As busy as some EB-5 megaprojects are in China, and as much money as much as they are collecting, seems the "shovel" in the "shovel-ready" is a bit behind the momentum: our second full week in China has led to a number of conversations with Chinese brokers with clients who funded EB-5 projects many months ago...and are still on "hold". The reason: most EB-5 projects being marketed in the Far East are EB-5 dependent for execution. Translation:
- A bank promises the GP that they'll fund 33% if the project gets local government and EB-5 funding for the balance.
- The county/city (or both) agree to cover a third of the deal if the balance is covered by a bank and/or EB-5 funding SO...
- The GP shows up in China with "confirmed" investments from the bank and from the government...but can't even START till the last investor is funded.
There are but a handful of EB-5 projects which are:
- not dangerous "troubled" enterprises and
- already active and operating
It is these rare projects which offer immediate I-526 filings, no delays, and the assurance that the investor's green card doesn't depend on the GP's ability to secure ANOTHER 50 investors before the project can even get rolling. The logical result of all this is pretty predicatable: Chinese agencies tired of making excuses for stalled EB-5 launches contacting Sharon and me to "switch" escrow to bona fide, working EB-5 ventures with no strings attached.
Fortunately for them, we happened to have precisely what they need. :-D