Wednesday, August 20, 2014

ABG client hosts project seminar in China

Artisan Business Group is proud to have Ohio client hosting seminars in Beijing, China during the past weekends. The developer has been busy traveling around northern China meeting with emigration agents and hosting project seminars. Multiple seminars were organized and hosted by leading emigration agents in Shanghai and Beijing. For more information on project consultation, contact us today at artisanbusiness@gmail.com.

Tuesday, August 19, 2014

USCIS Quarterly EB-5 Stakeholder Engagement- September 10th

U.S. Citizenship and Immigration Services (USCIS) invites you to participate in a stakeholder teleconference on Wednesday, Sept. 10, from 2:30–4 p.m. (Eastern) to discuss the EB-5 Immigrant Investor Program. During this teleconference, USCIS officials will share EB-5 Immigrant Investor Program updates and respond to your questions. To register for this event, sign up here.

Do I Need a Feasibility Study for My EB-5 Regional Center Project?

(Source: Phil Cohen) Feasibility studies are becoming more and more commonplace in the EB-5 world to prove the feasibility and plausibility of a given EB-5 regional center project.  This is especially true for larger projects but also for projects where feasibility studies are common, such as in the hotel business.

When things become common in EB-5, the community often starts to treat them as (essentially) expected by USCIS in order to be safe. Indeed, when it comes to increasing the professionalism of what is being presented for an EB-5 project, USCIS does follow suit as often as not. Indeed, some recent RFEs have asked for formal feasibility studies.

Using a feasibility study developed by a reputable source is the best form of market, competitive and overall plausibility analysis for the project in question, minimizing any reason for USCIS to respond with an RFE for these particular points. In our business we consider it a best practice and strongly recommend that our clients make the investment in these analysis reports where it is reasonable to do so.

Always seek to maximize your odds of success the first time when it comes to starting an EB-5 regional center and project application.  Follow the general rule of thumb for feasibility studies that if they are readily available or commonly used for a particular type of development then they should be attained for you project submission.  It can help to save processing time and money in the long run.  Of course, the added overall benefit is providing an extra element of credibility to your investors.
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Phil Cohen is the founder and President of Strategic Element, a company that focuses on developing regional centers, EB-5 business plans and custom 'direct' EB-5 projects for its clients.

Monday, August 18, 2014

2014 annual EB-5 China trade mission opens registration

The 2014 annual EB-5 China trade mission is now taking registrations, the delegation will be meeting with major emigration agents and participating in investment forum in Shenzhen and Guangzhou October 12-19, 2014. For more information about the program, contact us at artisanbusiness@gmail.com.

Sunday, August 17, 2014

Need EB-5 capital for Gas Oil and Mining Projects?

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

The one-day investment 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 US energy and natural resource industry is one of the fastest growing opportunities in the world and Chinese investment companies and individual investors see the opportunities for future cooperation. The United States will become the top oil produced in the world by 2015 according to the International Energy Agency. The IEA also predicts the US will be able to meet nearly all of its energy needs from domestic sources by 2035. 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. 

Industry expert speakers will be announced soon. Register today for early bird rates!

Saturday, August 16, 2014

ABG to host EB-5 Investment Roundtable event in Chicago

Artisan Business Group is hosting an EB-5 Investment Roundtable event in Chicago on September 23, 2014. The one-day event is by-invitation only. To learn more about inbound EB-5 investment, contact us at artisanbusiness@gmail.com.

Meet Chinese Emigration Agents: Guided Private Tours



Have a new EB-5 Project and need professional help getting started in China?
Let us take you to China for private meetings with emigration agencies!
We will assist you in cultivating relationships with top-level EB-5 agents!
Tours start every month-- Schedule Your Own Today!

Discover the full potential of your EB-5 project by utilizing the most comprehensive and personalized consultation available! Contact us at artisanbusiness@yahoo.com for details.

      7-10 Day Private Tour Includes:

·                   Personalized EB-5 project market entry advisory
·                   Self-designated destinations and itinerary
·                   Pre-departure business strategy and protocol orientation
·                   Guided business trip to multiple cities in China
·                   Individualized introduction with licensed emigration agencies
·                   One-on-one meetings with key emigration executives
·                   Assistance with travel and lodging arrangements in China

