Phoenix EB-5 Seminar draws great attention

The 2013 National EB-5 Finance Seminar Tour with Greenberg Traurig was a great success in Phoenix Arizona today. Top securities and immigration attorneys Mr. Steve Anapoell, Ms. Jennifer Hermansky and Ms. Ali Brodie of Greenberg Traurig discussed the latest developments in EB-5 industry. Guest speakers included Mr. Jeff Carr of EPR, Mr. David Appel of Marcum LLP and Mr. Thom Casebolt of the EB-5 Resource Center. Mr. Brian Su of Artisan Business Group updated audiences about the current Chinese investors market and market entry strategies for new EB-5 regional centers. The one day informative session attracted over 30 EB-5 regional center executives, attorneys, project developers from Arizona, California, Washington, Georgia, Colorado, Florida and Nevada. For upcoming 4th National EB-5 Boot Camp in New York City April 10, register your seat now at http://nyceb5.eventbrite.com.

Hurry up! register Phoenix EB-5 Finance Seminar

See you in New York City at our Boot Camp April 10

Mr. Brian Su will be visiting Phoenix today to host The 2013 National EB-5 Finance Seminar Tour with Greenberg Traurig  March 5, 2013.  Top securities and compliance attorneys Mr. Steve Anapoell and Ms. Laura Reiff of Greenberg Traurig will discuss the latest EB-5 oversight and investigations conducted by SEC. Guest speakers include Mr. Jeff Carr of EPR, Mr. David Appel of Marcum LLP, Mr. Thom Casebolt of the EB-5 Resource Center. Mr. Brian Su of Artisan Business Group will discuss potential implications of SEC oversight in the Chinese emigration and investors market where generates 80% of EB-5 investors. The one day session will cover every aspect of EB-5 investment business. Sold Out!

Five Key Issues of Importance in Preparing EB-5 Source of Funds for Vietnamese Investors

(Author: Ali Brodie, Greenberg Traurig) Ali Brodie is an EB-5 attorney who practices with the Denver office of Greenberg Traurig, LLP. Attorney Brodie concentrates her practice on worldwide business immigration and employer immigration compliance law.

Currency Restrictions

Vietnamese laws regulate the export of Vietnamese currency abroad.  The primary purpose of the “Ordinance on Foreign Exchange Controls” is to secure the Vietnamese Dong as the country’s primary currency.  This makes it difficult for investors residing in Vietnam to transfer funds to the United States to EB-5 investment accounts.  To facilitate their EB-5 investment Vietnamese investors typically use a credit institution to transfer currency abroad.  In the EB-5 petition, the investor must provide evidence of each deposit and transfer to the credit institution, along with an affidavit from the credit institution to show the trace of funds originating with the investor, through the credit institution, out of Vietnam and into the United States based EB-5 investment.

Taxes on Individuals

USCIS often sends RFEs for lack of five years of tax returns.  In Vietnam, tax on employment income is paid directly by the employer and filed by them with the government.  For non-employment income, such as income resulting from investment, sale of property, etc, the individual is required to pay personal income tax in relation to each type of taxable non-employment income (essentially, each time income is received).  Individuals are taxed on real property and the investor must provide proof of payment of taxes in purchase and/or sale of property, and taxes during duration of ownership.

Gifts of Real Property

Many Vietnamese investors receive land and homes as gifts from family and friends.  In such cases, aside from the contract gifting the land, the investor must show the giftor’s original ownership of the land.  Without the evidence of the giftor’s original ownership of the land or home, USCIS cannot confirm that the giftor was legally able to gift the property.  

Currency

The official currency is Vietnam Dong (VND).  However, many investors maintain funds in taels of Saigon Jewelry Company (“SJC”) gold.  The banks in Vietnam did not accept gold deposits until recent years.  Therefore, many investors kept the gold funds at home, until banking regulations changed allowing them to deposit the taels in banks some years later.  In these instances, it is important to provide evidence to account for any gaps in the trace of funds.

Source of Funds Relating to Shares of Company or Company Profit Distribution

Specific evidence must be provided for investors who own shares in a company and wish to cash out shares, or a company that will make a profit distribution where the investor is an owner.  For the EB-5 petition, the investor will need to show documentation reflecting acquisition of shares and their ownership, bank statements showing movement of funds,  annual reports showing earnings and company ownership.  If the sale of stock is subject to tax liability, the investor must provide proof of payment of applicable taxes related to the same.  If the funds result from a profit distribution, the investor must provide documentation concerning the company decision to make a profit distribution, evidence of the investor’s receipt of funds, and proof of payment of applicable taxes related to profit distribution.

