Ngày 2/12/2023, một sự kiện toàn cầu về di cư và đầu tư được tổ chức tại Thành phố Hồ Chí Minh bởi John Hu Migration Consulting, với chủ đề nổi bật là cung cấp cập nhật về chương trình visa EB-5, thu hút doanh nghiệp và nhà đầu tư Việt Nam đang tìm kiếm cơ hội tại Hoa Kỳ.
Tại sự kiện, ông Mark Davies, nhà sáng lập của hãng luật chuyên về di trú và định cư Davies & Cộng sự, và ông Simon Thien Nguyen, Chuyên viên Đầu tư giàu kinh nghiệm của hãng, chia sẻ những hiểu biết quý báu về các tùy chọn khác nhau trong chương trình thị thực visa EB-5 dành cho nhà đầu tư Việt Nam. Các thông tin được luật sư chia sẻ nhằm giúp nhà đầu tư Việt Nam hiểu rõ hơn về các lựa chọn visa khác nhau để bắt đầu kinh doanh tại Hoa Kỳ.
Điểm chính về triển vọng Visa EB-5 cho nhà đầu tư Việt Nam trong giai đoạn 2023 – 2024:
Luật sư Davies đảm nhiệm phần thảo luận, tóm tắt về chương trình EB-5 và giải thích về các lựa chọn cho nhà đầu tư Việt Nam. Diễn giả đi sâu vào chi tiết về chương trình EB-5, mang đến cho mọi người cái nhìn rõ ràng về các con đường visa mà doanh nghiệp và nhà đầu tư có thể tham khảo.
Visa EB5 hình thức đầu tư trực tiếp (direct) so với Trung tâm Vùng (regional center): Lựa chọn nào cho nhà đầu tư Việt trong 2023 – 2024?
Luật sư Mark Davies nói về một vấn đề phổ biến mà nhà đầu tư Việt Nam thường gặp: lựa chọn giữa các chương trình visa EB-5 Trực tiếp và EB-5 Trung tâm Vùng.
Luật sư nhấn mạnh tầm quan trọng của việc giảm thiểu rủi ro khi đầu tư visa EB5, đặc biệt là khi xem xét tùy chọn Trung tâm Vùng. Luật sư nhấn mạnh ưu điểm của việc giảm rủi ro khi chọn đầu tư Visa EB5 dạng Trung Tâm Vùng, khi khách hàng nhận được sự cố vấn và hỗ trợ của nhiều bên: đại diện trung tâm vùng, chủ đầu tư, luật sư cố vấn và công ty tư vấn đầu cư định cư. Việc này sẽ giúp khách hàng tránh được rủi ro nhiều hơn hình thức EB5 trực tiếp, giảm trách nhiệm quản lý một doanh nghiệp EB-5 độc lập, nơi yêu cầu tạo ra và duy trì 10 việc làm.
Trả lời câu hỏi của người tham dự sự kiện về EB5:
Tại sự kiện cũng diễn ra một phiên hỏi và đáp cùng các nhà đầu tư về việc sử dụng tài khoản escrow. Những câu trả lời của ông nhấn mạnh về tầm quan trọng của việc có một công ty luật đáng tin cậy giám sát quy trình, đảm bảo rằng quỹ của nhà đầu tư được xử lý một cách an toàn theo quy định của EB-5.
Tổng kết, Davies & Associates LLC, đại diện bởi ông Mark Davies và ông Simon Thien Nguyen, đóng vai trò quan trọng trong việc giúp mọi người hiểu rõ hơn về chương trình visa EB-5.
Sự kiện không chỉ giới thiệu về chuyên môn của công ty trong lĩnh vực pháp lý nhập cư mà còn đối mặt với những lo ngại quan trọng của nhà đầu tư, như việc sử dụng tài khoản Escrow. Bằng cách làm rõ những khía cạnh này, Davies & Associates LLC mong muốn tiếp tục hỗ trợ doanh nghiệp và nhà đầu tư điều hướng thành công trong thế giới phức tạp của chương trình EB-5.
On 12/2/2023, a special global migration and investing event was organized in Ho Chi Minh City by John Hu Migration Consulting, with one of the notable topics being to explain the ins and outs of the EB-5 visa program, attracting Vietnamese businesses and investors looking for opportunities in the United States.
