Florida Lawmakers Meet with Chinese Migration Agents to Talk Immigrant Investor Program EB-5 Reform

WASHINGTON - June 28, 2013 - PRLog -- WASHINGTON, June 28, 2013 -- On June 18th, Florida Congressmen Alcee Hastings and Patrick Murphy met with several delegates representing the China 's Immigration Agencies to discuss short-comings with the current Immigrant Investor Program, otherwise known as the EB-5 program.

Since its inception in 1990, the EB-5 program was created by Congress to stimulate the US economy through job creation and capital investment by foreign investors.  The program, which is administered by the U.S. Citizenship and Immigration Services department, requires all EB-5 investors to meet specific requirements in order to qualify.  General criteria include investing a minimum of $500,000 to $1 million dollars in a new commercial enterprise that employs at least 10 full time jobs within 2 years. Other noted exceptions are outlined and may be found by visiting www.uscis.gov.

After two decades, Congress is set to discuss and formalize reform for the EB-5 program, in an effort to further stimulate job creation and economic growth in the US.  Jason Li of Cansine, Qiang Li of Fenghua and Kemin Deng, all EB-5 agents from China took the lead to initiate a working meeting with Florida Congressman last week to share some of the challenges identified by over 100 independent Chinese agents, all of which are currently participating in the EB-5 program.  The delegation which represents 70% of the Chinese EB-5 markets presented a paper to Congressman Hastings and Congressman Murphy that identified 5 key areas of improvement.  A summary of the primary points shared with the Congressman is as follows:

1.      EB-5 projects are managed by a regional center and not controlled by the actual investors. If the project fails to create enough jobs, green cards are revoked and applicants are required to leave the country.  The investors do not believe they should be penalized for project short comings. Instead there should be some attempt to remedy the situation to encourage investors to continue to take on the financial risk and liability when investing in the US.

2.      Currently EB5 projects are allowed to raise money without any evaluation or proper due diligence.  In order to mitigate risk and potential abuse, the investors suggest that all EB5 projects require a formal evaluation report which should be audited by a licensed, third-party. USCIS should only issue the permits to those that meet defined financial due diligence requirements. Once permits have been issued by the USCIS, EB5 projects can proceed to raise funds accordingly.  This step alone will help to legitimize the process and protect the assets of the parties involved.

3.      At the removal of condition and issuance of permanent Green Card stage (I-829 stage), if the job creation is not quite enough to meet the minimum standards, the investor should not be penalized. Instead, the regional center or developers should be held accountable and penalized accordingly. It is suggested that no matter how many jobs were created, the green card should be issued to the applicant as long as the investor is qualified.

4.      The investment money should be controlled by fund "controller" and the crediting bank manager should be considered one of the general project partners.  Today funds are distributed upfront. It is highly recommended that EB-5 money be dispersed as needed or through the life of the project by the fund controller. This control step will help protect against budget shortfalls and strengthen the fiduciary responsibility of the project managers.

5.      The filing date should be locked when the applicants submit the application for the first time to receive the filing number. If the EB5 project for any reason needs to be switched to another EB5 project due to a problem with the project, the filing date should not be changed because the age deadline is over 21 years old and cannot be qualified any more.

Both Congressman Hastings and Congressman Murphy were engaged in the discussion with the Chinese EB-5 delegates and agreed that further investigation was required to help champion positive reform for all parties involved.  Other attendees included Florida based fellow EB-5 participant, Dilip Barot.  The meeting photo includes from left to right, Kemin Deng, John Li, Jason Li, Honorable Congressman Alcee Hastings, Dilip Barot and Snehal Desai.

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