Shanghai Summit Organizing Committee notice to exhibitors

The Invest in America Shanghai Summit Organizing Committee requests all exhibition participants to comply with US and Chinese regulations, especially US Securities laws and USCIS regulations. Pending RCs should fully disclose its current status. If you are not familiar with the regulations, you are suggested to consult with your attorney.

Ron Klasko: Lessons from the SEC Enforcement Action

(Author: H. Ronald Klasko) Everyone in the EB-5 world is aware of the complaint filed by the SEC against a Chicago regional center and its principal.  I would like to share some perspectives. Let me first state that I’m fully aware that a complaint involves allegations and accusations that may or may not be true. Whether true or not, the complaint has created shock waves on an international basis.  It is front page headlines in China.  What are its impacts? 

In my opinion, there could be some positive impacts.  EB-5 will thrive only if good projects are made available by developers acting in good faith.  If there are enough negative headlines, the entire program could die.  Hopefully, the complaint will serve as a warning signal to stave off developers looking to lure foreign investors into untenable (or worse) investments through the EB-5 program.  Developers should be more concerned if the allegations had been more nuanced.  If the allegations are true, this developer engaged in outright theft of funds and blatant fraud.  There is nothing borderline about these charges. 

However, I am very concerned whether these headlines, and others like it, could result in the Chinese Government taking action to prevent the outflow of funds to the U.S. for Chinese EB-5 investors.  Certainly, this will be yet another reminder to Chinese agents to be cautious and perform extra due diligence before encouraging investors to invest in a particular project.  For investors, this is clearly a warning to retain a financial professional to research an investment project before investing.  Investors need to understand the use that will be made of their money, what has to happen for the project to go forward, what milestones must be reached for the jobs to be created and whether the developers’ assumptions on which job creation projection is based make sense.  The good news is that the watchdog agency did its job, stepping in quickly enough to preserve the investors’ capital before it was disbursed.  However, investors and their representatives may insist on increased internal control mechanisms to enhance the safety of their investments, consistent with the legal requirement that the investment be at risk. 

From the lawyer’s point of view, it is another wake up call to be diligent regarding review of projects in which his or her investor clients choose to invest or projects which he or she will be representing before USCIS.  To a great extent, the attorney is unable to go behind the documents to ascertain definitively whether the documents or information provided are true or not.  However, certain warning signs may exist. 

In my capacity as Chair of the Best Practices Committee of IIUSA, I have been working with industry leaders in developing best practices for regional centers, project developers and others involved in the EB-5 industry.  This development adds even further importance and urgency to this effort.  We plan to release the results of our deliberations in June. 

The EB-5 program clearly does not need any further negative publicity.  Everybody involved in the program – from project developers to regional centers to immigration attorneys to securities attorneys to economists to business plan writers to migration agents to escrow agents – have an important role to play in making certain that the EB-5 program thrives and meets the estimable goals that Congress had in mind when it created the program. 

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.

China's billionaires on rise

(Source: China Daily) China has had more billionaires created by its stock markets this year than in the United States - 212 compared with 211 - a new survey revealed on Thursday. According to the latest Hurun Global Rich List 2013, there were 1,453 people in the world with personal wealth of $1 billion or more at the end of January. Another significant sign of more wealth being created in the East came with figures showing Asia was home to the highest number of billionaires, with 608, followed by 440 from North America and 324 from Europe, said Hurun researchers. Among individual countries, the US and the Greater China area dominated with 408 and 357 respectively, followed by Russia, Germany and India. Between them, the US and China now have half of all billionaires on the planet. Moscow, with 76 billionaires, is the billionaire capital of the world, followed by New York, Hong Kong, Beijing and London, according to the report. See the complete report at http://www.chinadaily.com.cn

China Central Television reports EB-5 scandal and risk

China Central Television (CCTV Chanel 2 Finance Channel) have reported EB-5 scandal and risk last two days. The SEC recent oversight and investigation have caused major media attention in China. Watch CCTV clips at http://www.tudou.com/programs/view/SZj0OzTf584/ and http://video.sina.com.cn/v/b/98251394-1298170372.html

To learn more about the latest developments in Chinese EB-5 market, join us in Phoenix EB-5 Seminar March 5, register now at http://phoenixeb5.eventbrite.com/

To learn more about the upcoming events in China, sign on a free membership with The EB-5 China Market Council.