Immigration Insider

Intelligence and Immigration

I spent a lot of time last week at the AILA conference quietly pondering just how our immigration system got as broken as it has.  Between unresponsive bureaucrats, dogmatic policies which fly in the face of our national identity, and lawyers trying to bend the rules to the point of destroying useful immigration options through abuse, it became clear to me that nothing less than a total rewrite of existing immigration policy is needed. The current Frankenstein is, sadly, irreparable.

There is a great line from the song of one of my favorite artists, Donald Fagen, of Steely Dan fame.  In his solo album debut, IGY - which, interestingly, stands for "International Geophysical Year" -- the title song explores the idyllic perfection of the future he idealized as a teenager in the early 60s.  The line:

"A just machine that makes big decisions, programmed by fellows with compassion and vision"...

Ahh...that it were that simple.  One can't automate justice; it is the innate responsiveness of one human being to another that determines how juries vote, how laws are enforced, and how this extraordinary experiment we call America unfolds.  But as we know from our own Constitution, it IS possible to design laws "with compassion and vision".  We have that blessing, but what we are missing is compassion and vision in the execution and administration of our laws.  Just as adjudicators need to have more empathy, American lawyers -inbred with the ferocity to which we are programmed in our adversarial legal system - need to advocate passionately but sensibly.  Only when we as attorneys can make reasonable arguments for justice will our positions be supported by intelligent men and women.

You guys go have a great weekend now, but one last thing: my brilliant Libertarian cousin Juan sent me something today that says it all about intelligence, and I encourage you to reflect on it:

Intelligence is a very special mental capability that, among other things, involves the ability to reason, plan, solve problems, think abstractly, comprehend complex ideas, learn quickly and learn from experience. It is not merely book learning, a narrow academic skill, or test-taking smarts. Rather, it reflects a broader and deeper capability for comprehending our surroundings---"catching on", "making sense" of things, or "figuring out" what to do.

If you want the whole enchilada, go here:  Measuring Human Intelligence

2010 Florida Trend's Legal Elite- Honored and Humbled!

Folks, just wanted to share something which is personal (as I will explain) and very meaningful to me.  As many of you know, I have been practicing a long time.  Six years ago, I sold my practice to my partner and stepped out of immigration for a few years.  When I returned to it last year, the AILA meetings were full of faces I didn't recognize, the PERM process had replaced labor cert, and, frankly, I felt a bit like an old dog concerned about new tricks.

I jumped back into investment based immigration wholeheartedly last year and it's been a wild and woolly year and a half so far.  A few years back when I was still in the prior practice, I'd been named to the Legal Elite, so I was only a little surprised to hear that I'd been nominated again.  What has been tremendously cool and humbling, however, was that I was one of the three Florida lawyers who practice immigration law who made it for 2010!

After my "sabbatical", it is very heartwarming to know that my friends and colleagues still think I'm a decent attorney.  You see, the whole process is very meaningful to me because it is Peer Driven; it is the result of anonymous ballots submitted by Florida Law members.  Last October, Florida Trend Magazine asked all in-state members of the Florida Bar to participate.  Lawyers were asked to name attorneys whom they hold in the highest regard or would recommend to others; 1.8% of the total Bar membership was named to the list. Given that there are some pretty darn good immigration attorneys in Florida, I am very honored to have been chosen as one of three in that area of practice. Check it out!:

2010 Legal Elite

I send my warm congratulations to my old friends Susan Hahn and Gene Hernandez, who are without a doubt very MUCH in the Legal Elite!

CIS? NIMBA…

As I sat at the opening session of the American Immigration Lawyers Association (AILA) National Convention on Thursday morning, I felt a rekindling of the fire I felt when I began immigration practice.  David Leopold, AILA’s newly-installed president, spoke eloquently about our responsibilities as immigration attorneys, about the many masks behind which racism hides, and about our history as a nation of immigrants. 

I don’t know Mr. Leopold personally, but after that presentation of his, it sure feels like I do.  The son of Holocaust survivors and as passionate an advocate as I’ve seen among our ranks, it was quite apparent to me that the fire this man has in his belly is exactly what we – AILA as well as the United States of America – need to turn around the catastrophic injustices manifested by our current hodge-podge of disjointed immigration laws and regulations.

Despite my nearly 20 years as an AILA member,  I have often taken the organization to task for what I perceive to be, at times, casting an agenda net which is as implausible as it is broad.  It is difficult to develop a constituency among the electorate or within Congress when every single immigration restriction brings forth dramatic cries of “FOUL!” by AILA.  Unfortunately, those of us who practice investment-based and employment-based immigration have different issues, concerns, and perspectives than the majority of our AILA brethren practicing in the areas of family immigration, deportation defense, asylum, and the like.  What is good for the goose is not always good for the gander, and it is always troubling to see AILA take an uber-liberal position which articulates an “injustice” where one does not, in fact, exist.

