Wednesday, October 27, 2010

EB-5 FUNDAMENTALS: IMMIGRATION OBJECTIVES VS. INVESTMENT OPPORTUNITY

Based on the emails that I’m getting, I think it’s time for us to step back and take a fresh look at the big picture of EB-5 Regional Center visas. With over 100 Regional Centers approved by USCIS and almost as many in the pipeline, I’m finding that the quality of the marketing teams does not bear any direct relationship to the quality of the underlying projects.


Investors who have the resources to invest in an EB-5 visa and secure their permanent residency come in two basic flavors: entrepreneurs and limited partners.  The former are the folks who want to start their own business in the U.S., want to be “hands on”, and believe they can create 10 direct jobs through their investment.  These are the candidates of the Individual EB-5 Investor visa category.  The second “flavor” is made up of the folks who see an EB-5 investment as a pragmatic tool through which they can achieve their U.S. permanent residency.  Sometimes they are coming to America to retire; other times they DO want to start their own business once they immigrate but don’t want the arbitrary constrictions of a conventional investment visa category.  For these folks, putting their money to work and creating American jobs via an EB-5 Regional Center Investor visa makes the most sense.


Today, many immigration attorneys are so busy promoting one EB5 Regional Center or another that they miss the forest…because of all the trees.  I’ve had at least two clients who had received hard-sell EB-5 Regional Center visas.  In both cases, they had existing U.S. businesses and strong foreign affiliates.  They were, unbeknownst to them “Closet L-1As” and readily immediately qualified and eligible for EB-1 Multinational Executive permanent residency…without a half million dollar investment!  (You should see the face of a client who has been led to believe that his only path to the coveted green card is via a jumbo investment when you tell him that’s hogwash: priceless!)


But even for those for whom the straight-shot to an EB-1 isn’t possible, the notion of EB-5 suitability needs to be explored by the attorney.  There are simply too many investors who are not aware that if they open their enterprise in a TEA and create 10 jobs, they CAN get a green card with a $500,000 investment.  Why is this news to almost every investor I speak with?


I’ll tell you why: because the EB-5 Regional Center visa is what the press is eating up and what people are spending millions to promote.  But not all that glitters is gold…just ask the Chinese government, which is taking a good look at some of the more questionable programs being marketed in the Far East, which generates over 85% of all EB-5 investments.


So, first things first: assuming you already know that an EB-5 investment is the best course, first rule out an individual EB-5.  Why?  Because the wisest decision is the best-informed.  Candidly, given that there ARE at least several solid EB-5 programs (IMHO), the argument for an individual EB-5 is suddenly a lot less compelling that it used to be.  Before –again, IMHO – you had a dozen flavors of garbage from which to choose; an individual EB-5 was a no-brainer.  Today, you have a virtual smorgasbord of lame projects from which to choose…and a handful of cherry-picked good Regional Centers.  Given those few good ones…do you really want Uncle Sam looking over your shoulder and making you create 10 jobs when, in reality, your business is doing great with 7?  Not me.


So then, when you amble down the road of true analysis and end at the door of EB-5 Regional Centers…how do you choose?  I suggest to my clients that they begin by separating immigration objectives from investment objectives.  Today, I can show you a handful of EB-5 RC Programs which are proven and successful green card vehicles but terrible investments; I can also show you some pretty smart investment structures in terms of ROI and protection of the EB-5 Limited Partner's investment…but with questionable job creation logic and projections which are heavily academic (i.e., pretty unrealistic.)


How many EB-5 Regional Centers deliver on both fronts?  Very few.  More on this soon!



Monday, October 11, 2010

EB-5 Denials: Inglorious Projections

If there's been a recurring theme with EB-5 I-829 adjudications in 2010, it most certainly has to do with job creation numbers and deviations from planned business activity. While the USCIS has been historically liberal in excepting generous job rejections at the initial I-526 stage (i.e., the initial approval of conditional residency as an EB-5 regional center investor), 2010 has been characterized by challenges to such projections, considerable scrutiny of both direct and indirect job creation, and a close look at deviations from the original business plan.


Some of these problems have been made public but the majority remain invisible to those contemplating an EB5 Regional Center investment. One of the benefits of being a part of the very small EB-5 Regional Center community is that folks tend to send newsworthy items in my direction. Most often, it's a disgruntled investor who's been left high and dry by a denial; oftentimes it is a cryptic article published in a local newspaper and found by my search spiders. Occasionally, the bad news comes to me via another Regional Center hoping that I will write a blog about another RC's  notable problem.


One of the problems of being a part of the very small EB-5 Regional Center community is that it is, well... very small. In my view, it is irresponsible journalism to use a blog to broadcast unsubstantiated rumors. On the other hand, when a specific issue is burning up the Internet -- say Victorville -- it is irresponsible to not communicate this to my readers. Because so many of these unfavorable adjudications pertaining to job creation/business plan deviation issues arrive via private sources, and oftentimes involve outstanding attorneys whose RC client derailed the original pan, I will not publish specifics.  Bad things are happening to some very good EB-5 attorneys through no fault of their own, and that's not something I'm interested in relaying.


One thing I can tell you is this: it is evident yet again that the decision to consolidate EB-5 processing at Laguna Niguel was a wise decision for the USCIS. These new denials are clearly distinguishable from the denials of the late 90s and early 2000s in that they demonstrate considerable domain expertise by the USCIS EB-5 adjudication team. The addition of professional economists to the team and growing sophistication of the part of the adjudicators is making for some pretty incisive adjudications… and that’s usually bad news for the regional centers involved. There are a lot of investors in the pipeline between an easy I-526 approval and ad upcoming I-829 filings. For those who invested with masters of consistency – such as the inimitable CMB – there have been no changes in business plans or activity. For many others, especially in the construction and development sector, an erratic economy has triggered VERY "material changes" in the original business plan, meaning that things at the 829 level look pretty different than they did 2 years ago.