During the event, Mr. Mark Davies, who is the Managing Partner at Davies & Associates LLC, and Mr. Simon Thien Nguyen, an experienced Investment Consultant, shared valuable insights about the various options within the EB-5 visa program for Vietnamese Investors. They aimed to help Vietnamese investors understand the different visa choices available for starting a business in the U.S.
Key Points about EB-5 Visa outlooks for Vietnamese in 2023 – 2024:
Mr. Davies led the discussion, providing a summary of the EB-5 program and explaining the choices for Vietnamese investors. The speaker went into the details of the EB-5 program, giving everyone a clear idea about the visa paths that businesses and investors can explore.
EB5 Direct vs. Regional Center:
A key point discussed at the event was Mr. Mark Davies talking about a common problem that investors often face: deciding between the EB-5 Direct and EB-5 Regional Center programs.
He stressed how important it is to reduce risks, especially when considering the Regional Center option. Mr. Davies pointed out the benefit of involving different parties within the Regional Center structure, offering clients more support and lessening the responsibility of managing an EB-5 business on their own. Additionally, he highlighted the significance of job creation in the Direct EB5 model, where creating and maintaining 10 jobs is a requirement.
Interactive EB5 Q&A Session:
We also had an interactive session where Mr. Davies answered questions from the audience, including concerns about using Escrow accounts. His responses emphasized the importance of having a reliable law firm oversee the process, ensuring that investors’ funds are handled securely according to EB-5 regulations.
In conclusion, Davies & Associates LLC, represented by Mr. Mark Davies and Mr. Simon Thien Nguyen, really seeks to help everyone understand the EB-5 visa program through reality – proven case studies.
The event also showcased the firm’s expertise in immigration law and addressed important concerns for investors, such as the use of Escrow accounts. By providing clarity on these aspects, Davies & Associates LLC hope to continue supporting businesses and investors navigating the complex world of the EB-5 program successfully.
There are two kinds of U.S. investor visa: (1) the non-immigrant E-2 investor visa; and (2) the immigrant EB-5 visa.
Can I Use a Loan for a U.S. Investor Visa Application?
Loans are one of the authorized forms of financing that an investor may use. Investors commonly use loans to fund EB-5 and E-2 qualifying investments.
Loans can be secured or unsecured. Home Equity Lines of Credit (HELOC) can allow homeowners easy access to EB5 financing.
You must file documentation that evidences the bona fides of the loan with USCIS. This includes: (1) the lender’s source of funding*; and (2) the method by which money was transferred from the lender to the EB-5 investor.
* Loans sourced from a bank are exempt from this rule. Investors are not required to show where a bank procured loaned funds.
Why are Loans for EB-5 Popular?
In 2022 the RIA raised the minimum investment amount for EB5 from $500,000 to $800,000. As a result, more people wanted to borrow money to finance their EB5 investor visa application.
I. Finding an E-2 or Eb-5 Visa Lender
There are generally four sources of E2 and Eb5 qualified loans: 1) private loans; 2) institutional loans, including bank loans; 3) loans from EB5 Regional Centers; and 4) seller financing available in both E2 and EB5 Direct cases.
(1) Private Loans
Many Eb5 investors borrow money or take gifts from family. A family member lending or gifting funds for an investor visa application will have to carefully document the lawful source of those funds.
Other private lenders commonly include friends and business associates.
(2) Institutional Loans
Investors can also borrow money from a bank or financial institution by using their home or assets as Collateral. HELOCs are an especially popular source of financing.
Careful attention needs to be paid to the loan documentation. The purpose clause in a loan agreement needs to be carefully reviewed. A purpose clause that does not permit borrowing for EB5 purposes will likely result in a visa denial.
(3) Regional Center EB-5 Loans
More recently a number of Regional Centers have started to finance Eb5 transactions.
Caution needs to be taken when borrowing funds from a Regional Center. While some Regional Center loan programs do qualify for EB-5 purposes the status of some other EB5 loan programs is currently undetermined.