The fact is that immigration laws, like all laws, are meant to be enforced; barring underlying circumstances which create a significant injustice, deporting someone who has been subject to deportation for years is neither outrageous nor unjust.  It is simply enforcement of the law.  For too long AILA and other immigration advocates have tended to thrash around like a barely-grazed soccer player when confronted with enforcement issues, demanding Congressional reform when everyone knows it will not happen and it makes credibility that much harder for those of us who advocate for those who actually do follow the letter of the law.  My arbitrarily-denied H-1B professional is, in reality, the victim of far more injustice than the guy who overstayed his visa waiver and is finally nabbed five years after a removal hearing he chose not to attend.  But while the latter gets the media attention, the former is accepted as just part and parcel of a dysfunctional legal system.

This problem of these “two AILAs” – the liberal, defense-focused AILA and the pragmatic AILA advocating for sensible business immigration reform -- has existed for years, and it invariably weakens AILA’s effective advocacy on both fronts.  I am hopeful that under Mr. Leopold’s leadership, our institutional agenda can finally be reconciled and fine-tuned so that Congress and the American people are able to understand and separate the issues.   Until we are able to do so, we are simply the Democrats to FAIR’s Republicans, entrenched in a public and congressional perception which is simply inaccurate. 

As Mr. Leopold stated in his installation speech (and as I have stated in these pages before), there is nothing surprising about Arizona’s incredibly flawed response to the problem it faces with illegal migrants.  The USG is responsible for border enforcement but despite the dramatic increase in “boots on the ground” and technologies, the Mexican cartel wars continue to cross into the U.S.  Arizona’s dangerous encroachment on fundamental constitutional protections is, in the eyes of a state saddled with the financial burden imposed by both the criminal and social costs resulting in the presence of an unchecked illegal migrant population, a rational response to the consistent failure of the federal government to control the border. And today as yesterday, the amount of money Western states spend to educate children who are either undocumented aliens or the U.S. citizen children of undocumented aliens is still massive and not subsidized by the USG…no wonder these laws are passing.

But until there is COMPREHENSIVE immigration reform – reform which addresses not only the enforcement angle but which creates a sensible system of legal migration consistent with our fundamental American values – the only thing which will “control the border” is another Berlin Wall.  And that’s not what we are about.

So what are the components of this “sensible system”?  I believe they are:

• The establishment of an interim lawful status for the millions of illegal workers who have histories of reliable U.S. employment and clean criminal records which permits them to establish residency through a structured series of steps including mandatory community service, mandatory English-language education (with reasonable limitations for the elderly, as it is with naturalization filings), and, finally, a transition to lawful status which incorporates features of the U.S. naturalization process.   I know that my insistence on English-language education is politically incorrect, but that’s how my family viewed immigration to America: if you are lucky enough to live here, you have a responsibility to learn the language, no excuses.   I think that if a person who has violated U.S. immigration law for years is not willing to learn English – the one solitary social bond available to 100% of Americans – then they can head back home.  Sorry.
• The passing of a single law which mandates that UNDER NO CIRCUMSTANCES will any federal agency use bureaucracy, regulatory ambiguity, or – that most undemocratic of weapon of them all, non-appealable consular discretion – in a way which results in fundamental injustice to a visa applicant, their employer, or their U.S. resident or citizen family.    The need for an empowered, funded, and truly independent arbiter – not a “liaison” or “ombudsman” which is part and parcel of the bureaucracy itself – is crystal clear.  For two plus decades I have seen identical petitions handled in entirely different ways by USCIS, first tour visa officers who don’t know the difference between 214(b) and 221(g), and an institutionalized lack of accountability and human sympathy within the federal agencies responsible for the implementation of immigration laws.  It is inexcusable.  While you cannot legislate morality, you CAN legislate accountability, and it is time we do so within our immigration process.
• The total deconstruction of the employment based visa categories, starting with the elimination of an H-1B process that has gone from a reasonable administrative process to a non-legislated tax on U.S. employers which happen to be in desperate need for technology, health-care, and science professionals who simply are not available in the U.S.  Tell me this: what rational U.S. employer would spend $2000+ on H-1B filing fees if they could simply hire an American worker to fill the job??  We need a straightforward temporary worker program that allows foreign professional, agricultural, and seasonal workers to be a viable resource for U.S. employers seeking to compete in a global marketplace, where we are losing ground daily.  
• We also need to go one step further beyond PERM – an admittedly saner method than its predecessor, labor certification – to figure out how an American company can permanently hire a proven non-immigrant worker without apology, and without the artifice of advertising a position which has in reality been filled by an valuable, existing employee.  The current system not only defrauds U.S. applicants by deceiving them into believing a position is open but it makes a mockery of the meritocracy which has driven American industrial leadership for over a century.  The whole notion that an employer MUST hire an American worker to replace a proven worker who is in legal nonimmigrant status is anti-business and reeks of entitlement.  Send me all the hate mail you want and I’ll say the same thing I’ve said for 15 years: if you are an unemployed U.S. worker in the pharmaceutical, IT, and healthcare fields, send me your resume instead of the hate mail and I’ll find you a job.  (Not one resume in 15 years, despite so many spite-filled claims of displacement by foreign professionals.)  I’m not saying exploitation does not happen, but in 20 years of representing employers in these industries, I’ve never met a single employer who preferred to have to spend thousands on my fees and filing fees to hire a foreign worker than to hire a qualified American worker.  Not one.

