Monday, February 22, 2010

Impatience with Priority Date Delays

If there is a single issue (besides the daily barrage of EB-5 inquiries) about which folks have been emailing me the past few weeks , it is definitely the Priority Date situation.  F-1 students, in particular, have evolved from the standard concerns about the transition from OPT to H-1B status (although, in this economy, even THAT is proving difficult) to long-range "when on earth will I ever get my green card?"

With Obama's promised Comprehensive Immigration Reform (CIR) an increasingly distant possibility, transition from temporary status in the U.S. - as a student OR as a professional worker -- to U.S. permanent residency via employment is increasingly nebulous.

What really bugs me, however, is the soothing chant I keep hearing from others in my profession:

"RELAX, you can stay in H-1B status as long as necessary provided you start your PERM process prior to your fifth year in that status." 

That is of little comfort, and TOTALLY unrealistic when seen from the eyes of the prospective immigrant student/professional. IMHO, we can do better than create a situation where 100% of a person's destiny is in the hands of an employer who wields absolute immigration control until the end of the permanent residency process.

A colleague in the EB-5 business describes the whole H-1B and PERM process as "indentured servitude", and we've bantered that about quite a bit.  Seems to me that what I originally perceived as a bit of an exaggeration on his part is precisely what is genuinely taking root in the current economy, still slogging through with a very flawed employment-based immigration process. 

At a time when American competitiveness is most challenged,  it is tragic to put these desperately needed professionals through a process which is the metaphorical opposite of "rolling out the welcome mat".



Friday, February 19, 2010

Part 3.5- Last 2 minutes of F-1 to Perm Residency Blog





PART 3 -Video: U.S. Permanent Residency for F-1 Students

Sigh...I did it AGAIN.  The third installment went over by a minute so look for 3.5, which is a quick two minutes.

I have to get a stopwatch.  I talk SOOOOOO much.

Have a great weekend and remember: in addition to the useful information I provide in these video blogs for F-1 students looking for a solution to their permanent residency, these videos are also invaluable to insomniacs...(-;  J




Thursday, February 18, 2010

Video: U.S. Permanent Residency for F-1 Students- PART 2

This second part of the blog discusses the options available to graduating F-1 students with entrepreneurial ambitions.



Video: U.S. Permanent Residency for F-1 Students- PART 1

This first of three discusses the "traditional" paths to a green card for F-1 students



Expounding on EB5 Visas in China and H-1B Prospects for Next Year

Reporter Stella Chan recently interviewed me for China Media Net, here are the links to the Chinese articles.  This one discusses conflicts of interest in attorneys and agents marketing Regional Centers in China and what investors need to know:



http://www.dwnews.com/gb/MainNews/2010-02/2010-02-10-14-03-58-622-3.html

This one covers my thoughts on Comprehensive Immigration Reform (CIR) and prospects for H-1B numbers in the coming year.



http://www.dwnews.com/gb/MainNews/2010-02/2010-02-10-14-07-11-625.html

If Stella is being funny and I'm ordering Peking Duck or something, please let me know...(-;



Friday, February 12, 2010

Expounding on EB5 Visas in China and H-1B Prospects for Next Year

Reporter Stella Chan recently interviewed me for China Media Net, here are the links to the Chinese articles.  This one discusses conflicts of interest in attorneys and agents marketing Regional Centers in China and what investors need to know:



http://www.dwnews.com/gb/MainNews/2010-02/2010-02-10-14-03-58-622-3.html

This one covers my thoughts on Comprehensive Immigration Reform (CIR) and prospects for H-1B numbers in the coming year.



http://www.dwnews.com/gb/MainNews/2010-02/2010-02-10-14-07-11-625.html

If Stella is being funny and I'm ordering Peking Duck or something, please let me know...(-;



Wednesday, February 10, 2010

Commercial Real Estate Financing And Why EB5 Investors Should Care

The Miami Herald published an article today by
Elaine Walker regarding commercial real estate financing and what’s coming down
the (Turn)pike.  You can read the article
here but I
wanted to point a couple of things out for those of you close to deciding on an
EB5 Regional Center…not just in Florida but anywhere.



We’ve all been told that things are “getting
better” in real estate; I personally don’t buy it, notwithstanding the
statistics which, when viewed at just precisely the right angle and light,
suggest we are “rebounding”.  Granted,
that perception contradicts what is being said by every realtors association in
the country, and it certainly isn’t like me to be pessimistic.  But Ms. Walker did a great job of telling the
story objectively…and what can be extrapolated from can have MAJOR consequences
on today’s EB5 Regional Center activities.



The problem, you see,  is that no matter how the numbers add up…the
numbers just don’t add up!



