Can I insure my EB-5 investment?

A question that investors often have is whether it is permitted to purchase insurance from a third party if the commercial enterprise fails to repay the EB-5 investor.  The answer, with caveats, is "yes." 

According to the the USCIS website's notes of a stakeholder meeting of December 14, 2009,   an investor may purchase insurance as long as the  investor's capital remains "at risk," and the policy does not serve as a "redemption or a guaranteed buy-back agreeement for the alien investor's investment."  Decisions as to whether the insurance complies with "statutory and regulatory reuirements"  is made on a case by case basis.  It is important, therefore that an investor consult with competent counsel when making this decision.  For further information, the USCIS website is linked below: http://www.uscis.gov/portal/site/uscis/menuitem.5af9bb95919f35e66f614176543f6d1a/?vgnextoid=86470541743a5210VgnVCM100000082ca60aRCRD&vgnextchannel=994f81c52aa38210VgnVCM100000082ca60aRCRD


Robert J. Maher, Esq.
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RMaher@RobertMaherLaw.com
www.robertmaherlaw.com
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NewYork Immigration Attorney

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www.robertmaherlaw.com

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http://online.wsj.com/article/SB10001424052970203806504577181461401318988.html

In light of the article in today's Wall Street Journal, "Plan B for China's Wealthy: Moving to the U.S., Europe," linked to above, this blogger wonders if the quota of three thousand visas set aside through the Pilot Program (Regional Center) of the EB-5 program will be reached in the near future. Your comments are welcome. 




Law Office of Robert J. Maher, P.C.
EB-5 and Immigration Attorney
52 Duane Street, 7th Floor
New York, NY 10007
212-939-7548
RMaherEsq@gmail.com
Skype: RMaher2

Rules Stretched as Green Cards Go to Investors

http://www.nytimes.com/2011/12/19/nyregion/new-york-developers-take-advantage-of-financing-for-visas-program.html?_r=1&scp=1&sq=eb-5&st=cse

http://www.nytimes.com/2011/12/27/opinion/million-dollar-investor-visas.html?scp=2&sq=eb-5&st=cse

The above linked article and opinion in the New York times addresses an issue that has arisen more frequently as the benefit of the EB-5 program has grown: the "gerrymandering" by States of population tracts so that the foreign investment generated by the EB-5 program is directed to specific projects in specific areas.

Targeted Employment Areas are determined by a state body that certifies that the area where the EB-5 investment or regional center project is located has an unemployment rate 150% higher than the national average. Legislation creating the program did not specify the criteria for determining whether an area is a high unemployment area.

In the EB-5 context, pertinent part of the statute states:

(ii) In the case of a high unemployment area:

(A) Evidence that the metropolitan statistical area, the specific county within a metropolitan statistical area, or the county in which a city or town with a population of 20,000 or more is located, in which the new commercial enterprise is principally doing business has experienced an average unemployment rate of 150 percent of the national average rate; or

B) A letter from an authorized body of the government of the state in which the new commercial enterprise is located which certifies that the geographic or political subdivision of the metropolitan statistical area or of the city or town with a population of 20,000 or more in which the enterprise is principally doing business has been designated a high unemployment area. The letter must meet the requirements of 8 CFR 204.6(i).

As it stands, the New York State Department of Economic Development determines, or defines, a Targeted Employment Area within New York State. There are areas of Manhattan, especially the diamond district and area surrounding the Brooklyn and lower Manhattan waterfronts, mentioned in the above article do not appear to be areas of high unemployment upon first glance. Is the state, then, violating the spirit of the law in focusing on areas these areas for development?

In this blogger's opinion, the answer is no. First, there is no phohibition against combining census districts to create a Targeted Employment Area. There is also no "one size fits all" method for determining such an area. New York City and Omaha, Nebraska, for instance, although cities, are not the same. Their populations are distributed differently and their needs for economic development are different. Therefore, aplying a blanket definition of a targeted employment area for both states would not make sense. Restricting the method of determining a Targeted Employment Area, as the articles suggest, also may not be in the spirit of the law. The goal, after all, is economic development.


Would it be better to limit what constitutes a targeted economic area to USCIS?

No. In the New York examples mentioned, the census tracts that are combined do include a large number of areas of high employment. The map referenced above also includes both commercial, residential and former industrial areas that form a coherent whole: the lower Manhattan waterfront. The areas are connected by bridges, tunnels and subway lines. People live, play and work in the outlined areas. A person living in the Farragut house may be one of the ten employees required by the program.

Taking the Nebraska New York example above a step further, it is bad idea to apply a one size fits all model for determining what constitutes a Targeted Employment Area. The United States covers a large, diverse land mass. It is divided into thousands, if not millions of smaller geographic units. Some are densely populated; others are sparse. Economic development requires a diversity of strategies applied carefully to achieve the maximum result: jobs for workers in the United States. Creating a targeted employment area that includes higher and lower income census areas may be exactly what is needed to generate the investment necessary to foster economic growth.

If you are interested in the EB-5 program, feel free to contact me. My information is below:
Robert J. Maher, Esq.
Law Office of Robert J. Maher
52 Duane Street, 7th Floor
New York, NY 10007
Tel. (212) 939-7548
Fax. (212) 732-6323
Skype Phone: 917-720-3526
Skype User name: RMaher2
website: https://www.RMaher@RobertMaherLaw.com

Which EB-5 Regional Center Should I choose for my investment?

A potential investor should consider a host of variables when choosing an EB-5 Regional Center. In short, an investor has to do his or her due diligence. Below is a short list of some questions an investor might consider:
1) How many I-526 petitions have been filed by investors in the Regional Center and approved by USCIS? A successful Regional Center will have a large number of approvals.
2)How many I-829 peitions have been filed by the Regional Center and approved by USCIS? This is a very important measure of the success of the Regional Center because an approved I-829 removes the conditions on an investor's conditional green card.
2) What is the business structure of the Regional Center? Limited Liaibility Partnership may offer the most flexibility for an investor.
3) Are the Regional Center's projects loan based or equity based? This may be important to the investor because whether the Regional Center is loan based or equity based may determine the ease with ehich an investor may withdraw his/her money at the end of the investment period.

USCIS: A Work in Progress: Towards a New Draft Policy Guiding EB-5 Adjudications

USCIS recently released this draft memorandum regarding the EB-5 program. It is a good introduction to the EB-5 process from beginning to end. It answers many of the questions potential investors may have regarding the process. I have attached it post it in its entirety on this blog.

http://www.uscis.gov/USCIS/Outreach/Feedback%20Opportunities/Draft%20Memorandum%20for%20Comment/EB_5_Adjudications_Policy3.pdf



Please direct any questions to your New York Immigration EB-5 attorney at RMaher@RobertMaherLaw.com, 212-939-7548

What are the benefits of investing in an EB-5 Regional Center?

There are some advantages to investing in a Regional Center as opposed to applying for an EB-5 visa by investing in a new or troubled business. Investing in Regional Center provides two main benefits. First, the Regional Center Program has a less restrictive job creation requirement because it permits the use of indirect jobs towards the requirement that the investment create ten jobs. Second, Regional Centers require less day to day involvement on the part of the investor. The investor usually needs to live in the same location as a commercial enterprise that is not part of a Regional Center because the investor needs to manage the day to day operations of the commercial enterprise.

A potential investor should consult an attorney before beginning the EB-5 process. If you have any questions, please feel free to contact me, your New York EB-5 Attorney, at RMaher@RobertMaherLaw.com. My phone number is 212-939-7548, or look for me on Skype: rmaher1