Tuesday, June 29, 2010

Bona Fide and “EB-5ed”: The Impetus for a Genuine Job Recovery

Information on the wonders and blessings of EB-5 Immigrant
Investor Regional Centers and their positive impact on local economies abounds
online…in the websites of said Regional Centers.  Unfortunately, the tale of the EB5 tape tells
a different story in many cases. 
Statistically speaking, there are a handful of EB-5 Regional Centers
which can lay claim to meaningful job creation and financial impact numbers,
and even the impressive figures cited by industry proponents rely largely upon
these big players.  The rest of them,
well…not much going on except the marketing.

If we take off our immigration attorney hats, however, there
is a bigger picture here, and one more directly relevant for the manifestation
of the job creation purposes envisioned 
by Congress when it introduced the EB-5 Immigrant Investor visa in its
first incarnation via the Immigration Act of 1990 (IMMACT90).  You see – and this will come as a bit of a
shock to many developers and attorneys – the original purpose of the EB-5 visa
was to create long term jobs via foreign
  It wasn’t, as it seems
so often today, for the purpose of giving developers a new, low-cost source of
capital in the wake of  a devastated
financial sector, nor was it to generate that latest and most profitable of immigration
sub-specialties, EB-5 Regional Center Formation, which is making many of us grin ear-to-ear. 

Nope, it wasn’t about those of us on this end who directly
benefit from what these foreign investors pump into the U.S. economy via EB-5
Regional Center investments.  It’s
about the jobs.
 And when we, as attorneys, fail to keep that
in mind, we are committing a TRIPLE disservice:

  • We are failing to provide our Regional Center
    clients with all of the tools they need to establish more successful project;

  • We are letting our EB-5 investors to
    participate in projects which are neither properly hedged nor sufficiently “invested”
    in a public purpose and, worst of all...

  • We are not playing the role we can play in maximizing the job-generation
    objectives envisioned by our Congress, signed into law by our President, and so absolutely crucial for today's U.S. economy.

I am talking about the fact that in the great toolbox provided by our
local, state, and federal government to stimulate the creation of U.S. jobs
during a faltering economy, the EB-5 Regional Center program is but one tool,
and we, as attorneys, have a responsibility to our clients – be they individual
EB-5 investors, Regional Centers -- or both (as is, to my continuing
discomfort, the case with so many in my profession) to provide our clients with
as many tools as possible to protect their interests.  It is a fact that most Regional Centers
situated in Targeted Employment Areas (TEAs) – the only Regional Centers offering a $500,000  investment threshold and actually securing
investors today – sit within geographic locations which are targeted in
numerous other was by government…and, IMHO, it IS the job of the immigration
attorney – no matter how much you might take offense – to look beyond the EB-5 issues and educate
clients on the basics of these other resources, the deployment of which can
mean the difference between a successful EB-5 project and another botch job
leaving EB-5 investors hanging at the I-829 stage.

So what are these other tools?  Well, for example, there are New Market Tax Credits.  There are federally-designated impact zones,
created by oil spills and hurricanes and other messes.  There are HUB zone designation.  There are job credits funded by municipal and county governments.  There are federal matching funds for
infrastructure related projects.  Then of course there
are President Obama’s billions set aside as “stimulus spending”, sitting there,
waiting to be tapped.  A TEA-based EB-5
Regional Center which does not explore these opportunities but chooses instead
to rely wholly upon EB-5 investors for capitalization has a fool for a General

Note that I am NOT suggesting that we, as immigration
counsel, need to be well-verse or even marginally familiar with all this stuff.   That's what the other experts are for.  (It seems to me, frankly, that most attorneys filing I-526s don't know the difference between an IMPLAN and an implant; lack of expertise has rarely troubled some in my profession.)   But there are municipal law attorneys, bond experts, grant finders as well as the
pricey expert offices of the leading national law and accounting firms.  THESE are the folks who put these deals together…but only if we get our developer client to
the point of inquiry.  Then and only then
are we making sure that our EB-5 Regional Center clients are forging new
methods of strengthening the fiscal integrity of their project, insuring that our
EB-5 investor clients are getting financially involved in a collective pool of
source funds which is both diversified and government-driven, and, last but
most importantly, doing everything we can to create the jobs America needs.