The article reported on Urban Land
Institute's South Florida Economic & Development Outlook gathering, which
took place on Tuesday.  Consider these
points made in the article:



-Delinquencies on
Commercial Mortgage Backed Securities are expected to steadily increase from
the current level of about 4 percent, hitting a peak in late 2012 at 12
percent.



- the abundance of ``extend
and pretend'' loan rewrites, lenders to extend the term of a loan in order to
avoid writing down the value of the asset, which could have seen as much as a
50 percent decline.



Only Dr. David Altig, senior vice president
and director of research at the Atlanta Fed, was quoted in terms of linking the
commercial real estate finance market with what I personally think is the big
pink elephant in the room, ignored by almost everyone in the sector: ``If the
unemployment rate doesn't come down significantly, the lifting of the fog is
not going to happen,'' he said.



Bingo. 
No jobs means no business expansion, which means now growth in
commercial real estate…unless it continues to be speculative in nature, as it
is right now in certain markets…and as it was right before this whole real
estate nightmare began in the is country.



So here’s the
point: last year, the number of USCIS-approved EB5 Regional Centers nearly
doubled and our phones are ringing off the hook with developers who have “discovered”
the EB-5 Regional Center mechanism and who are being told by some attorneys
that, ahem, they will be glad to get them approved as a Regional Center.  Most of these are, of course, equity-based
programs linked to commercial real estate projects…projects which had been
shelved or, at least, slowed by the unavailability of construction
lending.  Some are great programs with
sound planning a first class management; others, frankly, have left me
incredulous…honestly amazed that USCIS would grant Regional Center status to
structures almost surely poised for doom.



 



And no, I will NOT
tell which those are because I have no interest in getting sued.



 



I will leave you
with the question you, as a potential EB5 Regional Center investor, should be
asking him or herself:



 



“Does it make sense for me to
invest in an EB5 Regional Center when:



 



a) I will be holding an equity stake in commercial real estate in this
market



 



b) I will be investing as a limited partner in a commercial-real-estate-driven,
equity-structured Regional Center precisely when commercial lenders deem such
investments as risky AND



 



c) Even if all goes well, I have no clear exit strategy through which to
retire my investment funds?? "


BTW: if you are being promised a “buyback” (such as what many Chinese brokers are telling their clients), RUN
for the hills: no risk equals no green card, period.

Choose wisely, my
friends.  Choose wisely.



PART 2: Understanding the Potential Impact of EB5 Job Creation Methodologies

Here you go!




VIDEO BLOG: Understanding the Potential Impact of EB5 Job Creation Methodologies





Wednesday, February 3, 2010

Helllllloooooooooooo....anybody OUT THERE???

I spent HOURS reading over excruciating USCIS dicta to bring you a concise synopsis of the January memorandum and NOT A COMMENT.  In fact, my site visits today are about a third what they've been on days when I don't write!  Gads!!!!

A simple acknowledgment of my "what visa do I need to visit New Mexico" smarmy remark would have sufficed!  Why, oh WHY, do I bleed for you, Dear Readers?

Oh, well.  At least I know of ONE Regional Center which is high-5ing me over the newest revelations.  And that, it appears, shall be my sustenance for the time being.

So be it or, as we say in these parts...SOBE it...



Tuesday, February 2, 2010

New EB5 Regional Center Memo: Reading Between the Lines



A few weeks ago I told you
that Donald Neufeld, Acting Associate Director of Domestic Operations for
USCIS, had published a field comprehensive field memo regarding EB5 Regional
Center Adjudications, and that the memo rescinded "in its entirety"
the January 19, 2005 memo which we've all been relying upon since then.



Mr. Neufeld's memo was
published on December 11 and only now have I been able to make my way carefully
through the 23 pages to bring you what I perceive to be the primary
points.  I'm surethat some of you will disagree as to what I consider
"primary" and note other elements which I do not touch upon; I invite
you to write me if that is the case as this is all about improving our
collective understanding of what we can expect henceforth in Regional Center
adjudications.



I will begin by telling you
that whenever the USCIS publishes a memorandum -- especially a big one -- my
stomach turns over.  Historically, at least from my point of view,
"clarifications" more often than not are euphemisms for "we're
making things tougher for you immigration attorneys once again".  I
am please to report that Mr. Neufeld's memo is a deviation from that norm, and
that it actually contains a number of well-considered and prudent changes which
will, I believe, further permit the USCIS to uniformly adjudicate the
continuing number of EB5 Regional Center prospects seeking certification.



To make this as painless as
possible, and to permit you to refer to the memo, I am citing the page and
paragraph of each point of comment:



Cover page: the memo's
purpose provides various points of guidance, including "the procedures to
be used when there appears to be a material change in circumstances relating to
an eligibility issue following the the issue's prior adjudicative
resolution". My thoughts: remember
that there are two levels of EB5 investor adjudication- the initial I-526 and
the subsequent I-829, making residency permanent.  We'll look at this more
closely below but I believe this guidance is the result of a number of Regional
Centers changing tack, if you will, mid-process.



