EB-5 Marketing: Time for a Post-China Vision

Employment Fifth:  Current*

*The following advisory is based strictly on the current demand situation.  Since demand patterns can (and sometimes do) change over time, this should be considered a worst case scenario at this point.

The above projections for the Family and Employment categories are for what could happen during each of the next few months based on current applicant demand patterns.  The determination of the actual monthly cut-off dates is subject to fluctuations in applicant demand and a number of other variables which can change at any time.  Those categories with a “Current” projection will remain so for the foreseeable future, with the possible exception of the China Employment Fifth preference category mentioned above.  

As someone who has spent roughly 50% of the past 12 months in and around China, I can tell you this: the momentum for interest in the EB-5 has never been greater, and the capping of investor visa opportunities in China’s key historical outlets for this type of migration — Canada and Australia — has only increased demand.  It is my personal opinion that just as key family and work visa categories have historically backlogged from high-demand countries, the same will happen with EB-5…and China is the number one demand market for the EB-5 investor visa.

So, as a Regional Center just entering the EB-5 game or even pending approval, what do you do?  You develop a multinational marketing plan which identifies investor opportunities in different global regions.  While it would be silly to say that any one or even cluster of these other markets can numerically compete with Chinese EB-5 demand, consider the damage that has been done within the China market by unscrupulous projects, agents, and structures.  Chinese investors and the agents who, under Chinese law, MUST represent them, view even the most bulletproof deals with a jaded perspective as a result of all the really bad EB-5 deals pushed upon them.  (When I was Fraud Officer in Ciudad Juaraz, Mexico 20+ years ago, about 80% of the marriage-based visa interviews I conducted revealed sham marriages for visa purposes only; it is human nature to become cynical after repeated negative experiences, and I remember having to remind myself daily about the 20% of couples, the bona fide marriages…).

Add up this new reality, long ago foreseen by the inimitable Mr. Udani to this embattled China EB-5 market and the logistics of getting investment funds legally out of China after the accredited investor is on board and you have to ask yourself:  “is there an easier way?”  I’m not going to pretend I know the answer to that but I do know this:

• There is increasing interest in the EB-5 materializing in countries like Mexico and Brazil, powerhouse economies with LOTS of qualified EB-5 prospects looking for a Plan B;
• Chavez’ reelection will trigger an assured continued exodus of the country’s affluent business leaders, who are increasingly concerned about the careening Venezuelan economy;
• Russian, Kazakh, and Pakistani business owners and professionals — the men and women who meet the SEC definition of “accredited investor” not by virtue of bloodline but by virtue of decades of tireless hard work and relentless saving, often as expatriates in remote locations — are seeing the respective implosions of their own nations in various ways, shapes and forms.

I’ve spent more than half my time this past year focusing on marketing Lake Point Capital Partners in the Far East, and it’s been an amazing year.  Five years ago, when I was first carefully educated into even believing that EB-5 could really work fairly by Pat and Kraig of EB-5’s game-changer, CMB, we experimented with marketing EB-5 in the Latin markets I knew so well.   Later, when Lake Point was an infant EB-5 deal in diapers, Jud and I hit Dubai.  The results in both cases were, candidly, less than spectacular.  But this past September, when I visited Pakistan, it was a different story.  The world, my friends, is catching up with EB-5 and America is still the best place on earth to assure a bright future for your children.

The point is this:  I’ll still be pounding out seminars in the Far East, but I truly believe it is time for diversified marketing approaches for EB-5 projects.  As so many more legitimate U.S. developers understand and delve into EB-5 structures, it is MHO that, for new projects entering the world of EB-5, a China-only model is no longer feasible.