Thursday, July 24, 2014

Report from China: what happens in Chinese EB-5 market

While USCIS approves more new EB-5 regional centers (over 700 approved EB-5 regional centers around the country now), the approval rates for I-526 and I-829 are dropping according to a recent information released by the USCIS. Chinese investors are struggling to identify the right projects for them even there are almost a hundred EB-5 projects available in the marketplace. The recent suspension of Youhuitong (wire transfer service by Bank of China) is certainly not helpful.  It has caused major issues for many Chinese investors who are going to wire their funds to the EB-5 projects escrow accounts.  The conflicts between the largest state controlled media CCTV and the largest government tied financial arm Bank of China has reflected current political instability in China. Mr. Xi's campaign against corruption is intensifying. Chinese investors are certainly aware of the changing climate and trying to fully prepared before the Chinese visa quote retrogression kicks in next year.For more information about EB-5 program and Chinese market, contact us at artisanbusiness@gmail.com.

Report from China: Chinese government takes action to clean up "naked officials"

Naked official (luoguan in Chinese) refers to Communist Party of China officials who stay in China while their spouses and children reside abroad. The Chinese government is setting up stricter monitoring systems to decrease the practice. In January 2014, the Central Committee of the Communist Party of China for the first time issued a regulation which stipulated that luoguan are not eligible for promotion. It is reported by Chinese government controlled media that coastal provinces such as Fujian Province and Guangdong Province found the large number of "naked officials."  In Guangdong alone, about 900 (mostly mid-level) officials have been identified, and government is taking action to clean them out of important positions. According to a recent report by China Daily, Luoguan are widely believed to be a high-risk group when it comes to corruption because the permanent residency of their family members abroad can create a convenient channel for them to transfer their illicit earnings overseas and possibly flee the country before being arrested. It is also reported by Chinese language media that many naked officials' family members (including spouses and children) are believed to reside in the US.

Wednesday, July 23, 2014

Ron Klasko's EB-5 Perspective: Preparing for the I-829 Before It's Too Late

(Source: Ron Klasko) I recently participated in a national webinar sponsored by NES, the largest EB-5 escrow administrator. The webinar focused on I-829s, and my presentation was entitled “Preparing for the I-829 Bubble”.
I stated at the time, and I will restate now, that the readiness of regional centers and project developers for the I-829 process is one of my most serious concerns for the future of the EB-5 program. It is the reason that our law firm has developed a compliance group within the EB-5 team. But more on that later.
Until very recently, the I-829 process was the province of direct EB-5s and a small number of regional centers which had investors in projects as far back as 2008 or 2009. The group of active regional centers at that time was extremely small and tended to be larger regional centers with in-house staff prepared for the onerous task of auditing and preparing the documentation necessary for the condition removal process.
As more and more regional centers were approved, including smaller and less well-staffed regional centers, the number of projects and investors attached to regional centers that have never gone through the I-829 process have increased. One can only hope that these regional centers and project developers are prepared for the major task that is the condition removal process.
Regional centers have to decide no later than when their first investors are approved how they want to handle this process. Do they want to do everything in-house? Do they want to outsource? Do they want their law firm to handle it? Do they want to hire an audit firm? The time of condition removal is way too late to make these decisions.
It is best if the audit process for the I-829 starts long before any investors are approved. The process of monitoring and documenting the investors’ flow of funds should commence when the investors invest. The process of monitoring construction expenditures should commence whenever the construction commences.
There are two main aspects to the condition removal petition. One is documenting that each investor made the investment and sustained the investment in the new commercial enterprise. Regional centers must have a system to trace the money from the investor to the escrow account to the new commercial enterprise and ultimately to the project. Regional centers and project developers need to either develop their own software to track this information or else buy the software or outsource the process.
Usually the biggest issue is documenting job creation. In most regional center projects, especially loan model projects, there are no direct jobs. Documenting indirect and induced jobs is a matter of documenting inputs to the economic report. For construction jobs, this means documenting construction costs, certain soft construction costs and furniture, fixtures and equipment. For operations jobs, this may mean documenting revenues, occupancy, direct employees or other inputs that the economic report utilized.
If all of the inputs were met or exceeded, there is no need for an additional economic report. However, if any of the inputs were not met, a new economic report may be necessary to determine how many indirect and induced jobs were created given the actual expenditures, revenues, etc. It is not necessary to prove that the jobs were created exactly as planned or that all of the inputs to the economic model were achieved. It is only necessary to prove that the necessary number of jobs were created, even if that is proven on a completely different basis.
We have seen in our practice interesting issues relating to construction timeline. There can be problems if construction is longer or shorter than planned. If the construction was projected to last more than 2 years, which resulted in the ability to count direct construction jobs, and the construction actually lasted less than 2 years, direct construction jobs cannot be counted at the I-829 stage. This can cause a big problem. On the other hand, if the construction timeline was projected to take less than 2 years, and it actually took more than 2 years, direct construction jobs can be counted, which can make up for a shortage of operations jobs. However, if the elongation of the time period was the result of extended periods of time during which little or no construction was taking place, questions might be raised.
I mentioned above that our firm has developed a compliance group to deal with these issues. In some cases, this group provides ongoing support to regional centers and project developers who are performing these functions in house. Other clients choose to outsource this function either to an auditing firm or to our law firm. In either event, our firm stays actively involved because the burden falls on us to actually prepare the I-829 template for all of the investors in the project. It is highly inadvisable for a regional center or a project developer to expect our firm or any other firm to be able to take raw, unreviewed and unmonitored data and turn it into an I-829 template on short notice.
Finally, regional centers and project developers have to understand that the I-829 process is a sequential process, meaning that the 21 to 24 month window opens for each investor on a different date. Investors and their attorneys are very eager to have their I-829 petitions filed as close to the beginning of the 3 month window as possible. The staggered filing dates can actually come in handy in situations where all of the necessary expenditures or revenues or direct jobs have not been created at the time that the first investor must file. However, when that is the case, the data must be monitored investor-by-investor to show which investors got credit for which jobs.
Thorough documentation, advance preparation, and providing regular updates to the law firm and to investors are key components of a plan to ensure that the I-829 bubble does not burst.
For questions or comments relating to this perspective, please contact author H. Ronald Klasko, Esq. at rklasko@klaskolaw.com.