Sadly, this is the hardest part…getting Congress to tackle the totality of problems.  While legislators such as those in Arizona can get a voting public behind a radical enforcement method because “they’ve had enough” of federal inaction, the price these legislators have to pay for CIS is too steep politically.  Support improved methods of permitting foreign workers into the U.S.?  Cease characterizing U.S. industries with high foreign worker needs as evil empires and taxing them to bring in the talent they need?  No way, Jose (and, politically correct as that might be, I am allowed to say it.)  The fact is that John Q  Public still thinks that we have plenty of  U.S. pharmacists, and can’t figure out why on earth the guy ringing up his blood pressure medicine, Q-Tips and Ensure at 8 p.m. is from Nigeria.

Comprehensive immigration reform?  Not in my backyard.

AILA National Convention Kicks Off

The 2010 National AILA seminar began at the Gaylord Convention Center in Washington, D.C's National Harbor this morning with an inspired opening by immediate past AILA president Charles Kuck and a passionate call for comprehensive immigration reform (CIS), the subject of President Obama's speech at American University this very morning.

It's been 7 years since I've been to a national AILA convention and BOY have things changed. The half dozen booth exhibits have multiplied into dozens of booths hosted by EB-5, publishers, credentialing services and the like. Instead of another 6 pound program, the 1000+ pages of materials came on a little USB drive.

But the most noticeable difference is the size of the crowd. I was told at registration last night than some 2500 attendees are here...as I recall, that's about 4 times as many as my last national convention.

No doubt about it, the subject of immigration is hot today, but for mostly bad reasons. The palpable mood is one of disbelief, as the glaring incongruities, injustice and foolhardiness in the areas of enforcement, business immigration delays, and problem of undocumented aliens continue to be administered in a knee-jerk fashion.

It is clear that the emotions behind the topic of immigration run far deeper than do the rational efforts aimed toward CIS. Let's hope Mr. Obama has something concrete to deliver at AU this morning, because we sure haven't gotten what he promised us before his election.

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 investment.  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 Partner.

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.

 

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.

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.

“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 global.  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.

Vintage Jose: EB-5 Article from 11/20/98

PLEASE NOTE: THE INFORMATION CONTAINED IN THIS ARTICLE IS BASED UPON THE LAW, TERMINOLOGY, AND EB-5 SITUATION AS OF 1998.  IT IS NOT CURRENT INFORMATION AND SHOULD NOT BE RELIED UPON FOR VISA STRUCTURING PURPOSES!!

11/20/98

an examination of the EB-5 Immigrant Investor Visa Category and Implications of Recent INS decisionmaking

by Jose E. Latour

While most immigration attorneys handling business visa cases have at least dabbled in EB-5 petitions, the reality is that such filings are still few and far between. This article will explore the feasibility of the EB-5 NOT from a technical/legal standpoint, but from the standpoint of the immigrant investors concerns. The purpose, then, is to assist a potential EB-5 investor in deciding whether this mechanism is indeed in his or her interest.

