company Act of 1940, as well as all applicable foreign securities laws.
Who are the defendants in the SEC litigation?
Intercontinental Regional Center Trust of Chicago (Intercontinental) is a Regional Center that was designated by USCIS in June 2011. A Regional Center is an economic entity, public or private, which is involved with the promotion of economic growth, improved regional productivity, job creation and increased domestic capital investment. The other defendants are the special purpose fund that received the investors’ proceeds and the principal of Intercontinental, who is alleged to have directed all of the illegal activities and misappropriated investor funds to a personal account.
Intercontinental has been raising funds since late 2011 for a proposed hotel and convention center located close to Chicago’s O’Hare Airport. The special purpose fund offered 499 limited liability company membership interests for $500,000 each, plus a $41,500 administrative fee, and was one of the largest EB-5 projects in the history of the program. At the time of the SEC’s receipt of the emergency order, the fund had taken in $145 million of job-creating capital and over $11 million in administrative fees.
What are the SEC’s allegations?
The allegations relate to misrepresentations or omissions in the offering documents and in documents filed with USCIS in connection with the applications for conditional permanent residency. According to the complaint filed by the SEC in U.S. District Court for the Northern District of Illinois, the offering documents made numerous false claims, including the receipt of all necessary building permits, franchise agreements with several major hotel chains, the availability of a state-sponsored bond facility, the value of the underlying land, the financial potential for the project to provide a return to investors and the refundability of administrative fees if visa approvals were not granted. The SEC’s complaint also alleges that the sponsors provided falsified documents to USCIS in an attempt to secure conditional visa approvals for investors, which approvals were a precondition to release of each investor’s $500,000 investment to the issuer. Finally, the complaint alleges that more than $2.5 million of $11 million in administrative fees were directed to the principal’s personal bank account in Hong Kong and most of the balance spent rather than available for refund.
Why is this case important?
While there have been allegations of fraud around other regional center projects, this is the first EB-5 enforcement action filed by the SEC. Press reports from September 2012 indicate that an internal memorandum prepared by the USCIS noted that Regional Centers “are not even making good-faith attempts to conform their offering documents to basic securities regulations.” Press reports also indicate that the Department of Homeland Security’s Office of Inspector General has launched an investigation into fraud in the EB-5 program. The SEC notes in its press release for this action there was close coordination with USCIS in bringing the case. This case confirms that both the SEC and USCIS are paying attention to compliance with securities laws, and USCIS is now monitoring for securities law compliance in its review of visa applications.
Should I consider participating in the EB-5 program?
This case should not discourage anyone from considering or participating in the EB-5 program. Rather, it should be considered a strong message that these investments programs, like any other investment program, must comply with all applicable laws, including securities laws.
The EB-5 program is not right for every project that needs capital, but it can be very attractive for project sponsors, local communities and foreign investors alike.
If I am an investor considering an EB-5 investment, what can I do to better protect my investment and my ability to obtain U.S. permanent residence?
Due diligence is extremely important. Every investor should ensure he/she has an understanding, at a minimum, of the Regional Center, the investment opportunity and risks, the job counting methodology and projections, any aspects of the project that introduce risk into the visa process, and the background and experience of the project’s sponsor and the principals of the sponsor and the Regional Center. The SEC’s allegations in the Intercontinental case suggest a failure of due diligence, as many of the allegedly false representations in the offering documents could easily have been confirmed as questionable through the same simple investigation of verifiable facts that the SEC describes in its complaint. Effective due diligence usually requires hiring experienced professionals. Many overseas investors rely on intermediaries, such as finders and marketing firms, but many of these intermediaries have historically lacked the experience or incentive to perform effective due diligence. We speculate that in order to be competitive in the marketplace, some Regional Centers will begin facilitating verifiable due diligence for potential investors and their professionals.
What if I have further questions?