Tuesday, July 22, 2014

Pathways Welcomes The Northeast Regional Center

(Source: Pathways EB-5, Inc.) Pathways EB-5, Inc. announced today that the Northeast Regional Center has officially opened its business platform. The USCIS approved designation letter for Northeast Regional Center, Inc., was issued on July 21, 2014.  The Northeast Regional Center extends from Rhode Island and continues all the way to Virginia.  It includes some of the most popular cities in the U.S, such as Boston, Philadelphia, Baltimore, New York and Washington D.C. Its purpose is to create pathways for investors, developers, and brokers in the EB-5 space matching investor capital with proven developer capital needs.

Pathways CEO Jeff Campion says: “We feel humbled and blessed with the approval of NERC.  NERC is a vision of Pathways and is the next step in our mission of partnering with proven EB-5 developers throughout the major US population areas to provide access to EB-5 capital”.



The EB-5 program requires that investors invest at least $500,000 and create ten (10) full time U.S. worker jobs from the investment.  

Company officials are meeting with local developers this summer in the New York and Boston area to discuss projects and opportunities in the Region. Pathways officials expect these meetings to improve investor confidence and widen its customer base for projects that minimize risks and maximize dreams for investors and developers.

Monday, July 21, 2014

EB5Investors.com and EB5 Investors Magazine host 2014 Southern California EB-5 Conference

EB5Investors.com and EB5 Investors Magazine are hosting 2014 Southern California EB-5 Conference at the Balboa Bay Club & Resort in Newport Beach, California today. U.S. Congressman Bob Goodlatte, Chairman of the House Judiciary Committee with legislative oversight on the EB-5 visa program, will return as a keynote speaker. U.S. Congressman Darrell Issa will additionally be on hand as a keynote speaker of the workshop, to discuss the EB-5 program and his proposed SKILLS Visa Act. The third annual Southern California EB-5 Conference features several panels providing the latest information about the EB-5 visa program. Panelists include industry experts from successful regional centers, immigration and securities law firms, and leading EB-5 economists, among others. For more information, please log on http://www.EB5Investors.com

Friday, July 18, 2014

2014 China-US Energy and Natural Resources Investment Conference announced


2014 China-US Energy and Natural Resources Investment Conference is scheduled in Dallas, Texas on October 22, 2014. A good number of investment firms and executives from China are expected to attend the one day conference where US energy, oil and gas drilling, and mining executives will be exploring investment capital (private equity and EB-5 investment) and JV partnership opportunities with its’ Chinese counterparts.

