2016 New York EB-5 & Investment Immigration Convention

Size: px

Start display at page:

Download "2016 New York EB-5 & Investment Immigration Convention"

Lewis Cook
5 years ago
Views:

2016 New York EB-5 & Investment Immigration Convention Putting Together an Approvable EB-5 Project Daniel Lundy, Klasko Immigration Law Partners, LLP Jeff Carr, Economic & Policy Resources, Inc.

1 2016 New York EB-5 & Investment Immigration Convention Putting Together an Approvable EB-5 Project Daniel Lundy, Klasko Immigration Law Partners, LLP Jeff Carr, Economic & Policy Resources, Inc. Kevin Wright, Wright Johnson, LLC Moderated By: Jonathan R. Bloch, Brownstein Hyatt Farber Schreck Moderator & Speakers Jonathan R. Bloch, Shareholder at Brownstein Hyatt Farber Schreck, provides creative and solution-oriented legal counsel in a variety of corporate and finance transactions. He has extensive experience negotiating and documenting financing through the EB-5 immigrant investor Visa program, including advising real estate developers as well as energy infrastructure companies on obtaining loans through the EB-5 program. Daniel Lundy, Klasko Immigration Law Partners, LLP Jeffrey B. Carr, President and Senior Economist, Economic & Policy Resources, Inc. (EPR), has more than 35 years of experience in applied economics and more than 12 years of experience with economic impact reports, project business plans, and regional center business plans under the EB-5 program. EPR has completed more than 200 assignments under the EB-5 program, including assisting with the creation of more than 60 regional centers, the approval of more than 1,200 I-526 investor petitions, and the approval of more than 150 I-829 petitions. Our work over the last 12 years has facilitated actual historical and prospective aggregate capital investment in the U.S. economy of more than $14.0 billion, and has facilitated the creation of roughly 100,000 total U.S. job opportunities. Kevin Wright, Principal, Wright Johnson, LLC, is considered an expert in the EB5 field with more than 10 years experience working in the industry. While the head of Wright Johnson the Company has formed more than 175 Regional Centers, and completed more than 550 economic impact reports and 650 EB-5 related business plans. Kevin also has the unique insight of the marketplace, as he has spent considerable time in multiple countries raising funds for projects that are located within Regional Centers that he is a principal of. 1

2 EB-5 Team- It Takes a Team (not a Village) Preparing an EB-5 package is a team effort, and requires a number of specialists, including: Immigration Attorney: It may sound obvious, but EB-5 is an immigration program, and typically, only immigration attorneys have the extensive experience with USCIS needed to be successful. Securities Attorney: While there are some that argue that an EB-5 investment is not a security, most, including the SEC, believe that it is. EB-5 Business Plan Writer: The EB-5 business plan is a specialized document. It s more than a normal business plan. EB-5 Economist: Similarly, an EB-5 economic impact report is a highly specialized document. Real Estate and Transactional Attorneys, Tax Advisors, feasibility study providers, etc. Forming A Region Center Regional Centers are formed using the form I-924 Three types of Regional Center fillings Hypothetical Actual Exemplar All Regional Center fillings are based upon a project Regional Center designation includes a geographic designation in which the operator can promote projects. Industries are also specified, but easily amended Regional Center fillings require a team made up of an immigration attorney, economist, business plan writer, and securities counsel (exemplar) 2

3 Renting A Regional Center When working to develop an EB-5 project, the Project Team has two general ways to approach its EB-5 program: Utilize and existing regional center through a Regional Center services agreement or establishing/acquiring your own Regional Center. Establishing (or acquiring) your own regional center works best when there is sufficient lead time to do so, and you are willing to take on all the responsibilities. If filing an exemplar, it can take more than a year to develop-get approval. If filing with a hypothetical, it still can take 6-12 months. Going it alone has advantages but also disadvantages until you have actual EB-5 project development experience and have developed a reputation in the market. Costs can be considerable, and you have to be able to wait to generate project fees. Using an existing regional center can be the fastest alternative to the EB-5 market place. You can utilize the past project development experience and reputation of regional center personnel who have had a successful experience with EB-5. Cost to rent a RC can be a function of the just services you want to actually use but it can be expensive if you need to use the full suite of services approach. You give up some autonomy, but are able to learn as your project unfolds. Past experience of RC personnel-team can help you avoid avoidable mistakes. Keys To An Approvable Project EB-5 basics: An investor must Invest $500k or $1m, at-risk, in a New Commercial Enterprise, and the investment must result in the creation of at least 10 jobs for U.S. workers. Invest: Invest means to contribute capital, and place it at risk. New Commercial Enterprise: Formed after November 29, 1990, expanded by 40% of net worth or employees, or restructured so that a new enterprise results. U.S. Workers: U.S. Citizens, LPRs, or other immigrant authorized to work in the U.S. Job Creation: Within 2.5 years of I-526 approval. Can use indirect jobs. 3