Top of page 2- Reiteration
of the concept of "indirect jobs". 



My
thoughts:  while most of us in the EB5 biz use the term "indirect
jobs" to refer to the non-direct traceable employment resulting from
economic investment, the memo reminds me of something I'd forgotten. 
"Indirect", as far as EB-5 purposes, means those who work for the producers,
suppliers, and service providers which are used by the RC, e.g., the Fedex
guy.  "Induced jobs", in contrast, are defined in the memo as
"those jobs created when direct and indirect employees go out and spend
their increased incomes..."  Why is this important?  Because of
econometric modeling and the potential implications for adjudication.  Provable
job modeling acceptable to USCIS
is a critical component at the I-829
level.  



Middle of page 2- examples
regarding "at-risk" requirement.



My
thoughts: those of you who have been reading me for a LONG while need not be
reminded of my repeated tirades of the late 1990s to the vein of "It's
about the RISK, Stupid!"  While the "smoke and mirrors"
nonsense of that era does not seem to be around, there continues to be a subtle
linguistic ballet in a number of Regional Center prospecti I have read,
essentially suggesting that their investment was somehow "safer" than
others.  In some cases, the statements appear valid: carefully secured
investments with proven job creation methodologies already accepted by the
USCIS as fulfilling EB-5 requirements are certainly "safer" then high
risk ventures which rely on projected direct job creation; that's hardly
news.  After all, in any investment portfolio there are riskier,
high-yield investments and safer, low-yield bonds and the like...it is up to
the investor to define his or her risk-aversiveness. 



IMHO,
the best regional centers understand that an EB-5 is different than a
conventional investment in that the primary objective is to secure the
residency for the investor while making darn sure the methodologies and numbers
will hold up at the I-829 level.  If that is correct, then the formula is
safe: create the most fiscally prudent and conservative investment and job creation
model you can with risk, but the least possible risk.



Page
4, middle (and my personal favorite paragraph in the memo): “Streamlining EB-5
Case Processing”. 



My
thoughts: This is where Mr. Neufeld cuts to the chase of a core problem in
traditional INS/USCIS/State adjudication deficiencies: that irrepressible
desire to readjudicate what has already been approved and remains
unchanged.  To this effect, he says”



“If
USCIS evaluates and approves certain aspects of an EB-5 Investment, that
favorable determination should generally be given deference at a subsequent
stage in the EB-5 process.”



  Mr. Neufeld points out that this is not the
case where there are “material changes”, fraud, etc., but he really hammers the
point home: don’t fix it if it isn’t broken! 
He acknowledges the USCIS’ own adjudicatory issues with this, saying at
the bottom of the page that:



 “the adjudication of EB-5 petitions has been
prolonged due to the issuance of requests for evidence (RFEs) that inappropriately
seek to revalidate previously favorable determinations.”



(Oh,
if we could ONLY get this memo directed at business visa adjudications….sigh).  This recognition and its specific mention in
this important memorandum bids well for those Regional Centers whose navigation
has been smooth and steady…and poorly for those who have had to recraft and restructure
their original models.  The latter’s
cases have been – and, he points out, have no CHOICE but to be:



 “…delayed due to the material alteration of
documentation vetted during the Regional Center Proposal Process, requiring
that previously decided issues be re-adjudicated within the EB-5 petitioning
processes.”



So
what exactly does that mean for prospective investors?  It means that dynamic changes occurring within
the Regional Center subsequent to its INITIAL approval (unless, of course, the
RC has sought confirmation subsequently on whatever issues have changed) can
mean delays and even petition denial. 
Consider Mr. Neufeld’s concluding point on this:



“Information
provided in support of EB-5 petitions may also prompt USCIS to reopen a
Regional Center Proposal and ultimately terminate the regional center
designation…”[
emphasis added]



 Folks, that  is pretty
scary stuff
if you are invested in a Regional Center with a history of
reinventing itself; it is comforting if you are invested in a proven center
with no alterations in investment structure, job creation methodology, etc.



Page
5, middle: “Changes in Form -526 Business Plans”. 



My
thoughts:  I could go on at length here
but it wouldn’t add much to Mr. Neufeld’s clear comments, which boil down to
this:



“The business plan
in the Form I-526 petition may not be materially changed after the investment
has been filed.”



Not
to be an alarmist, but given the number of Regional Centers advertising new and
improved programs, that caveat – based solidly on 8CFR 103.2(b)(1) and the Katigbak and Izummi I&N decisions – rings loud and clear. And it is then
when the memo delves into an interesting concept Mr. Neufeld calls “re-adjustment
of status”, i.e., the de novo
adjudication of permanent residency for an investor when the underlying capital
investment and job creation scheme previously filed in the I-526 changes!