The one-day conference will focus on how to attract foreign investment into the US energy and natural resources industry. Expert speakers from the energy and natural resources industry and international capital markets will share their experience of how to facilitate private investment from China. The 2014 China-US Energy and Natural Resources Investment Conference is open to professionals from the energy and natural resources industry, private equity, investment banking, mergers & acquisition lawyers, investment & security attorneys, and international wealth markets.

Thursday, July 17, 2014

Event Notice: 2014 World's New Residential Landmark Awards Ceremony & Exhibition (Shanghai)



The 2014 World's New Residential Landmark Awards Ceremony & Exhibition (Shanghai) hosted by Sina Haiwai will be taking place at the World Trade Exhibition Center, #99, Xing Yi Road Shanghai September 12-14, 2014. This annual event offers unique opportunities for real estate related EB-5 projects to be showcased in Chinese market.  If you are interested in having your investment project noticed and leading the market, you won't want to miss this show. For more information about program details and sponsoring opportunities, please contact us at artisanbusiness@yahoo.com.

Wednesday, July 16, 2014

China Trade Mission brings funding opportunity closer to EB-5 projects - join us in October

Acquiring project funding can be a challenge, especially for new kids on the block. This is where we can help!  The 2014 EB-5 Business and Investment Exploration Delegation organized by Artisan Business Group will be traveling to the cities of Shenzhen and Guangzhou in Southern China to meet with our established business partners in the region October 5-12, 2014. The cornerstones of our past successes have always been thorough market research, almost 2 decades of business experience with the Chinese, and creating win-win scenarios with our business liaisons by aligning actions with values. Investing in a trade-mission trip gives one high-odds of finding a compatible investment and business partners while also providing a unique opportunity to experience Eastern culture from the comfort of the luxurious hotels we will be residing in while abroad. Our Trade Missions to China will continue to provide American businesses new access and comprehensive insight into the dynamic Chinese market - including its scale, diversity and potential. At the Artisan Business Group we promise expertise in identifying and setting appointments with business partners (including EB-5 emigration agents) that will meet your prospect criteria. We help our clients with developing insight into China's business culture and social etiquette. We do this to better avoid misunderstandings that could scuttle deals and harm working relationships. Attending a Trade Mission with us also carries the benefits of pre-mission assessment of the Chinese market, in-country briefings, travel logistics, group transportation, interpreters, day-by-day itinerary, and hotel accommodations. For more information about our 2014 trade mission to China on October 5-12, please email us at artisanbusiness@gmail.com or call 217-899-6661 for details. Small group, sign up early!

Tuesday, July 15, 2014

Quick update on EB-5 Chinese market

(Brian Su) I have just completed a 20-day fact finding trip to China last week. In the three week, I met various emigration agents in Hong Kong, Shenzhen, Zhuhai, Guiyang, Hangzhou, Chongqing, Chengdu, Shanghai and Beijing.  I also had opportunity of meeting with US project representatives in Shanghai. Based on the meetings with emigration agents, it is very clear that the majority of Chinese investors continue to choose USA as their number one destinations rather than other smaller European countries. There are nearly one hundred EB-5 projects available for agents and investors, and real estate projects dominate the marketplace. Senior housing projects such as assisted living memory care facilities and senior apartments are gaining popularity.  Smaller projects ($10-20 million dollar EB-5 raise) are usually attractive amongst smaller emigration agents. Projects with I-526 approvals or exemplar approval would get a lot more attention.  However it is very challenging for EB-5 project developers, especially new regional centers, to establish solid relationship with emigration agents.  Chinese emigration agents and investors are very concerned about possible China EB-5 quota backlog which may delay petition process for Chinese investors in 2015. Some agents also complained slow process for direct EB-5 petitions as more Chinese investors are investing in direct investment opportunities such as chain restaurants. 

