Industry authorities predict that in 2015, the U.S. investment immigration program will face three major crises: visa backlogs, price increases, and the expiration (or policy changes) of the Regional Center Program. How should investors respond to these three crises? In an unpredictable investment environment, how can investors take the initiative, shift from passive to active, and rationally select EB-5 projects? This is a critical issue that every investor will face.
(I) The Three Major Crises Will Bring Three Negative Impacts to Investors
First, investors will face longer waiting times.
According to official statistics from U.S. Citizenship and Immigration Services (USCIS): Currently, applications for the U.S. EB-5 investment immigration program continue to surge, with a backlog exceeding 10,000 applications for three consecutive months. The alarm for visa backlogs is sounding, and by the spring and summer of 2015 or even earlier, Chinese EB-5 investors will officially enter the era of visa backlogs. Especially after Canada and Hong Kong successively suspended their investment immigration programs, many wealthy individuals have shifted their immigration goals to the currently more cost-effective U.S. investment immigration program, which undoubtedly makes the path to U.S. investment immigration more congested. This means that investors will need to wait much longer; even delaying the submission of application materials by one month could potentially result in an additional six months of waiting in line.
Second, the pressure and risks for investors will increase.
Industry forecasts suggest that the current $500,000 investment in a TEA (Targeted Employment Area) will rise to over $900,000 in 2015, and the $1 million for non-TEA areas will rise to over $1.8 million. This means investors will need to invest $400,000 more than before, which undoubtedly significantly increases the pressure on proving the source of funds. Furthermore, the psychological threshold for investors—who must be able to afford the loss of the entire investment without affecting their daily lives—will also be raised accordingly to a $900,000 investment risk.
Finally, the difficulty of explaining the source of funds will increase accordingly.
The additional $400,000 on top of the $500,000 also requires proof of the source of funds. After the EB-5 investment price increase, the corresponding work and difficulty in preparing the explanation for the source of funds will certainly increase as well.
(II) How Can Investors Shift from Passive to Active?
First, remember that the project is king; selecting the right project is fundamental.
As is well known, the two fundamental risks of the U.S. EB-5 investment immigration program—investment risk and employment risk—both stem from the project itself. Therefore, project selection is the prerequisite and foundation for an investor's success. How should investors choose a project? This depends on the investor's investment goals and motivations. Generally, investors hope to obtain U.S. permanent resident status by choosing an EB-5 project. While ensuring the successful acquisition of a U.S. Green Card, they naturally hope to achieve the best balance between investment returns and lower risk. From this perspective, a rational and prudent approach for investors is to choose government projects that have already been approved by the immigration authorities. Because government projects possess powerful advantages—such as high credibility, lower risk coefficients, high transparency, and sound supervision—they are precisely the best fit for the psychological needs of investors who prioritize the best balance between investment returns and lower risk.
Second, focus on fully verifying project facts and evidence.
Investors can conduct multi-faceted, authoritative verification and comprehensive comparisons of the promotional facts and evidence involved in the projects they are considering, based on personal research, objective media evaluations, and professional third-party assessments by authoritative institutions. Among these, the three major international rating agencies (S&P, Moody's, and Fitch) are internationally recognized risk investment rating agencies. They use professional talent, specialized databases, and professional assessment methods to make comprehensive evaluations of the subject's asset status, debt situation, repayment ability, and performance credit.
These rating agencies have already made objective ratings and detailed quantifications of the borrowing institution's debt situation and repayment ability. For projects with rated borrowing institutions, one can clearly understand the borrowing institution's debt and repayment ability by looking at its credit rating. Currently, the rating reports from the three major international rating agencies have become important references for governments, investment institutions, and individual investors in making EB-5 investment risk decisions.
Third, use legal documents to constrain key links, protect investor interests, and minimize various risks to the greatest extent possible.
How can investors constrain key links through legal documents? Generally, investors can work in the following two major areas:
1. Choose EB-5 projects with sound capital release supervision mechanisms.
Although U.S. immigration law stipulates that EB-5 investment is a risky investment, the EB-5 program allows investors' funds to be safe before the I-526 application is approved. The specific practice is to set up an EB-5 capital escrow account, where investors deposit their investment funds into the escrow account before submitting their immigration application. The escrow agreement must stipulate that the investment funds can only be released after the investor's I-526 application is approved, and if the I-526 application is denied, a full refund must be issued. This is known as the "safety valve" for EB-5 funds, ensuring that the funds are under safe bank supervision before the I-526 is approved.