(4) Seller Financing
Direct EB5 investors and E-2 investors can often purchase an existing business using seller financing.
A potential issue with seller financing is whether or not the investor is “at risk”. In assessing whether or not an E-2 investor is at risk the US government applies a proportionality test. Using this proportionality test the US government evaluates the overall cost of the business against the investment made.
Caution needs to be taken to ensure that the seller financing is not secured by the subject business or the assets comprising that business. As stated in the Foreign Affairs Manual:
“Indebtedness such as mortgage debt or commercial loans secured by the assets of the enterprise cannot count toward the investment, as there is no requisite element of risk. For example, if the business in which the applicant is investing is used as collateral, funds from the resulting loan or mortgage are not at risk, even if some personal assets are also used as collateral.”
II. Secured or Unsecured EB5 Loan?
All loans are either secured by Collateral or unsecured. The investor needs to secure a secured loan with their personal property (Collateral). An unsecured loan does not require any Collateral.
Most investor visa lenders require Collateral to secure loans used for EB5 funding, unsecured loans are hard to find. If unsecured loans are available they are likely to have a much higher interest rate or other charges than a secured loan,
What is Collateral for a Loan?
“Collateral” refers to the assets used to secure a secured loan. If the borrower does not repay the loan as agreed, the lender will sell the Collateral to pay the loan.
EB-5 Visa Loan Requirements and E2 Visa Secured Loan Requirements
There are several requirements for a secured loan to be qualified as EB-5 investment funds. These requirements include:
The loan must be secured by the investor’s assets or property. The EB5 investor can only use personal property (Collateral) they own to secure an EB5 loan. EB5 qualifying personal property (Collateral) can include: Stocks and other securities, gold and jewelry, real estate and other assets.
Source of Funds for Collateral. An EB5 investor must prove how the Collateral securing an EB5 Loan was purchased. The Eb5 investor must also prove how the funds used to purchase the Collateral were lawfully earned.
Value of Collateral. The value of the investor’s Collateral must be equal to or more than the loan amount.
Perfection of Security Interest and Mortgages. The lender’s security interest in the Collateral must be perfected. In simple language that means that the mortgage or other loan used to secure real estate must be properly registered as required by law.
The investor must be the principal borrower of the loan and must be fully responsible for its repayment. The loan must be under the investor’s name and they must be solely liable for its repayment.
Investor is “At Risk”. An investor places their personal assets “at risk” as Collateral in a secured EB5 loan or E2 loan. The investor clearly meets the “at risk” requirement.
Purposes of Loan. For the EB5 visa program the capital investment funded by the EB5 loan must placed “at risk” and create ten jobs. Investors accomplish this by investing the loan proceeds in an EB-5 project.
Acceptable kinds of collateral for an EB-5 Visa loan
USCIS allows EB-5 investors to use any form of collateral to secure their loan as long as the loan is secured by the investor’s assets. Property holdings, gold, real estate, cash, and equipment are some examples of acceptable kinds of personal assets that investors can use as collaterals.
Eb5 projects require an investment of USD 800,000 or USD 1,050,00 and must generate at least 10 new direct and indirect jobs.
Land-Based Loan Transactions
If you are going to use a bank loan secured by land, you will need to provide copies of all relevant loan documents. This documentation includes the full purchase documentation for the land including an explanation of how funds to purchase the land were earned. Investors should also be willing to explain how payments were made on any mortgage used to acquire the property.
The loan must also comply with the laws of the country where the land is located.
Mortgages and Remortgages
Investors may also remortgage or refinance using a mortgage with a fixed or variable interest rate. A bank can quickly determine if a house or a condominium is qualified for a cash-out refinance. The loan can be quickly arranged with the proceeds reaching the investor’s account within 45 days, subject to the appraisal and the lending review processes.
E2 Visa and EB-5 Visa Unsecured Loan Advantages
An unsecured loan has a few advantages:
No Source of Funds. A loan from a recognized financial institution has no source of funds requirement. As an unsecured loan has no Collateral there no requirement to trace the funds used to purchase Collateral. An unsecured loan which is not from a recognized financial institution will require proof of how the lender earned the funds to make the loan.