Thursday, June 10, 2010

Better Get that EB-5 Regional Center Application in ASAP...

The Wall Street Journal reported this morning that USCIS Director
Alejandro Mayorkas is the person who behind the new proposed fee increases,
which would take effect this summer after a public comment period.  Across the board, they raise the cost of
filing petitions for permanent and temporary residency for foreign
professionals and entrepreneurs by an average of 10%.

The most commonly filed petition, which is used by US
citizens and permanent residents to petition for relatives outside of the
country, will go up from $355-$420, an 18% increase.  The WSJ opined that an increase of $65 is
unlikely to affect the filing of family petitions, and I agree.  The cost of applying for US citizenship --
form N 400 -- will remain at $675, since the fee went up three years ago to the
tune of 69%.

Once again, it is the business visas, which will bear the
brunt of the fee increases.  H1B, L, and O
visa applicants, him on others, will see the filing fees rise slightly.  The filing fee increase for employment-based
permanent residency will go up only slightly, according to the article.  More relevant to those of us involved in
investment-based immigration are the proposed fee changes affecting EB 5 immigrant
investors.  The filing of an eye 526 is
proposed to go up to $1500 from $1435, not a big deal.  But the I829 filing two years later, which
makes the investors conditional residency permit, will rise from $2850 to $3750.

But I saved the headline for the end: currently, there is no
filing fee paid in connection with the submission over regional center
application.  If the fee increase is
approved, new EB-5 service centers seeking
certification will be paying a filing fees of $6230 for the privilege of having
their regional center proposal considered. 
Better get those RC apps in sooner than later, eh?  I know a few guys besides myself who suddenly
have a very, VERY busy summer ahead to beat the proposed new fee!

Given the fact that the number of Regional Centers filed and
approved in 2009 more than doubled the total approved in the prior 15 years,
and given the fact that, as far as I can tell, the majority of them are  essentially “shelf companies” filed by
attorneys or entrepreneurs who have done little or nothing to move forth with
an actual investment project,  I can
certainly understand why USCIS would want to add a filing fee…but $6230??   Seems pretty steep to me. I assume the number
is based upon some sort of handling estimates; it certainly will not discourage
a legitimate Regional Center filing, which rarely costs under $100,000 by the
time the attorneys, economists, and accountants are done.

But blaming the proposed fee increases on decreased demand
for US immigration, we are once again reminded that only the government can
conclude that the way to increased demand is to raise the cost.

Wednesday, June 9, 2010

Get Yer Red Hot EB-5 Investor Visas While They're Still (Comparatively) Cheap...

...because apparently the USCIS is planning on creating a new $6,230 filing fee!  Yikes!

I did a quick online search and didn't find anything but here is the Miami Herald Article re Proposed Investor VIsa Fee

Life on the Border: Another Tragic and Needless Death in Juarez, Mexico

When I arrived in Ciudad Juarez, Mexico, in 1987 as a first
tour Foreign Service Officer, the place at which I arrived was very different
than the war zone I visited this past December. 
Ciudad Juarez was already a dusty, dirty and crowded desert town and
occasional crimes made the headlines: young women who would disappear only to
be found buried in the surrounding desert; tourists would be regularly robbed
at gunpoint; and, of course, the drug crime was in its comparatively nascent
stage (compared to today.)  I got to ride
with the Federales on several big busts, including one we got to by helicopter,
which featured all the elements of a good Tarantino script:  a desert airstrip, an abandoned farmhouse,
and a ton of cocaine bricks. 