New EB-5 regional center additions

More EB-5 regional centers have been designated by USCIS in July and August.
  • Cal Pacific RC LLC (CA)
  • SPG Regional Center, LLC (CA)
  • EB5 Regional Center of America LLC (CT, NJ, NY)
  • Northeast Regional Center, Inc. (CT, DE, DC, MD, MA, NH, NJ, NY, PA, RI, VA)
  • EB5 Affiliate Network State of Georgia Regional Center, LLC (GA)
  • Tur Partners Metropolitan Regional Center, LLC (IL, IN, WI)
  • Nevada Investment Regional Center, LLC (NV)
  • L&L New York Regional Center, LLC (NJ, NY)
  • New York Green Hotel Regional Center LLC (CT, NJ, NY)
  • Carolina Growth Regional Center, LLC (NC)
  • Pacific Northwest Investment RC, LLC (WA)
  • Seattle Area Regional Center, LLC (WA)

Friday, August 15, 2014

To Do List for EB-5 Investors in the US

In addition to taking the risks with their EB-5 investment, immigrant investors usually have a quite impressive to do list after they receive their I-526 approvals and relocate to the US:

1) Buying a real estate, most Chinese investors prefer expensive homes in New York or Southern California, many homes are sold over $1 to $3 million dollars to these investors. Chinese investors are now the 2nd largest foreign buyers of US real estate.

2) Finding a good school for their children, many investors prefer private schools or private colleges for their children, school rankings are very important to Chinese investors. Chinese investors usually believe higher tuition reflects better quality of school. Therefore, Boston area is one of the top destinations for many children of Chinese EB-5 investors.

3) Buying cars, BMW and Mercedes Benz are usually the top choices for Chinese investors. Many families purchase two or more automobiles.

4) Sourcing professional services, many investors take time to learn and understand how American system works by hiring professional accountants, tax advisors, insurance agents, and others.

5) Choosing medical services, many investors usually prefer to use medical doctors who can speak their languages; they go to hospitals with bilingual staff. 

6) Starting a new business, a lot of immigrant investors want to explore new business opportunities in the places they reside. Such new ventures eventually hire local folks and create many jobs as well.

7) Exploring new investment opportunities, many foreign investors are eager to invest in the US after they become legal residents.  They bring in more investment capital to invest in American businesses which would generate more employment opportunities and create economic impact.

Hopefully these investors will receive I-829 approvals so that they can permanently have a new life in the US.To learn more about inbound investment, contact us at artisanbusiness@gmail.com.

Investment Funding Opportunities Under the JOBS Act: Title II

(Source: Jor Law) If you're an accredited investor or the owner of a small business, Title II of the Jumpstart Our Business Startups (JOBS) Act holds significant benefits for you in terms of investing and advertising for funding. The new regulations under Title II and Rule 506(c) of the Securities Act give investors and businesses the freedom to profit from or raise capital through private offerings involving general solicitation.  To learn more, log on http://verifyinvestor.com.

Positive Impact of Title II

In 2013, the formal implementation of Title II of the JOBS Act lifted the ban on general solicitation for small companies and startups. To adhere to the changes under Title II, the United States Securities and Exchange Commission (SEC) added Rule 506(c) of Regulation D, which outlines the sale and purchase of private securities between issuers and accredited investors in generally solicited private placements. Previously, businesses and startups weren't able to utilize any public advertising methods when conducting private placements, causing them to miss out on reaching many potential investors. With these new provisions now in full effect, business owners have the freedom to advertise for and obtain the crucial funding they need.

Advertising Publicly for Capital

General solicitation is the practice of using public mediums to solicit and advertise for investment capital. The Securities Act of 1933 placed a ban on general solicitation to combat the possibility of fraud. Before Title II of the JOBS Act and Rule 506(c) lifted the ban, the laws made it exceedingly difficult for business owners in need of investment capital to seek growth capital. Businesses and startups are now free to use any means of public advertising, such as crowdfunding sites, ads, social media, etc., when raising capital through a private placement.

Investor Advantages

While the ban was originally intended to keep investment scams at bay, it also negatively impacted opportunities for purchasers to build their portfolios. Now, because issuers are allowed to publicly solicit for funding while still engaging in private offerings, accredited purchasers have the freedom to invest in more businesses. Just as businesses have the opportunity to raise capital through general solicitation, investors benefit by having the ability to broaden their portfolios, support promising businesses, and earn more substantial profits.

Thursday, August 14, 2014

ABG sponsors the EB-5 SEC & FINRA Compliance Seminar

The EB-5 Resource Group LLC will be hosting the EB-5 SEC and FINRA Compliance Seminar in West Palm Beach Florida August 28, 2014. Artisan Business Group is glad to support the event.

