U.S. Congressman Joe Garcia (top image) and Congresswoman Judy Chu (bottom image) meet with Dr. Winner Xing, President of Worldway Group.
Currently, the U.S. EB-5 investment immigration program is favored by Chinese investors due to its shorter application approval time and minimal qualification restrictions, leading to a rapid increase in the number of applicants in recent years. Additionally, with Canadian investment immigration facing obstacles, tens of thousands of Chinese investors have turned to the U.S.
As the U.S. EB-5 investment immigration program heats up, countless EB-5 projects are released each year, with varying quality, presenting a selection dilemma for Chinese investors. In response, the International Financial News specifically interviewed Dr. Winner Xing, President of the well-known U.S. investment immigration agency, Worldway Group. Dr. Xing provided a professional analysis of the current status and risks of U.S. investment immigration for investors.
Reporter: Could you briefly introduce what U.S. EB-5 investment immigration is?
WINNER XING: The U.S. EB-5 investment immigration refers to the EB-5 visa category established in U.S. immigration law, abbreviated as EB-5 (Employment Based Fifth Preference), which is a category set up for overseas investment immigration applicants. The investment threshold for this category is generally $1 million; however, if the investment target project is located in a Target Employment Area (TEA) as defined by national statistics, this threshold can be reduced to $500,000. Foreign immigrant applicants can obtain a two-year conditional green card by investing $1 million or $500,000 in a U.S. business and creating 10 jobs. 90 days before the two-year period expires, if the investment is still active and has created 10 full-time jobs, the investor can apply to remove the conditions.
The advantage of U.S. EB-5 investment immigration lies in the absence of requirements for applicants regarding education, language, age, or business background. Spouses and children under 21 can also obtain U.S. green cards simultaneously, making it the simplest and fastest way to immigrate to the U.S., and it has become the most popular investment immigration project in recent years.
Reporter: What is the current status of U.S. EB-5 investment immigration? What risks do investors face?
WINNER XING: This year is full of uncertainties for U.S. EB-5 investment immigration. The U.S. State Department has issued a warning that the 10,000 EB-5 visa quota for 2014 will be filled, entering a period of backlog. Once the backlog occurs, the time cost for investing in U.S. immigration will significantly increase. Additionally, last year, the U.S. Senate passed a bill that requires the EB-5 investment amount to be adjusted for inflation; if the bill is ultimately passed, the investment amount could rise to over $820,000.
Under the expectations of "backlog" and "price increase," and the requirement that EB-5 projects must be "at risk," many investors are hesitant. From a professional perspective, the process for U.S. immigration applicants to obtain permanent green cards typically involves two steps: I-526 approval and I-829 removal of conditions. According to the U.S. EB-5 regulations, the EB-5 investment must be at risk after the investor's I-526 application is approved. This means that before the approval of the investor's I-526 application, the immigration law allows EB-5 funds to be secure. After the approval of the investor's I-526 application, they mainly face risks related to the green card and the investment.
Reporter: How can the risks of U.S. investment immigration be reduced?
WINNER XING: Before the approval of the investor's I-526 application, the immigration law allows EB-5 funds to be secure. At this stage, a bank escrow account can be set up, where the U.S. EB-5 investor signs an escrow agreement with the supervising bank and deposits the investment funds into the escrow account, stipulating that the EB-5 funds can only be released after the investor's I-526 is approved; if the investor's I-526 is denied, the supervising bank must return the EB-5 funds to the investor within a reasonable time.
This banking escrow service (similar to Alipay) during the U.S. investment immigration process is also known as third-party conditional payment service. The escrow agreement stipulates that the supervising bank must pay or return the regulated funds according to the conditions specified in the escrow agreement. This safety valve mechanism in EB-5 investments provides an initial safety guarantee for EB-5 investors, ensuring that the funds remain under the bank's supervision before the approval of their I-526 application. Otherwise, if the EB-5 funds are released early and the I-526 application is denied (in July 2014, the denial rate for I-526 applications reached 30%), the project developer must have another source of funds to return the denied EB-5 funds, which most developers do not have the capacity to do, making repayment potentially a long wait.
Reporter: What advice do you have for investors choosing EB-5 projects?
WINNER XING: Currently, in the increasingly stringent environment for U.S. investment immigration I-526 approvals, choosing EB-5 projects with a bank escrow mechanism has become a consensus among U.S. EB-5 investors. Unfortunately, at this stage, there are fewer and fewer EB-5 projects with standardized and complete escrow accounts. Therefore, investors must be vigilant and carefully discern.
When reviewing the escrow mechanism of EB-5 projects, investors should first check whether the project has set up an escrow account; second, examine the conditions for releasing funds from the escrow account; and third, look at the conditions for refunding the investment and issuance fees. Although the U.S. EB-5 regulations stipulate that the investor's investment must be "at risk," they do not specify the extent of risk required. As long as it does not constitute a "redemption guarantee" for the investor, even if the investment behavior of the EB-5 limited partnership is of very low risk, it still complies with the relevant provisions of immigration law (of course, provided that it can create sufficient jobs). Choosing EB-5 projects with an escrow mechanism and relatively low risk can serve as an important reference for investors.
Reporter: I see that the Worldway website has a section for "Market Available Projects" in the U.S. What is the purpose of this?
WINNER XING: As we all know, intermediaries play a role in helping investors select projects in the "immigration project supermarket." EB-5 investors have the right to choose and compare any EB-5 projects available on the market. During the process of immigrating to the U.S., when selecting EB-5 projects, investors sign a "Immigration Service Agreement" with a legitimate private immigration intermediary, rather than an investment agreement. Investors assess the risks of investment projects based on their knowledge and experience, weigh their risk tolerance, and then independently make decisions on investment projects, subsequently signing a complete set of relevant investment documents with the U.S. EB-5 project party. Clearly, investors come first, followed by investment agreements; whether to invest is a self-selection by the investors.
Worldway has won the Best EB-5 Immigration Agency Award in the U.S. for three consecutive years. In promoting the U.S. EB-5 investment immigration program, we have always fully respected the rights of investors to choose, and for a long time, we have objectively displayed the main EB-5 projects available on the market on our company website, providing greater choice for EB-5 investors, which has been recognized and welcomed by investors.
Reporter: Please introduce the Worldway Immigration Group.
WINNER XING: Worldway focuses on the field of investment immigration and is one of the earliest immigration agencies to introduce U.S. EB-5 investment immigration to China. Worldway was the first in the industry to propose the concept of "selected projects" for U.S. investment immigration, and has a strong professional team for U.S. project analysis, dedicated to the investigation, analysis, and selection of U.S. projects. We have consistently selected EB-5 investment projects that are both valuable and relatively safe from the numerous EB-5 projects released by hundreds of U.S. regional centers, providing strong guarantees for the safety of investors' green cards and funds as much as possible.
Worldway's professionalism has been highly recognized in the U.S. EB-5 industry. Worldway is the only Chinese immigration agency to receive awards personally presented by U.S. governors. Worldway has won the "Best Immigration Agency Award" at the U.S. EB-5 Summit for two consecutive years and has been awarded the "Most Honest Immigration Service Agency" for three consecutive sessions.
At the same time, Worldway has also established good relationships with U.S. government officials. I have met with the only Chinese American Congresswoman Judy Chu to discuss U.S. EB-5 investment immigration in depth. Not long ago, I also met with another U.S. Congressman, Joe Garcia, a supporter and promoter of immigration reform, who believes that EB-5 investment greatly benefits the U.S. economy and employment, and that U.S. immigration reform will ultimately develop in a positive direction.