I will not delve into detail as far as the EB-5 requirements- you can search [deleted] for this information. The basics are that in order to qualify for permanent residency in the U.S. for the investor, spouse, and unmarried children under 21, the investor must:

• invest at $1 million U.S. (or $500,000 in certain high unemployment zones)
• create at least 10 full time positions for U.S. workers (not including the investor or relatives)
• play an active role in the enterprise (which can be just about any legal business)
• prove two years down the road, to get the final approval, that the requirements were indeed met

A little history: when the Immigration Act of 1990 was passed, many of us hailed the new EB-5 as a potential landmark in U.S. immigration history. By combining a substantial investment with PROVEN job generation, two social purposes were met: the very tangible creation of jobs, as well as the more esoteric but potentially farther reaching stimulus to bring foreign dollars to the U.S. (As long time immigration watchers know, there are two seasons for U.S. immigration: high demand and higher demand. When the global economy is strong, the appeal of a fresh start in the U.S. is attractive. When the global economy is unstable -- as it is at the time of this writing -- the U.S. is usually the safest place to be. Nowadays, not even Japan offers economic peace of mind to outside investors.) Naysayers complained that Congress had "sold out" and was "selling" U.S. residency to the rich. However, with an annual cap of 10,000 visas, that would mean an average of 200 new millionaire families in each state, a hardly threatening proposition by anyone's standards. Even those opposed admitted that their opposition was philosophical...

So the law passed, and as I've written in prior www.usvisanews.com articles, those of us whose practice focused on business immigration scrambled for those "few" 10,000 visas. The expectations of an important new immigration mechanism, however, were quickly shattered by INS rulemaking. In their admittedly important effort to insure that investment funds were not drug profits, the INS rules created an unparalleled level of disclosure...exactly what an intelligent, offshore-investing international investor DOES not want to hear. To the INS, disclosure meant absolute disclosure, and the nuances and reality of international tax treatment never entered anyone's mind. Accordingly, an investor had to make a choice: disclose ALL offshore accounts and interests and risk a multijurisdictional tax nightmare despite the finest in tax planning, or forget the EB-5 altogether. As you can imagine, a collective "cry heard 'round world" was bellowed from Price Waterhouse offices all over the planet, and clients were sternly advised: if your immigration lawyer releases all this information that is none of the U.S. Government's damn business, you risk accusation of tax avoidance in [insert just about any tax jurisdiction, offshore or otherwise, here.]

And so the potential EB-5 investors scattered like flies, leaving a few hundred diehards per year to apply. (At the time of this writing, I don't know the most recent figures on EB-5 applications: however, they continue to be a tiny fraction of the 10,000 allowed annually.) I moaned and groaned about the problem, but Congress had moved on to other issues. I suggested alternative ways of verifying that the funds were not linked to criminal activity (Interpol and FBI searches paid for by the EB5 applicant), but no one really cared. Instead, business immigration attorneys did what they always do when a perfectly viable immigration mechanism is rendered impotent by poorly thought out government intervention: they looked for alternatives.

The alternatives included -- and include -- the L-1 (since many of these investors have active companies overseas) and the E-1 or E-2 (since many of them come from countries with U.S. bilateral treaties of commerce and trade.) But these options were merely non-immigrant visa mechanisms, and many of these investors wanted permanent residency. So the "creative lawyering" began. Using a foundation based upon the Immigrant Investor Pilot Program -- where certain regional investment projects could preregister for interested EB-5 investors -- a hybrid investment vehicle was incarnated, in various forms, by "investment companies" pooling funds. Those of with established investor visa practices were essentially assaulted with propaganda from these enterprises. Here is the general way they were SUPPOSED to work:

1. the investor placed an amount -- sometimes less than $100,000 -- into a guaranteed escrow account
2. the investment company leveraged the invested pool created by investors and obtained additional debentures, bonds, whatever, making up the balance of the requisite investment.
3. the initial EB-5 would be approved for the investor and family
4. after the removal of conditions two years later, the EB-5 investment could be liquidated and the money "invested" returned, less fees, commissions, etc.

I'm no psychic and I am often accused of trying unusual structures in visa cases, but I felt very uncomfortable with the concept. Reasons:

1. the total "at risk" investment statutorily required was never met...the $1 (or half a) million never was invested.
2. if there was a "money back guarantee", how could the investment be "at risk"?!
3. if the qualifying investment amount was "mortgaged", how could that meet the limits defined in the final EB-5 regs on point and....
4. the EB-5 requires an "active" investor; how could these programs, "hands off" by design, be active within the meaning of the law?

I was reassured repeatedly that they had addressed all this, that the EB-5 petitions were being approved. After a while, I got curious, asked for proof, and a Florida company with this program gave me proof positive in the form of INS approval notices! Indeed, perhaps I had been a bit literal in my reading of the regs...

Not so fast. It took a few years, but the INS finally read its own regulations and came to the same conclusion I had: these investment structures did not meet the capital requirements, were not at risk, and were definitely not "active" within the meaning of the law. (Outraged, these well financed companies are mounting an aggressive appellate campaign, but our phones were ringing off the hook when the denials for the removal of conditions based on the foregoing started coming in. To their credit, some of the companies -- including the Florida based entity which has so aggressively courted me -- actually reimbursed clients fully for the two year old investments.)