It is the opinion of the host's and the majority of EB-5 stakeholders that there is general lack of consensus on EB-5 and SEC/FINRA Compliance. It is the Goal of this seminar committee to attempt to give our participants a solid and complete understanding of EB-5 Today and the risks and issues regarding EB-5 & SEC/FINRA. To learn more about the event and its speakers, and register your seat please log on http://eb5sec.eventbrite.com

Some of the topics to be discussed:
  • Is EB-5 recognized as a security by FINRA & SEC
  • Are the "exemptions"? (complete and thorough exemptions) 
  • If you have an exemption do you still need a Broker Dealer?
  • SEC vs FINRA ,Who does what
  • Types of Broker Dealers, and what type of BD that EB-5 participants need
  • How to get a BD to work with you
  • What/who qualifies as a Finder
  •  When a Finder becomes a Broker 
  • Legal Consequences
  • Why have several of the largest EB-5 purveyors engaged Broker Dealers
  • BD licensing needed
  • Legally compensating foreign agents and finders  
  • Understand the RISKS of EB-5 without Correct Compliance 

Wednesday, August 13, 2014

Ron Klasko's EB-5 Perspective: Correcting Another Misguided EB-5 Article

(Source: Ron Klasko) Add Fortune Magazine to the list of publications publishing one-sided tirades against the EB-5 program. I would have expected better of Fortune. Barely paying lip service to the hundreds of successful EB-5 projects creating tens of thousands of jobs, the article focuses on the thankfully aberrational example of the fraudulent Chicago Convention Center case. Focusing more than 80% of the article on a single fraudulent project that was stopped by the SEC 18 months ago is the epitome of old news – trying to make broad generalizations based on one fraudulent operator whose scheme was successfully thwarted by government oversight.

The purpose of this blog is not to defend the EB-5 program, which I have done on many occasions. Rather, the purpose is to correct the incorrect statements in the article, of which there are many. To state that “the EB-5 industry is virtually unregulated” is a gross inaccuracy. It may have been true some years ago; it is certainly not true today. USCIS now has a vast array of immigration adjudicators, securities lawyers, economists, and other professionals adjudicating the legal qualifications of investment projects and investors’ lawful source of funds. In addition, USCIS has made it clear that it has been cooperating with the SEC for more than two years, and anecdotal evidence has shown that this partnership is more than merely pretextual. The article states that “deal documents receive no SEC scrutiny and face little due diligence.” In fact, the deal documents are scrutinized by the SEC and face an exceptional level of due diligence by the USCIS and other agencies. USCIS vetting of projects generally goes beyond evaluation of the evidence provided by applicants, and frequently involves examination of the public record.

The article states that regional centers “usually charge a developer about 2% annual interest for at least five years.” I have been involved in many deals between developers and regional centers. While I cannot state that there has never been a regional center that has charged a developer 2% annual interest on all of the immigrant capital, I can state that, in my experience, many regional centers’ fees are significantly lower than that amount. 

The article states that a regional center “doesn’t have to report publicly on its performance, identify its principals, or disclose any financial, legal or regulatory problems they have encountered.” This is only partially correct. A regional center does have to file an annual compliance report, which is subject to public disclosure, with USCIS. This report does identify the principals of the regional center, as well as various aspects of its performance. Any changes in ownership must be reported within 30 days. Unfortunately, USCIS has not chosen to make this information easily accessible to the public, requiring instead the filing of a Freedom of Information Act request.

The article states that “Chinese agents typically conduct little due diligence.” Again, while the article may have been correct at some point in the past, it is not at all correct today. In my experience, most Chinese agents now conduct substantial due diligence on projects, often retaining firms like ours to perform the due diligence before they agree to take on the project.

Finally the title references the “Visa-for-Sale Program.” It might be stated correctly that many of the other countries in the world that compete for foreign investment dollars have a visas-for-sale program. Fortunately or unfortunately, the U.S. does not. The U.S. program requires at-risk investments that produce jobs for U.S. workers. This is very different than buying a visa. Rather, it is a classic example of a successful government program that attracts foreign investment dollars in a program that creates employment. One could certainly argue that there is at least as much or more benefit to the U.S. from an immigrant who invests money in the U.S. and creates jobs for U.S. workers as compared to an immigrant who takes a single job offered by a U.S. employer. There are many aspects of the EB-5 program that could be improved. Unfortunately, Fortune Magazine chose not to address them.

Tuesday, August 12, 2014

USCIS Invitation: Dialogue with USCIS Director León Rodríguez

(Source: USCIS) U.S. Citizenship and Immigration Services (USCIS) invites you to participate in a stakeholder teleconference on Thursday, Aug. 14, from 1:30 to 2:30 p.m. Eastern, with USCIS Director León Rodríguez. Director Rodríguez will introduce himself to the stakeholder community and listen and respond to issues of concern. We encourage you to submit questions in advance when you register for the event. Once your registration is processed, you will receive a confirmation email with additional details.To sign up, visit the USCIS registration page. 

