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EB-5 News, Law & Developments
Timely news in EB-5 and related areas all in one place!
A good article on the Chinese EB-5 agents' response and concerns regarding the recent "Johnson Letter" issued by the Homeland Security
If you wish to find out more about what this "Johnson Letter" says, the below article provides good info:
I didn't even know the above article was a change by USCIS. We thought USCIS ALWAYS took the above position. A third party allowing the EB-5 petitioner to use his or her real property as a collateral sounds "fishy" to me. I mean, it's understandable why USCIS has or is taking this position.
It might be that some USCIS examiners might have mistakenly allowed a third party to "gift" their real property as a collateral for a loan to be used by the EB-5 petitioner, but it's at least understandable why USCIS is taking this position.
So says an AILA memo issued on May 6, 2015. Some of more pertinent languages of the Memo are copied below in full.
1. "However, many people are not aware that even if the offering of EB-5 investment securities is exempt from registration, anyone who sells EB-5 investments must comply with the SEC registration requirements for broker-dealers. Under Section 15(a) of the Securities Exchange Act of 1934, only registered broker-dealers can solicit investors. If immigration attorneys receive a fee for referring clients to EB-5 regional centers, they are subject to the registration requirement. The SEC generally considers anyone who receives transaction-based compensation to be a broker-dealer who must be registered or associated with a registered broker-dealer."
I-526s: 14.5+ months.
I-829s: 12+ months.
Some practitioners and investors might be dead by the time their cases are adjudicated. Seriously.
Without Chinese EB-5 cases, the EB-5 market will be dead.
We see following continuing problems with EB-5 Programs which USCIS has not yet solved, although USCIS keeps on stating that it is making efforts to address.
1. I-526 adjudication processing time is way too long. Over 14 months for non-pre-approved cases causes all kinds of problems. Even pre-approved EB-5 projects takes over 1 year. This is the number 1 problem. Some argue that EB-5 Program is full of fraudulent cases. In my opinion, this is completely false. I would say the EB-5 requirements are very onerous and hard to deceive USCIS, a lot harder than labor certification cases, marriage-based cases and NIW cases.
2. Limited EB-5 visa numbers which creates problems for Chinese EB-5 cases.
The below USCIS link contains the list of all Regional Centers, including the list of all terminated Regional Centers.
Hint: Divide by 3 (approximate number of family members immigrating per each EB-5 case) to arrive at approximate EB-5 cases because each immigrating family member is allocated 1 immigrant visa for each EB-5 case. Essentially, Chinese EB-5 cases comprise over 85% of all EB-5 cases, which is another way of saying without Chinese cases, the EB-5 market will be dead. Therefore, if USCIS ever shuts down Chinese market, there will be no EB-5 market and no businesses for Regional Centers.
During fiscal 2014 year, USCIS approved 1603 I-829 cases and denied 178 cases. This represents approximately 10% denial rate, or conversely, 90% approval rate.
USCIS is planning to host the EB-5 Immigrant Investor Program: Stakeholder Engagement hosted by USCIS on December 5, 2014 at 1:00 pm (Eastern).
We will post any info obtained soon after.
U.S. Citizenship and Immigration Services (USCIS) invites you to participate in a stakeholder webinar on Wednesday, July 30, 2014, from 3:30-4:30 p.m. (Eastern) to learn more about the usability and functionality of the new USCIS Electronic Immigration System (USCIS ELIS) Form I-526, Immigrant Petition by Alien Entrepreneur, and the document library.
During this webinar, USCIS will demonstrate this functionality and provide tips on using USCIS ELIS features.
The USCIS ELIS Form I-526 allows customers to:
Submit their petition electronically,
Upload evidence, and
Track case status in real-time.
BEA announced the following recently:
"The Bureau of Economic Analysis plans to release in 2015 a modified economic model to replace the original Regional Input-Output Modeling System (RIMS II). Cost savings will be realized because the modified model will be updated less frequently.
Much like RIMS II, the modified model will produce regional “multipliers” that can be used in economic impact studies to estimate the total economic impact of a project on a region.
However, the modified model will be updated with new input-output (I-O) data only for benchmark years. That is — years ending in two and seven. The modified model will become available to customers in 2015 and incorporate 2007 benchmark I-O data and 2012 regional economic data.
Seems like the procedure has become more liberal.
With over 450 designated RCs trying to capture less than 3,500 EB-5 cases per year, the EB-5 has become a very competitive area. There are currently more SEC restrictions than most RCs are aware or can reasonably follow, and it appears most EB-5 clients are retained outside the United States intentionally.
While the demand has increased and the outlines of the EB-5 law has been clarified, the processing times for I-526 and I-829 cases have not improved all that much.
We would say around ten RCs still capture over 80% of the EB-5 cases out there, 85% of which are from China. Without Chinese EB-5 cases, the EB-5 area would be dead, and USCIS would have to lay-off most of its trained EB-5 staffs.
USCIS' own official website for EB-5 Program, including a list of all designated Regional Centers, is located at:
U.S. Citizenship and Immigration Services (USCIS) invites you to take part in a teleconference on Wednesday, February 26, 2014 from 1:30 p.m. – 3:00 p.m. (Eastern) to discuss the EB-5 Immigrant Investor Program.