Still, Juarez was a sort-of livable place.  We made good friends, we ate good food…we
drank lots of Corona and good tequila. 
The lunchtime chile relleno
burritos served at “El Choque” (the only combined body shop/ burro stand I’ve
ever seen) were breathtaking.  Leah and I
could even go out for an occasional drink in the seedy downtown district,
dodging the roving gaggles of happy drunken American teenagers out for a benign
evening of misadventure south of the border. And although the neighborhood we lived
in, San Marcos, was nicknamed “San Narcos” (based upon the many discreet drug
traffickers who resided therein), it was a safe neighborhood and the peach tree
exploded with fruit and it was where Alex spent the months of his life and,
well…things were alright.

My first days at the consulate were filled with organizing
my personal matters and getting settled into the townhouse provided to me.  Jesus – nicknamed ”Chuey”, as most Jesuses
are in Mexico -- was a longtime local FSN ("Foreign Service
National") who had been with the consulate many years.  He drove me around and generally helped us
get settled in.  A few days after our
arrival, I needed to travel across the border to El Paso to complete some
paperwork.  Chuey and I were running
errands on the Mexican side one day and I told him of my need to cross in to El
Paso.  His response was that he could not
take me because he did not have a visa.

Needless to say, I was astonished: how is it possible for a
long time consulate employee to not have a visa to cross in and out of the United
States?  I will never forget his reply:

”Señor José, I've been going back
and forth by climbing the fence at the border since I was six years old... why
on earth would I need a visa?"

Times have changed and changed a lot.  I got him his visa, and he was very proud of
it (why, I'm not so sure.)  His days of
fence-jumping behind him, Chuey became a lawful border crosser.

Sergio Adrian Fernandez was not so lucky this past Monday
night.  The 15-year-old was just outside
of the Santa Fe Bridge connecting El Paso to Ciudad Juárez when he was shot
dead by a US border agent.  According to
the Border Patrol, Sergio was with the group "of suspected illegal aliens
being smuggled into the US from Mexico." 
In reality, it appears that Sergio was simply being a foolish teenager,
and, with a group of friends, was playing a far more dangerous version of the
border crosser "Cat and mouse" game played by Chuey for so many years.  Witnesses told reporters that while other
teenagers had thrown rocks at the border agents, Sergio had not.  According to Raul Flores, who was quoted by
the media, young Sergio stepped out from behind a pillar on the Mexican side of
the border with his hands in the air and the agent in teenager "had 4
seconds to look at each other" before the young man was shot, in the
shoulder and then in the head.

Once again, the tensions are ratcheted up between the United
States and Mexico and once again, another young man is dead.

Tuesday, June 8, 2010

“Y entonces que esperas??”- Editorial/Comentario EB5 Por Abogado Jose Latour

Comenzando mi
segundo año concentrando en la visa EB5, hay una estadística que se destaca
entre las muchas asociadas con el programa de visa de inversor: la escasez de
latinoamericanos que se comprometen a participar en lo que probablemente es la
mejor oportunidad para realizar residencia norteamericana vía la inversión.  Dado que soy hispano, y dado que mi
castellano sumamente imperfecto aún suele ser entendido y bien recibido en
Latinoamérica, ha sido lógico enfocar en los países que hablan nuestro idioma.
Sin embargo, la cantidad de latinos que expresan gran interés en la visa EB5
consistentemente se materializa en un porcentaje muy pequeño de personas que
llegan a invertir en dicha visa…porque?


Como la tarea mía
es en presentar las mejores oportunidades EB5 en las conferencias y reuniones
privadas que desempeño en países como Venezuela, México, Brasil, etc., decidí
tratar de entender el “porqué”. Comparados a otras nacionalidades, el
porcentaje de latinos que van de inversor prospectivo a inversor EB5 en camino
a la residencia permanente norteamericana es minúsculo.  Mi colega, Steven Yale-Loehr, probablemente
el abogado más destacado en tema de la visa EB5, comentó lo siguiente en una
entrevista con un periódico de Washington: “la gran parte de los inversores [de
la visa EB-5] vienen de Europa, Canadá, Corea, y China. Por razones
inexplicadas, no he visto muchos inversores de Latinoamérica o del Medio Este.”
 Estoy 100% de acuerdo con Steven.