Sunday, August 10, 2014

ABG announces 2014 Trade Mission for Oct. 12-19


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 12-19, 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 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 12-19 please contact us at artisanbusiness@gmail.com. Small group, sign up early!

Saturday, August 9, 2014

Meeting emigration agents in Beijing

Artisan Business Group has been busy hosting its clients in Beijing and organizing meetings with licensed emigration agents. Seminars will be held in Beijing and nearby cities for the clients and their projects.


Friday, August 8, 2014

Artisan conducts meetings in Beijing

Artisan Business Group is conducting meetings in Beijing with business professionals. To join Artisan on their 2014 EB-5 Trade Mission to southern China on October 12-19, contact us today at artisanbusiness@gmail.com.

Thursday, August 7, 2014

When to launch an EB-5 project

Launching an EB-5 project into the Chinese market is an influencing factor to the success of an EB-5 project. Timing is very important as there are many holidays and slow periods during the calendar year which can have negative effects on the momentum of selling a project. Traveling to China during any holiday is non beneficial for projects since all business is stopped and most staff members are traveling. Project developers should always try to avoid launching the promotion of a project right before a popular Chinese holiday such as New Year’s Day, Spring Festival, Qingming, May Day, Dragon Boat, Mid-Autumn Day, National Day, etc. Introducing projects right before national holidays will slow down any progress of a project as investors and emigration agents will take off extended time to celebrate the holiday. Many projects will be introduced shortly after major holidays such as Chinese New Year. Timing is very important! For advisory services on your EB-5 project, contact us today at artisanbusiness@gmail.com. 
Tiananmen Square decorated during National Day 2013

Wednesday, August 6, 2014

How Should Hotel Developers Go After EB-5 Financing?

(Source: Jim Butler- Jeffer Mangels Butler & Mitchell LLP) Although the EB-5 immigrant visa program has been around since 1990, the current trend of using this as a source of financing for hotel development began only three years ago. We worked on one of the first hotel EB-5 financings for the W Hotel and Residences in Hollywood, and have since worked on more than 60 EB-5 projects all over the country. Now, use of the EB-5 financing program has gone mainstream. Headline grabbers include the $400 million financing of the SLS Hotel in Las Vegas, the $100 million Ritz Carlton & JW Marriott in downtown Los Angeles and now the $1 billion Silverstein project to be built in New York City with a Four Seasons Hotel.

As a growing number of savvy hotel developers hurry to assess the EB-5 financing opportunity, they frequently receive conflicting advice as to the best way to pursue EB-5 financing. Many immigration lawyers and advisors tout the advantages of the developer forming its own regional center — basically to shave a few points off the all-in cost of EB-5 financing. Although this advice may work well for the EB-5 advisors (in that they get $100,000 or more of fees), for most of the hotel developers we know, forming a captive regional center is a bad idea. This article should provide a note of caution for developers considering this course. Based on our extensive experience with financing hotel development from EB-5 funding sources, we believe that the answer for most hotel developers will be to obtain “preferred” status for themselves and their projects — if they can do so — and to tap into the very best established EB-5 funding sources. 

Restricted capacity in channels for accessing EB-5 capital
As hotel developers compete in a very crowded field seeking EB-5 funding, there is something of a race to gain access to limited channels for tapping EB-5 capital. The restricted capacity is the limited bandwidth of the channels for accessing the pipeline of foreign investors. There is no shortage of EB-5 investors or developers seeking the capital. The channels for bringing the EB-5 investor money to developers have simply not been able to keep pace with the explosive growth. The problem is the limited capacity of the pipeline or channel for connecting EB-5 investor money with all the would-be consumers of EB-5 capital. As some indication of the explosive growth straining the existing capacity of the system, 126 visas were issued under EB-5 in 2004 and that number is expected to approach the maximum statutory limit of 10,000 visas in 2014. Most of that growth has occurred in the last three years.

Explosion of new regional centers — most of which have no fund-raising experience
Along with EB-5 visa issuance, the number of regional centers approved by the USCIS has exploded over the past ten years from 10 to more than 532 as of July 1, 2014 according to official USCIS listings. And more than 300 of those regional center approvals were issued in the last two years. We believe that less than 10% of the approved regional centers have successfully closed financings totalling more than $5 million. But all of these regional centers are potentially offering their services to investors hungry for EB-5 capital.
A regional center approval from the USCIS is akin to a license to participate in the EB-5 chain of capital raising. It is only the first step in a long and difficult process of establishing a successful capital-raising machine. While status as an approved regional center enables increased job count for projects handled by the center (by counting direct, indirect, and induced jobs), it does not confirm any ability or experience in raising funds. And the strongest regional centers that have successfully closed EB-5 deals, have been committed to the business for years. These veteran organizations have established and maintain a regular operating presence in China, built a strong and permanent marketing organization in China, grown investor demand for their offerings based on their track record of getting visas for investors, and have regularly delivered funding on their promises.

