Chinese investment bolsters EB-5 visa program
Updated: 2014-05-19 08:53
By JACK FREIFELDER in New York (China Daily USA)
As opportunities for foreign direct investment (FDI) in the US continue to pop up, wealthy Chinese individuals are champing at the bit for a chance to get a piece of the pie.
And an increasingly popular phenomenon is the use of the EB-5 immigrant investor program.
Michael J. Wildes, a managing partner at New York-based immigration law firm Wildes & Weinberg PC, said he expects the EB-5 program to continue in its widespread application.
"The great risk takers we've seen historically in this nation have been entrepreneurs and immigrants, people who enfranchise employment and opportunities for others," Wildes told China Daily.
EB-5 is an alternative way for immigrant investors to obtain a visa. It was created in 1990 by Congress to help stimulate the economy through job creation and foreign investment.
With a minimum of $1 million — or $500,000 in low employment or rural areas — an EB-5 investor must create at least 10 full-time jobs through the project they are working toward completing. In return, the investor is eligible for permanent US residency.
Tina Hou — managing director of Dallas, Texas-based Civitas Capital Group, the largest EB-5 fund manager in Texas — said Chinese outbound FDI is "still a relatively new phenomenon" despite the sizable uptick in recent years.
"Chinese investors are interested in the same things that most foreign nationals or companies are interested in when they invest in the US — doing business in one of the most competitive and fair playing fields in the world," Hou told China Daily on Friday. "FDI is a great way to do this, especially for countries, like China, where the domestic investment opportunity is limited."
In 2013, 6,895 Chinese nationals were issued visas through the EB-5 program; South Koreans, the next largest group, were issued 364, according to data from US Citizenship and Immigration Services (USCIS), the agency within the Department of Homeland Security that oversees the program.
Though the program is limited to 10,000 visas per year, participants in EB-5 deals are not required to manage their investments on a day-to-day basis, according to Wildes. In addition, the added benefits afforded to immediate family members are numerous.
"All family members, including the spouse and unmarried children under the age of 21, can join the principal investor and enjoy the same benefits as other permanent US residents — including eligibility for health insurance and education benefits," Wildes said.
"Qualifying investors in EB-5 regional centers can live anywhere they wish and can travel in and out of the US as often as they want," Wildes said. "They can pursue other professional or personal ventures anywhere in the world, and this makes the EB-5 visa program very attractive — particularly to the nationals of China."
Brian Su, president and CEO of the Illinois-based Artisan Business Group Inc, said the EB-5 program would see "continuous growing investment" in the future.
"I am not surprised that China so far is the largest source of EB-5 investors," Su said Friday in an email to China Daily. "Many Chinese families have made fortunes through real estate and other investments and the EB-5 program helps them achieve their goals."
The Wall Street Journal reported in January that according to USCIS estimates, the EB-5 program created more than 57,000 jobs and generated close to $9 billion since the program's inception.
Some of the projects in and around New York making use of EB-5 funding are the Atlantic Yards Project in Brooklyn and the Kingsbridge Armory redevelopment plan in the Bronx.
In October 2013, the Greenland Group, a Chinese state-owned real estate developer, invested $4 billion to acquire the rights to co-develop the Atlantic Yards Project with New York-based real estate firm Forest City Ratner Co. Close to $250 million has been raised for this project through the New York City Regional Center (NYCRC) for EB-5 investment, according to NYCRC data.
The area under development includes the already completed Barclays Center — a sports arena, which is home to the National Basketball Association's Brooklyn Nets — and has plans in place that call for the construction of a number of high-rise apartment buildings.
The group that is managing the Atlantic Yards Project could not be reached for comment.
Karen McMahon, owner of McMahon's Public House, a sports bar at 39 5th Avenue in Brooklyn, said she was "slightly apprehensive" of the development of the Barclay's Center at first.
"All fears have been set aside, and I feel the Barclay's Center has been a wonderful addition to the neighborhood," McMahon said Sunday in an email to China Daily. "It has brought numerous jobs to a declining economy, not only within the confines of the Barclay's Center itself, but also to the surrounding neighborhoods."
"More businesses are opening, real estate is on the rise and crime is down," she said. "The neighborhood surrounding the Barclay's Center in my opinion is stronger now than ever before."
An owner of a hardware store on 5th Avenue in Brooklyn said some residents were critical of the construction at first.
"We've been here for over 40 years, but investment and construction in the area are a sign of the fact that the neighborhood is changing," he said. "Some didn't like it at first, but many have since changed their attitudes because of the fact that there is added traffic and more things going on in the neighborhood."
A photo taken on Sunday at the intersection of 5th Avenue and Dean Street shows construction efforts along Flatbush Avenue in Brooklyn. Redevelopment efforts in the area are part of the Atlantic Yards Project, a mixed-use commercial and residential project that includes parts of Brooklyn's Prospect Heights neighborhood. Jack Freifelder/China Daily