Sheppard Mullin has substantial experience representing Regional Centers, individual project sponsors and foreign nationals considering EB-5 investment. The firm has assembled an experienced interdisciplinary team to assist with all aspects of the EB-5 program. Key members of our team have two decades of experience in the EB-5 program. We have prepared FAQs on the EB-5 program available here. For any questions or for more information, please contact any of the members of our EB-5 team. John Tishler (858-720-8943, jtishler@sheppardmullin.com), Dawn Lurie (202-469-4963, dlurie@sheppardmullin.com) and Mahsa Aliaskari (310-228-2280, maliaskari@sheppardmullin.com) participated in drafting this posting.
Tips for Shanghai Summit exhibitors
Sunday 10 February 2013
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| 2012 Shanghai Summit |
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| 2012 Shanghai Summit |
1) Prepare a good solid 5 minutes project marketing video with Chinese subtitles
2) Book your own seminar slots so that you can deliver your project presentation directly to interested audiences
3) Print enough copies of your Chinese-version marketing brochures, flyers, and business cards
4) Have one or two bi-lingual booth assistants to greet your visitors
5) Make good eye-catching posters and/banners for your booth
6) Offer a raffle event to draw attention and audiences
7) Collect business cards and contact information from your visitors
8) Set up private appointments with interested parties for further discussions
9) If you bring show materials with you, ship along with your luggage to avoid any possible delay
10) Consider to host a small evening reception for potential investors and emigration brokers
11) Finally make sure your passport and Visa are in place prior to the trip
For more information about the 4-day Shanghai Summit and Exhibition, please log on http://www.InvestAmerica2013.org or call us at 217-899-6661. Artisan Business Group, Inc., is an Exclusive Promoter for the Summit events, we have an exhibition booth #C019, you are welcome to come by and meet with Mr. Brian Su and our team members Tyler McKay and Melody Chen. For a private meeting with Mr. Su in Shanghai during the Summit, please book in advance at http://shanghaisummit.eventbrite.com
The Summit Event Platinum Sponsors: Fragomen, GreenTech Auto; Diamond Sponsors: USA Continental Regional Center, Texas Urban Triangle Regional Center; Gold Sponsors: Georgia Regional Center, Green Card Fund, US Holdings Regional Center.
SEC Halts $150 Million Investment Scheme to Dupe Foreign Investors and Exploit Immigration Program
Friday 8 February 2013
(Source: SEC.GOV) Washington, D.C., Feb. 8, 2013 — The Securities and Exchange Commission today announced charges and an asset freeze against an individual living in Illinois and two companies behind an investment scheme defrauding foreign investors seeking profitable returns and a legal path to U.S. residency through a federal visa program. To see the complete news release, log on http://www.sec.gov
2013 Year of the Snake promises a steady EB-5 market
Thursday 7 February 2013
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| Happy New Year! |
Vermont Governor Shumlin travels to Florida to court EB-5 investors
(Source: vtdigger.org) Gov. Peter Shumlin will travel to Miami on Thursday and Friday to encourage investment in the state’s Northeast Kingdom via the EB-5 visa investment program, accompanied by Jay Peak Resort president and co-owner Bill Stenger. Shumlin and Stenger will be pitching an elaborate set of projects to scores of immigration attorneys and wealthy investors, with many foreign investors from Central America and South America, according to Stenger. See full report http://vtdigger.org
2013 EB-5 Dealmakers Conference sponsorship program is now available
After successfully hosting Boston Dealmakers Conference 2011 and New York City Dealmakers Conference 2012, Artisan Business Group will be hosting the 3rd Annual 2013 EB-5 Investment Summit: Dealmakers Conference at Hilton Long Beach Hotel and Executive Meeting Center in Los Angelese area May 30, 2013. The one day event will feature top-tier experts to cover every practical aspect of EB-5 legal, securities, RC and Direct EB-5 capital raise, RC management and operation, EB-5 marketing and due diligence issues. For event sponsorship program, please contact Tyler McKay at 217-899-6661 or email at info@ArtisanBusinessGroup.com.
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