[ AN ASIDE: one of. the most perplexing angles on this was the mistaken belief on the part of the companies "recruiting" well-known business immigration firms that we were this natural funnel of business for them. As I told more than one smiling salesman, our EB-5 clients are not rich yahoos trying to find a place to park their money! As a rule, they are sophisticated business men and women looking to U.S. Immigration for a variety of business and personal reasons. I have YET to have a millionaire arrive at my door with "Gee, Jose, I have all this money and no clue what to do with it"...I admit, it would be fun...:-) ]

So where do we stand now? Well, if you know anything about the Immigration appeals process, you know it means years of delay and no real reassurance of success in the end. Worse, after a petition is denied, your status is not "stayed" pending the appeal. In other words, you are not allowed to remain in your current category while you pursue the appeal...it's more like "go home" and let your lawyer worry about it. While the information I have received indicates that these investment houses are convinced the INS will change its tack and the appeals will be favorable, I don't believe this will be the case. The said part is that if the INS had properly scrutinized these cases and come to this conclusion earlier -- as I did -- then the lives of hundreds of investors and their families would not be in this situation. But the early approvals -- right or wrong -- fostered a tremendous growth for these companies, as they now had "proof" -- again, in the form of actual notices of approval -- that their projects were working. Unfortunately, these folks are now caught in the uncertainty of legal wrangling and the appeal process.

Many firms continue to offer similar investment programs and, except for the clearly qualifying, pre-INS-approved designated Pilot Programs where minimum investment thresholds are required, I advise all our clients against participation. When I DO get a client waffling about the nature of the contemplated EB5 investment -- "Jose, I'm not sure if I'll do the hotel in the Keys or the car dealership or the whatever" -- I give them the same advice: follow your heart but use your head. Analyze the potential of the contemplated business- whether brand new or purchase of a going concern- with your CPA sitting by your side. Crunch the numbers and spend a few thousand bucks on a good market survey. Then, if all of that is okay, follow your dream. If that bed and breakfast for German tourists visiting St. Augustine is your dream, go for it. If you think your Mom's recipe for creme cheese flan is the greatest thing since peanut butter, market it. Just make sure you understand the financial risks and are willing to accept them. If so, love of your business and a sincere desire to learn and grow with your new U.S. enterprise will be the greatest asset you bring to the table. Enthusiasm is contagious, and you have to be excited about far more than the prospect of U.S. residency. You have to be prepared to labor and sweat over your new "baby", and many of the folks considering EB-5s are well off and comfortably retired in their home countries...are you sure you are up to building ANOTHER empire in a new, unfamiliar business culture?

I'll be honest with you: when we get our 5 or 6 potential EB-5s per month, I explore L-1 possibilities. If they are good, I almost always go that route. If they are childless or "empty nesters"- kids over 21 and gone- I may recommend E-1 or E-2 since they are, for practical purposes, "permanent" in the sense that there is no limit to the number of years in which you can remain in the category, as long as the business is prospering. (Besides, if they are planning to have kids, they will probably be born in the U.S. and be U.S.citizens anyway!)

But there are a few folks- the ones with a clear business vision... the ones for whom the risk of the investment is justified by the potential economic rewards...the ones whose kids are teenagers and getting close to 21- for whom the EB-5 is still the finest mechanism around. Provided the investment is sound, makes sense, and is both financially and operationally structured to address both the statutory AND regulatory language of the law, we can definitely get the approvals for the EB-5. Unfortunately, what was supposed to be a new avenue for entrepreneurial immigrants has turned into an elite club for those willing to jump through the unneeded hoops created by the INS.

If you are interested in exploring the feasibility of an EB-5 immigrant visa structure for you and your family and have the means to invest the threshold amount, please email your questions directly to me at:

jlatour@latourlaw.com  [UPDATED]

Please slug the subject line "EB-5 INQUIRY FOR JOSE" so it does not get filtered. (I'm not elitist in answering email...it's just that EVERYBODY sends everything to me and not one of the 13 others they actually need to speak to :-] )

Hope this was educational! Jose

PLEASE NOTE: THE INFORMATION CONTAINED IN THIS ARTICLE IS BASED UPON THE LAW, TERMINOLOGY, AND EB-5 SITUATION AS OF 1998.  IT IS NOT CURRENT INFORMATION AND SHOULD NOT BE RELIED UPON FOR VISA STRUCTURING PURPOSES!!