If that sounds like your Regional Center, your proactive involvement in insuring that changes have been communicated to and approved by the USCIS before you file your I-829 is absolutely critical if it's permanent residency you seek.



Wednesday, October 6, 2010

35 of 70 SEATS BOOKED: Jose's Dubai EB-5 Seminar Nov 17, 2010

Folks, I just wanted to update you on the Dubai seminar...with just an ad here and there and a lot of word of mouth, we have filled 35 of the 70 seets for our November 17 EB-5 Seminar at the Shangri-La Hotel in Dubai.  My colleague, Namjoo Hashemi, a Canadian immigration consultant who has helped hundreds immigrate to Canada from the Middle East, will be joining me and Jud Laird, owner of BC Properties and the pending Lake Point EcoVentures Regional Center, in presenting a dynamic, fact-filled, myth-dispelling morning discussing the real truths behind the EB-5 visa and the things you need to know to determine which Regional Center is right for you.  In fact, one area we will explore in depth is the phenomenon of attorneys steering clients toward EB-5 visas....when better alternatives exist for the client!


I am going to be firing out the first press release on the event in the next day or two; based on what we are seeing and the fact that this first Dubai event is free, I think we'll book up shortly after that goes out.  I wanted to let me readers have a chance to sign up before that, so the link is below.


To clarify; the event will not be the usual "here's why our Regional Center is best" deal you are used to seeing.  It really is an informational seminar discussing everything from taxation issues  to timing strategies to other migratory options...including the often overlooked INDIVIDUAL EB-5 visa.  As I state, the Lake Point EcoVentures Regional Center EB-5 project is still pending USCIS approval at this point.  If we have that approval, we'll be sharing what we believe to be the smartest EB-5 program available when we are in Dubai; if it is still pending approval, we will have to limit our discussions to a general explanation of that program as permitted by SEC and USCIS guidance, and this will only make up a brief portion of the seminar.  Either way, it's going to be a great event and is filling up fast, so sign up today if you are an accredited investor exploring U.S. permanent residency!


[Please note: attendees registering will be electronically vetted and have to attest to their meeting the specific U.S. SEC definitions of "accredited investors".  This event is ONLY for such investors.  If you are interested in a consultaition with Jose but are NOT an accredited investor as described in the registration process, PLEASE DO NOT REGISTER FOR THE SEMINAR.  Instead, please email him directly at jlatour@latourlaw.com and he will be happy to arrange a private appointment with you during his stay in Dubai.]


Register Now for Jose's Dubai EB-5 Event



Monday, October 4, 2010

Pizza for Passport, Anyone?

Lately, all I've been blogging about is EB-5 this and EB-5 that...so much so that for the second time this week, a prospective client looking for H-1B and PERM assistance asked if we could refer them to an attorney who did this work!  I guess it's time to remind everyone that although EB-5 is no doubt the squeaky wheel these days, we - I should really say, "Melissa" - are/is STILL providing comprehensive family and business immigration services.


As you have no doubt gathered, my time these days is pretty much spent on EB-5 Regional Center structuring, consulting with existing Regional Centers, and helping folks find the right EB-5 program for them.  Between that and my primary corporate clients, for whom I handle a diverse number of investment-related matters, my plate is more than full.   Melissa, on the other hand, is busier than ever with our non EB-5 business immigration work, which involves mostly L-1A, E-2, E-2, PERM and complex EB-1 permanent residency.  She's handling not only her corporate clients but has assumed the role of primary counsel for a lot of the work I used to do myself, such as entertainer visas and the like.  Mel also handles the less frequent family immigration cases we take on, as well as naturalization and complex waiver filings. In addition to her busy case schedule, Mel continues to volunteer at the University of Miami's College of Law, most recently by presenting a training session called ""Immigration Options for Your Undocumented Clients". 


With our respective families and obligations, it is, of course, always a challenge to maintain balance.  I know I've been struggling with that a lot lately.  (At this stage in my life, my body is less than subtle in reminding me when I'm pushing myself too hard; a vague sense of being tired turns rapidly into sniffles and/or a sore throat; if I don't cool my jets and get one or two good, long nights of sleep, a cold is invariably next.)  As I hear about school meetings and Halloween costumes and soccer practice, I vividly remember my own life when the boys were young, and I marvel at Melissa's ability to balance all that and still manage her workload.  But, then again, she isn't a year away from AARP membership eligibility, is she? (-;


Like me, Melissa thinks that the best part of our job is in being able to help others.  Recently, Mel was working in Ft. Lauderdale and went in for a quick slice of pizza. Not having any cash in hand, she pulled out her debit card when the owner told her that they didn't take plastic.  Running late, she thanked him and explained she didn't have time to find an ATM.  As she turned around to leave, the owner said "WAIT, my treat."  And so Melissa got a free slice of pizza.


Although we spend a great deal of time giving free advice and guidance to people needing immigration help, the ubercoolness of someone giving us a free slice of pizza was not lost on her.  (Exactly the same thing happened to me buying an iced tea at an airport earlier this year, except it was the lady in front of me who paid).  As she ate her pizza and thanked him, they got to talking and as it turned out, Mr. Pizza was getting ready to file his N-400 application for U.S. citizenship...something Melissa knows a little something about.


Cool story, huh?  As Mel and I have often discussed, all this business about helping others really is karma-related.  It wasn't about Melissa getting a free lunch or about Mr. Pizza getting some valuable legal advice he otherwise couldn't afford...it was about one person deciding to do something nice for another with no expectation of anything in return, and the universe conspiring to see his good deed generously rewarded.