4 Keys to an Approvable Project I-526 must prove that the jobs have been created, or provide a comprehensive business plan showing they will be created within 2.5 years of approval. Matter of Ho Verifiable Detail Indirect job creation Reasonable Methodologies Economic (Jobs) Impact Study What An Economist Does Completion of a preliminary job impact study for EB-5 program purposes to help assist in capital stack planning. Initial job impact estimate can help dimension the size of the EB-5 offering (using the 10 jobs per EB-5 investor math plus an appropriate surplus jobs cushion demanded by the EB-5 marketplace). Builds a defensible case for defining the correct impact area over which to count the EB-5 job impacts. The geographic area of a proposed new RC or a project offering must reflect the geographic reach of the project impact testimony being submitted for USCIS review. Advises on project phasing-regional center application strategy Finetunes the timing of development spending and operations ramp-up of the project relative to the timing of the project s economic impacts. Completes a credible and transparent economic-job impact study for USCIS filing purposes. Review standards are growing tougher and studies must now go into great detail and depth in terms of explanations and support for key assumptions versus even 6 months ago. 4

5 Economic (Jobs) Impact Study What An Economist Does (Con t) The economist provides an independent opinion of the economic impacts associated with a specific EB-5 project in a specific geographic region. Must meet the requirements of 8 CFR 204.6(j)(4)(iii) for Regional Centers (at least 10 EB-5 program eligible jobs per EB-5 investor), and Be consistent with recognized practices in regional economics ( best practices in input-output analysis). The economist s opinion of economic (job)impacts is relied upon...and investors are going to act based on the findings of the economic (job) impact report. The study and report needs to be transparent and fully defensible so that it can be duplicated by a competent peer. The report must be written in a way so that a lay person (a USCIS adjudicator, an agent, or EB-5 investor) can understand it. The economist has a duty to: 1. Fully explain the basis for his/her opinion, 2. Provide a full and clear description of the assumptions and methods employed (including the economist s choice of input-output tool), 3. Fully describe the data considered in formulating his/her opinion of the project s economic (job) impacts, and 4. Fully describe the derivation of his/her report s conclusions. Targeted Employment Letter Projects located within targeted employment areas are able to take advantage of a lower investment threshold of $500,000 vs $1,000,000 for projects that are not in a TEA Targeted Employment Letters are letters issued by the Organization or Individual designated in each State to certify that an area qualifies as 150% of the national unemployment rate. Currently economists combine census tract data to determine if the area has met the threshold. Currently each state has its own criteria for determining TEA areas TEA Reform Formal and national guidelines are coming soon either from USCIS themselves or in the form of a new bill through Congressional Legislation Industry consensus on a new method based upon NMTC with a reduced differential in investment amount Other possibilities include the California method of 12 tract 5

He has extensive experience negotiating and documenting financing through the EB-5 immigrant investor Visa program, including advising real estate developers as well as energy infrastructure

