Laura Reiff and I traveled to Shanghai this past week to meet with various migration agents, investors and regional center project companies. Following a tour of our Shanghai office, we hosted a lively reception and dinner at the Langham hotel. Saturday night we attended a reception hosted by Artisan Business Group attended by various migration agents and investors.
The following summarizes impressions of the EB-5 market that we gained on the ground in China:
1. Demand for EB-5 visas by Chinese nationals shows no sign of a slowdown. This is due in part to the unavailability of the Canadian and Australian immigration programs previously widely used by Chinese nationals.
2. As demand for EB-5 visas increases, it is widely expected that the quota of 10,000 will be reached by next year. However, migration agents indicate that they expect demand to continue even in a retrogression scenario where visas may not be immediately available.
3. There is growing interest from investors looking for direct EB-5 investment opportunities. This is a result of increased scrutiny and issuance of RFEs by USCIS related to indirect job creation.
4. Investors and migration agents have expressed frustration at the slow down of petition processing by USCIS. Immigrant visa processing at the U.S. Consulate in Guangzhou continues to be relatively streamlined.
5. Given the proliferation of RFEs issued by USCIS, investors and migration agents are focused on I-526 approval. They believe once the I-526 is approved, barring a failure of the project due to unforeseen circumstances, that the I-829 will be approved.
6. Given the exponential increase in regional center projects, migration agents along with counsel are performing extensive due diligence prior to promoting a project.
7. Investors are becoming increasingly savvier in selecting investments and are concerned by issues that could be raised by USCIS related to tenant occupancy, job displacement and visitor spending.
8. Agents prefer to promote projects where:
- The EB-5 component does not exceed 50 percent
- Investors are given a first position
- The project includes some sort of government funding, credits or partnership
- In terms of return, investors are less interested in earning money on their investment — rather, they are looking for a “safe” investment where they can attain the green card and have all or a majority of their principal returned.
9. The primary goal of Chinese EB-5 immigration is to provide educational opportunities for the investor’s children, as well as develop new business opportunities for investors in the U.S.
10. An ever growing number of investors are interested in coming to the U.S. in a non-immigrant work visa status, such as H-1B or L-1 while their I-526 is in process, and subsequently applying for the green card in the U.S. through Adjustment of Status.
It was an extremely informative trip on many fronts, and we’ll continue to monitor and report on EB-5 issues in this part of the world as they develop.