En el año 2005 la
oficina de contabilidad central del gobierno norteamericano (”GAO”) publicó un
estudio cual examinaba las estadísticas de la visa EB5. Basado en los números
históricos que tenían en ese momento:

-6024 visas fueron otorgadas para la
categoría EB5 (incluyendo el inversor y su familia) desde el año 1992 a la
fecha de publicación

-en junio 2004, 653 inversores (no incluyendo sus
dependientes) habían logrado aprobación de la petición I-829, cual convierte la
residencia condicional ya en residencia permanente.

-Aproximadamente el 83% de inversores y sus dependientes son de Asia,
principalmente de Taiwán, Corea del Sur, y la China.


(Estos datos,
obviamente, ya están un poco viejos; el reporte se puede ver aquí:
http://www.gao.gov/htext/d05256.html .)


Ahora, matemática básica:


De acuerdo a las
estadísticas que encontré, la China tiene una población de 1,337,810,000, Corea
del Sur  49,773,145, y Taiwán tiene 23
millones de habitantes.
Eso es un total de 1,410,583,145.  De acuerdo al reloj de población mundial (“U.S.
Census World Population Clock”), la población total del mundo es 6,824,402,177. Eso
significa que la población de los tres
países que han utilizado el 83% de las visas EB5 representan el 20.
6% de la población mundial.


Siguiendo nuestra
examinación, facturamos los números de la población pobre del mundo.  El Banco Mundial (“World Bank”) calculó en el
2008 que 1.4 mil millones de personas viven en pobreza, basado en un índice equivalente
a U.S. $1.25 por día.  Agregando ese
número de habitantes a los tres países mencionados anteriormente, suman a representar el 41% de la población
.  Próximo, examinando las estadísticas
económicas,  inmediatamente podemos
descontar un porcentaje parecido a ese 1.4 mil millones para identificar las
personas que no viven en pobreza absoluta pero que no tienen los recursos para
invertir medio millón de dólares. Lo que nos queda - el número de participantes
que técnicamente calificarían para la visa EB5 -- es minúsculo, y
principalmente ubicado en Europa, Canadá, y Australia.


Y porque tan poca
inversión EB-5 de países latinos? Yo tengo mis teorías y entre ellas cuento el
progreso económico de China y los tigres de Asia, cuales han desarrollado una
clase media a una velocidad dramática, simultáneamente reduciendo la pobreza.
También observo que estos tres países tienen memorias claras de represión
política y tanto Taiwán como Corea del Sur están dolorosamente atentos a las
amenazas de sus vecinos a un nivel más inmediato que los que sufrimos en esta
parte del mundo. (Consideren el contraste entre esos países y, por ejemplo, India
y Brasil; sin duda el progreso económico de India y Brasil ha sido
extraordinario…pero el beneficio no se ha transformado en beneficio directo
para las poblaciones pobres ni los ha llevado a un nivel socioeconómico más
favorable… por lo menos hasta ahora.)


Con mis mexicanos
y mis venezolanos llamando a diario y expresando sus preocupaciones y sus
deseos de definir un ”Plan B”, los campos de la EB5 definitivamente parecen ser
fértiles. Sin embargo, al colgar, me quedo pensando:  “Y entonces que esperas??”  A la hora de hacer la decisión y poner su
inversión en la cuenta de fideicomiso y el futuro de su familia en las manos
del centro regional EB5 que representa a la vía a la residencia permanente
norteamericana, el “Plan B” suele ser archivado para otro día. En contraste,
docenas de inversores se comprometen semanalmente a la visa EB-5 en la Asia del
este,  cada uno con su vista claramente enfocada
en el futuro que desean en los Estados Unidos.


A lo mejor
podemos aprender algo de los Chinos este respecto,  igual que en tantos otros.