Based on the observations, it is expected more investors sign up the EB-5 program before the end of 2014. The next six months might be the best timing for new projects to enter the Chinese market.  Another incident last week is Bank of China suspended the money transfer service "Youhuitong" and may have caused delay for some investors who want to wire their investment funds overseas.  For more information about conducting business in China, contact us at artisanbusiness@yahoo.com.

meeting with emigration agent in Chongqing

Saturday, July 12, 2014

Report from China: Bank of China denies money laundering

According to a news report by China Central Television (CCTV) on July 9, 2014, the country’s largest foreign exchange bank Bank of China has frequently allowed wealthy customers to transfer as much money as they want overseas.  Bank of China immediately denied helping to launder money for people planning to emigrate by ignoring the annual cap on foreign exchange for individuals. To see news report, log on South China Morning Post at http://www.scmp.com/.

Friday, July 11, 2014

Sheldon Adelson, Warren Buffett and Bill Gates on Immigration Reform

Sheldon Adelson, Warren Buffett and Bill Gates express their point of view on immigration reform issues, check it out on New York Times at http://www.nytimes.com.

Thursday, July 10, 2014

Artisan Business Group hosts EB-5 Workshop in NYC/NJ

Artisan Business Group hosts the Accelerated EB-5 capital raising workshop in NYC/NJ on July 10th. Over 30 project developers, attorneys, regional centers and Chinese emigration agents attended the event from Texas, California, Washington, Tennessee, New York, New Jersey, Florida and China. The EB-5 workshop offered an interactive event for participants and topics focused on structuring competitive offerings, China market trends and how to supercharge overseas capital raise.  Contact us at artisanbusiness@gmail for our next event.

Tuesday, July 8, 2014

Artisan Business Group visits new EB-5 project in Cleveland

Brian Su traveled to Cleveland, Ohio to visit a new project on-site with Chinese emigration consultants. Artisan Business Group is working with Richman Brothers Senior Living LLC and local EB-5 regional center to utilize EB-5 immigrant investor program for a new assisted living project in Ohio.  Contact us at 217-899-6661 for information on EB-5 program.

Sunday, July 6, 2014

ABG advises new senior living project

Artisan Business Group is working with Richman Brothers Senior Living LLC to utilize EB-5 immigrant investor program for a new assisted living project in Ohio.  Artisan Business Group has advised a number of senior housing and assisted living projects around the country. To learn more about EB-5 program, contact us at artisanbusiness@gmail.com.

Saturday, July 5, 2014

Senate confirms Leon Rodriguez as new USCIS director

The U.S. Senate met on June 24th to vote for the new U.S. Citizenship and Immigration Services (USCIS) director. The U.S. Senate confirmed President Obama’s nomination, Mr. Leon Rodriquez, to become the new director of USCIS. Rodriquez was previously the director of the Office of Civil Rights at the Department of Health and Human Services. As the new director of USCIS, Mr. Rodriquez will oversee the EB-5 Immigrant Investors Program. President Obama nominated Mr. Leon Rodriquez last year to replace Mr. Alejandro Mayorkas as director of USCIS. Mr. Mayorkas was promoted to deputy secretary of Department of Homeland Security. We look forward to working with Mr. Rodriquez to continue the improvement of the EB-5 program. 

Friday, July 4, 2014

Agenda announced for Accelerated EB-5 Capital Raising Workshop

The Agenda for The Accelerated EB-5 Capital Raising Workshop in Newark, NJ on July 10th is below. Limited Seating is available. To register for the event, log on to nyeb5.eventbrite.com. 


8:30- 9:00 am
Check in and Registration















9:00- 9:30 am
Introduction and Welcome







Brian Su, Artisan Business Group














9:30- 11:00 am
EB-5 Business Plans & Econometrics






Jeffrey Carr, Economic & Policy Resources














11:10- 12:20 pm
Current SEC trends & Benefits of Direct EB-5 & RC projects


Clem Turner, Homeier & Law, P.C














12:30- 1:30 pm
Luncheon, Networking














1:30- 2:40 pm
I-526 Petition Preparation &Tax Issues






Shaun Ye & Jun Yan, REID & WISE, LLC














2:50- 3:50 pm
How to select the right EB-5 project to market & market update



 Brian Su, Artisan Business Group
 Johnny Chang, Westlead Capital






Jeff Carmichael, RockBridge Senior Living Communities












3:50- 4:00 pm
Questions
















Subject to change without notice; see update at http://www.EB5NewsBlog.org.