Page
7, top, regarding “external stakeholders”:



My
thoughts:  when the initial regs came
out, the ability for those not directly included in (but affected BY) the EB-5
visa process to get involved was part and parcel of the “transparency”
envisioned, much as U.S. workers get to review the ETA9035 of an H-1B
professional employed by their employer. 
Because of the massive public interest in the EB-5 visa, however, the
USCIS team of adjudicators has been essentially bombarded with outside
inquiries, many of them (I am told) consisting of essentially “fishing
expeditions” by prospective regional center wannabes or simply investors…stuff
that should be directed either at appropriate counsel OR at the Regional
Centers peddling their programs.  As a
result of this, the memo directs ALL “external stakeholders” to use a single
email account – uscis.immigrantinvestorprogram@dhs.gov
– through which the USCIS will separate the wheat from the chaff, in order to
cull the more relevant and important questions and bring those issues to light.



Given
the doubling of existing EB5 Regional Centers in the past year – it took almost
two decades to get to almost 40 then a SINGLE year to get to almost 80 – Mr.
Neufeld’s decision to channel inquiries makes sense.  While I suspect that many of my colleagues in
the immigration bar will take issue with this “single conduit” system, as a
former consular officer who received at least one monthly phone call from a
U.S. citizen wanting to know what visa they “needed to go to New Mexico”, I
certainly understand the practical purpose of this change.  My suggestion to the Service: create a
specific email channel for accredited and licensed attorneys with pending RC,
I-526, and I-829 petitions, permitting them to go straight to the EB-5 team and
circumvent the often-frustrating AILA liaison process.



Page
8 forward represents the actual regulatory language changes implemented to give
effect to the memorandum.  I will touch
upon a few points therein:



-Page
11 includes some very specific adjudicatory language regarding amendments to
Regional Center proposals.  If you represent a Regional Center or a
client contemplating an investment, read this stuff CAREFULLY.



-Page
12 creates the following specific language regarding the issue of “re-adjudication”:



Note: if the Regional Center requirements are met and a
determination of eligibility is made, then the favorable determination
regarding regional center eligibility requirements for the capital investment
structure and job creation sould generally be given deference and not revisited
in the adjudication of individual EB-5 petitions, as long as the underlying
facts upon which the favorable decision was made remain unchanged.”



CRITICAL
stuff, guys, really.



-Page
13, the regulations remain oddly uncorrected: the requirement that the alien be
“engaged in the management of the new commercial enterprise” remains as it was,
without be corrected to clarify that this does not apply to Regional
Center investors.



-Page
14, the meaning of “full time position” and mention of econometric models:  this is interesting stuff here.  RIMS and IMPLAN – the two most utilized job
creation modeling tools seen in EB-5 RC planning – are mentioned by name, as is
the issue which has been a bit of the “pink elephant in the EB5 room” for
awhile…job modeling as it relates to job COUNTING.  The new guidance acknowledges that respected
economic measurement tools “do not distinguish between full-time and part-time
jobs”.  The big deal: to those rare and few Regional Centers who have done
their job econometrics with painstaking care from day one, this is a serious “Hi
Five” moment.  Why?  Read on…



Therefore, the number of indirect jobs quantified through the O/O model
analysis will be considered full-time and qualifying for EB-5 purposes.´
[Emphasis added]



Now
that, for a few of us, brings a huge collective sigh of relief, and the big
pink elephant HAS LEFT THE ROOM!  Another
nice touch: while asserting that seasonal and temp jobs do NOT count, the new
regs interpret direct construction jobs as permanent for EB-5 counting purposes
if they are 1) created by the investment and 2) expected to last at least 2 years. 



-Page
15, in an uncharacteristically pragmatic USCIS bow to business reality:



“…it is the position that
is critical to the direct employment criterion, not the employee.  Accordingly, the fact that the position may
be filled by more than one employee does not exclude a position from
consideration as full time employment.”



-Page
17, another tasty morsel for existing
Regional Centers:



the area where the new commercial enterprise is located may qualify as
a TEA at the time the capital investment is made or the I-526 is filed,
(whichever occurs first), but may cease to qualify by the time the form I-829
petition is filed.  Changes in population size or unemployment rates within the area during
the alien investor’s period of conditional permanent resident are acceptable
as increased job creation is the primary goal of the EB-5 Program”

[Emphasis and more Hi Fives added]



-Pp.
18-19, in brief:  the USCIS, the memo
confirms, will “have no substantive authority to question or challenge [a] high
unemployment designation” made at a state level.” Put simply, this codification means that this potential (and past)
adjudicatory detour, so reminiscent of the NIV adjudications of late, is now
preempted.



There
is more stuff but, frankly, that’s what I see as most important.  Hope it helps!  Jose