Therefore, if a project does not have a bank escrow account, it is difficult for Chinese investors to accept it. More and more investors will also abandon projects without complete escrow accounts. So-called incomplete accounts are those where an escrow account is nominally established, but the escrow agreement allows the project party to use the investment funds in advance before the investor's I-526 application is approved. This situation often occurs because the project is overly dependent on EB-5 funds. In fact, the more a project relies on EB-5 funds, the more it lacks money, and therefore the risk is greater. Undoubtedly, investors who choose safe, authentic EB-5 projects with sound capital release supervision mechanisms can significantly reduce their investment risks.
2. Utilize third-party contracts from intermediary agencies for protection.
In addition to choosing EB-5 projects with capital release supervision mechanisms, investors can also fully protect their rights and interests through third-party contracts and the professional teams of intermediary agencies.
As a leading brand in the U.S. immigration industry in China, Worldway Group has focused on the philosophy of selecting premium projects for 18 years. Through strict review methods and the use of various protective measures, it has selected the most investment-worthy, lower-risk U.S. EB-5 investment immigration projects for the vast number of investors, realizing the American immigration dreams of thousands of families. Worldway Group has pioneered numerous historical precedents in the U.S. immigration industry and is better adapted to the "project is king" new normal during this critical period of U.S. investment immigration in terms of project selection and the ability to reasonably reduce risks.
The Worldway analysis team fully considers the actual needs of investors. From the perspective of selecting premium projects for investors, they provide investors with an "Essential Interpretation" based on project offering documents. From the perspective of senior professionals, they objectively organize the project's EB-5 "three-pass" protective measures, as well as the sources of these measures and clauses. In short, through third-party contract protection, Worldway provides a full interpretation of the constraints involved in the contract clauses, maximizing the protection of investors' investment safety.
Finally, seize the investment opportunity and act quickly after identifying a good project.
1. Recognize the investment situation and development trends, and choose projects that have already been approved to alleviate the interference of visa backlogs.
Since the U.S. Citizenship and Immigration Services (USCIS) issued its deference policy on May 30, 2013, projects that have already received I-924 pre-approval from USCIS have naturally been sought after by investors. If a project receives pre-approval from USCIS at the I-924 stage, USCIS will grant deference in the subsequent I-526 and I-829 stages. Clearly, such projects that have already received USCIS pre-approval will significantly reduce the risks of immigration applications and shorten the time for USCIS to review documents. Therefore, recognizing the current investment situation and future development trends and choosing projects that have already been approved is undoubtedly a wise move to alleviate the interference of visa backlogs.
2. Price increases are imminent; strive to make a quick decision before the price hike.
To cope with the price increase issue, the most important decision for investors currently is to submit their applications, submit materials, and make payments as soon as possible after rationally selecting a good project, in order to seize the opportunity early. Do not wait until everything is missed and then regret it.
3. Respond to the September 30 extension issue, prevent policy changes, and immigrate early.
The successive closure of investment immigration programs in Canada and Hong Kong has dealt a huge blow to many investors. Many ironclad facts have once again fully demonstrated a truth: it is better to immigrate early than late. The saying that failing to prepare is preparing to fail is also a truth in the immigration world. Immigration also requires full preparation. Only investors who are always fully prepared can seize the great opportunities for investment, shift from passive to active in the unpredictable immigration environment, adapt to all changes with an unchanging approach, and ultimately assess the situation to strive for the greatest success in immigration.
Recently, Worldway Group has comprehensively analyzed the many factors that will affect U.S. investment immigration applications in 2015 and has carefully selected two projects that have already received I-924 approval from USCIS: the New York Liberty Garden Luxury Apartment Project and the Pennsylvania Highway Project.
The New York Liberty Garden Luxury Apartment Project, by virtue of its I-924 pre-approval from USCIS, stands out among many real estate EB-5 projects and has become an unmissable choice for coping with the 2015 U.S. investment immigration visa backlog. Moreover, the New York Liberty Garden Luxury Apartment Project also has a 14.5-fold high net asset guarantee. The developer, Lightstone Group, is one of the largest and most successful unlisted comprehensive real estate developers in the United States, and the developer's founder provides an 11.7-fold personal asset guarantee.
The Pennsylvania Highway Project has already received I-924 approval from USCIS, and this project is borrowed by the state government with a state government commitment to repay, making it a 100% U.S. government EB-5 project. The first phase of the Pennsylvania Highway Project was sold out in just two months. Currently, the second phase of the Pennsylvania Highway Project has seen an even more enthusiastic buying situation than the first phase. To learn more about these two approved U.S. investment immigration projects, please call 400-138-2929.