Daunting hurdles for new regional centers
Newcomers to EB-5 funding find competition with the established regional centers to be daunting. The EB-5 investors want to know the track record of the regional center marketing a project. What percentage of their investors have gotten their green card? How many have failed? How many have been deported after moving to the US? The best marketing agents to present projects to investors want to work for the best and most established regional centers. Why should they try to compete with established track records, duplicate organizational structure, and teach someone about the business? It is difficult to recruit, train and oversee talented marketing agents, particularly in an increasingly regulated environment where the US securities and exchange commission continues to impose new requirements on top of all the complexities of immigration laws. In short, there are too many regional centers already, and most of them have no organization or proven ability to raise EB-5 financing, much less to do so in a timely, cost-effective or reliable way.

Warning! Forming a regional center means getting into the immigration business
Many developers are being led to form a regional center because of bad advice. This approach should be selected only by those developers who cannot qualify for the “preferred” status or those who genuinely want to get into the immigration business for other reasons. This path should not be chosen to save a few percentage points in the cost of funds or in the mistaken belief that it is an easy path to follow. Perhaps an example will help. In the heyday of real estate syndications (selling limited partnership interests to raise capital to buy commercial real estate), syndicators often started raising capital among their family, friends and business associates. But as more deals came, and as the capital recruit acquired grew larger, the syndicators usually ended up going to regional brokerage firms to raise their capital. In one sense, the capital was “expensive.” The cost of using such brokerage firms often ranged up to 8% of the offering proceeds. But the use of professional securities salesmen permitted the syndicators to focus on their core business of identifying great real estate investments, adding them under contract, repositioning them, and managing them profitably. Perhaps one syndicator in 100 – or maybe one in 1000 – decided to take over the capital raising function by forming a captive brokerage firm. This was really an entirely different business from the core real estate business of the syndicator. It has unique capital requirements, licensing issues, regulatory compliance, liabilities and costs. Most real estate investors were well advised to stay out of the investment banking/capital raising business.

The same considerations apply to a developer looking at EB-5 financing. If the developer cannot qualify for “preferred” status, to a greater or lesser extent the developer may find itself getting into the immigration business. The developer may form a regional center, or will seek to identify regional centers to rent or otherwise cobble together with marketing agents and other compliments of the EB-5 capital raising chain. This is a difficult, time-consuming and somewhat risky course to set unless the developer fully understands the nature of the commitment, effort and capital likely to be required. This is not for the faint of heart.
The developer will be competing with a handful of dominant players who have been established for years. They have spent a vast amount of time and money to build their presence in China, along with their marketing organization, infrastructure, systems, forms and reputation amongst the EB-5 investor community.

A few final words on developers forming their own regional centers
An extraordinarily high percentage of developers who initially believe they want to build their own EB-5 infrastructure will ultimately abandon their path. Although we can help clients pursue this path with any or all of the steps it takes, developers need to understand this alternative involves setting up an entirely new business – the immigration business. It takes a long time to get regional center and project approvals, and even longer to push projects all the way through the EB-5 pipeline so that you can show new investors that all your prior investors got their green cards. Most of our clients find that it is far better to connect with and rely upon well-established major players in the EB-5 financing chain. We serve as Counselors to assist them through this process.

Tuesday, August 5, 2014

Artisan conducts meetings in Shanghai

Artisan Business Group is conducting meetings in Shanghai with investment and business professionals. The meeting was focused around investment opportunities in China and the United States. There continues to be greater amounts of Chinese investment into the United States as the Chinese economy grows and individual wealth increases.  

Why Size Matters

One important aspect of an EB-5 project is the size of the EB-5 raise. The Chinese market for EB-5 investors is very hot with projects of all different sizes. If you are a project developer needing only 5-10 investors, your project may be too small. But if you looking or 150-300 investors, your project size may be too large. Most Chinese emigration agents prefer projects in the 40-80 investor range or around 20-40 million dollars. This would be the perfect size for the majority of emigration agents. Projects larger will have to work with one of the largest companies and pay higher fees or else the project will not be sold. Projects smaller will work with small agents in smaller markets and will have to contribute greater efforts to the marketing process. For project developers to be most efficient with their EB-5 raises, it is important to understand why size matters.