6 7/13/16 Biographies Jonathan R. Bloch Shareholder Brownstein Hyatt Farber Schreck Jonathan Bloch provides creative and solution-oriented legal counsel in a variety of corporate and finance transactions. He has extensive experience negotiating and documenting financing through the EB-5 immigrant investor Visa program, including advising real estate developers as well as energy infrastructure companies on obtaining loans through the EB-5 program. He also represents corporations, investors and entrepreneurs in transactions including mergers and acquisitions, hotel and resort developments, fund formations, joint ventures and general corporate work. Jonathan also assists clients in technology, real estate, hospitality and telecommunication companies, and manufacturing facilities and Internet distribution centers, with the challenges of raising capital. Throughout his career, Jonathan has taken several companies public through the IPO process and directly interacted with many state public pension funds. Jonathan holds a Juris Doctor from the University of San Diego School of Law and a Bachelor of Science from the University of California at Berkeley. Biographies Daniel Lundy Klasko Immigration Law Partners, LLP Daniel B. Lundy is a partner at Klasko Immigration Law Partners LLP and a member of the firm s EB-5 practice. He has successfully represented numerous immigrant investors in their EB-5 petitions and applications, including investors seeking permanent residence through investment in their own businesses and investors seeking permanent residence through investments into USCIS-approved regional centers. Lundy also represents developers and others who seek to use foreign investment funds under the EB-5 program to fund their projects, either through the formation of a regional center or by joining with an existing regional center. He is experienced in reviewing regional center and project business plans, economic reports, securities offering documents, and corporate documents for compliance with the EB-5 program requirements, and in consulting and advising clients on the specific immigration requirements of the EB-5 program. Lundy received his Bachelor of Arts from Hunter College and his Juris Doctor from Fordham University School of Law, and is currently licensed to practice in New York. 6

Throughout his tenure at EPR, Carr has completed more than 175 assignments under the EB-5 Immigrant Investor Program in 45 states and U.S. territories.

7 Biographies Jeff Carr Economic & Policy Resources, Inc. Jeffrey Carr is president and senior economist at Economic & Policy Resources, Inc. (EPR), and has more than 35 years of experience as an economist-policy analyst. Throughout his tenure at EPR, Carr has completed more than 175 assignments under the EB-5 Immigrant Investor Program in 45 states and U.S. territories. He has lecturedpresented on the various aspects of the EB-5 program throughout the United States and abroad, including as a VIP speaker at four of the six EB-5 Invest in America Summits in China from 2011 through He has served on the IIUSA Policy Committee for the past three years. For the past 26 years, Carr has served as the consulting state economist and principal tax revenues analyst-forecaster for the past five governors of his state. He has been forecast manager for more than 25 years for his state for the New England Economic Partnership (NEEP) a regional group of business- academic forecasters. Carr worked for the U.S House of Representatives in Washington, D.C. during the late 1980s. Biographies Kevin Wright, Wright Johnson, LLC Kevin Wright, Chief Executive Officer of Wright Johnson, is a world renowned EB-5 expert and is considered one of the foremost authorities on the EB-5 Immigration Visa program. As an accomplished researcher, EB-5 economist, and professionalauthor,he has completed economic impact studies for more than 500 projects in such diverse industries of hotel,senior living, oil and gas,technology, and medical projectsin the EB- 5 space. Further, Kevin is responsible for the creation of more than 175 Regional Centers in the United States. Kevin began working on EB-5 projects in 2006 when the industry wasstill in its infancy and became one the preeminentfiguresin the rise of EB- 5 after the economic downturn that propelled the program to prominence in the following years. Fast forward to 10 years later, and Wright Johnson has completed more than 600 economic impact studies related to the EB-5 program and employs a large team of economists, analysts, and business plan writers. His dedication to his clients and the growth of the EB-5 program has led Kevin to spend several months of the year in China, working with investors and migration agents on a daily basis to improve their understanding of the EB-5 program and input/output analysis. 7

8 Disclaimer This presentation outline and the presentation itself are for general education purposes only and are not intended to provide specific guidance or legal advice about what to do or not to do in any particular case. You should not rely on this general information to make decisions about specific immigration matters. If you are not yourself a lawyer, you should seek the assistance of an immigration lawyer to help you resolve these issues. Thank you. 8

EB-5 STAND-ALONE PETITIONS AND EB-5 REGIONAL CENTER PETITIONS: WHICH ONE MAKES SENSE FOR MY PROJECT? Mona Shah, Esq. Yi Song, Esq.

EB-5 STAND-ALONE PETITIONS AND EB-5 REGIONAL CENTER PETITIONS: WHICH ONE MAKES SENSE FOR MY PROJECT? By Mona Shah, Esq. Yi Song, Esq. An EB-5 investment can take one of two forms. The investor can invest