Assets not at Risk. Because the loan is unsecured the investor’s assets are not immediately placed at risk in the event the loan is not re-paid.
Investor is “At Risk” for EB5 Purposes. USCIS traditionally took the view that investors using unsecured loans to finance EB5 investments were not “at risk” as required by EB5 law. As a result of a court case decided in October 2020 the position has changed. Unsecured loans can now be used to finance EB5 investments. As the court decision is fairly recent there is little data on how the USCIS is deciding cases where foreign investors are relying on unsecured loans.
III. EB-5 Visa Loan Repayment Terms
Loan Interest Rate
Loan interest is the amount that a lender charges to a borrower for lending the borrower the money. To calculate loan interest, multiply the interest rate by the outstanding loan balance. Market conditions and credit standards determine interest rates for EB5 Visa loans.
A wide variety of loan products on the market that meet EB5 needs. These can include 30 and 15 year fixed repayment terms using various fixed and adjustable interest rates.
At the time of writing, an investor can borrow $800,000 at a 5% interest rate by using a $1 million home as collateral. You can then apply the USD 800,000 loan proceeds towards the required EB-5 investment and the associated fees.
In addition to the interest cost some loans may entail other costs. These costs may include arrangement fees and pre-payment penalties.
Lending Rates from Financial Institutions
There are a lot of factors that can affect lending rates. These factors can include a client’s banking relationship and the liquidity and risk level of the asset among others. The lending rate can depend also on a bank’s own cost of capital or external factors outside its control.
While applicants may want to pay off their loan as quickly as possible to reduce the interest cost caution may be prudent.
The reason for this is USCIS may ask to see proof that the loan is still outstanding at the time the I526 is adjudicated. If the loan has been paid off USCIS may then ask for proof of how the funds used to pay off the loan were earned. This may raise complications concerning the source of funds at the time the case was originally filed.
Investors from some countries where currency control measure are in place may find the use of credit cards an Eb5 funding option.
USCIS has not stipulated any repayment requirements for short-term loans. It is however advisable to repay loans only following the approval of your I-526 petition.
If you intend to use a loan for your EB5 funding, you will need to produce documents confirming the lawful source of the lender’s funds and the lawful source of the assets used as collateral for the loan.
Just like in short-term loans, the USCIS has not issued requirements for repaying long-term loans. There’s no indication that longer-term loans will cause your investment to lose its status as an “at-risk” investment. The EB-5 investor program requires investors to place their investment “at risk” for a period of two years. law Capital can neither be managed or governed by redemption agreements insuring loss nor by contractual promises to repay funds. For capital to be “at risk”, there must be a chance that it will be lost.
IV. Loan Documentation in Investor Visa Cases
A loan taken to fund an E2 or EB5 investor visa case will have certain documentation. The US Government, USCIS and the US State Department will all want to see:
– The Loan Agreement,
– A Promissory Note (sometimes combined with the Loan Agreement into a single document)
– A Security Agreement which secures the loan with the Collateral (for secured loans only).
An immigration lawyer should carefully review the loan documentation to ensure that all of the terms and conditions are consistent with the EB5 program.
V. How to Negotiate Eb5 Financing: Key Terms to Watch for in an Eb5 Loan
Eb5 investors would be well advised to retain an experienced lending lawyer to review loan documentation. Key issues to look at in the loan documents include but are not limited to:
Whether or not there is an early repayment penalty.
Purpose clause. Make sure that the loan agreement has a purpose clause that includes EB5 as a permissible use of the funds. A clause that states funds can be used “for any lawful purpose” is proper.
The amount and duration of the loan, and the procedure for disbursement.
How interest will be paid. Monthly, quarterly, or annual terms of the principal and accrued interest.
Full fees and costs, including any origination points or other fees.
Check that is it lawful to borrow money secured by local property and remit the proceeds of that loan to the United States for investor visa purposes.
VI. Special Considerations for Bangladeshi and Indian Eb5 Investors
Investors resident in India or investors using funds remitted from India will need to comply with the regulations promulgated but the Reserve Bank of Indian (“RBI”). Most investors accomplish this through the Limited Remittance Scheme (“LRS”).
It is improper for an investor resident in India to incur debt outside of India or to borrow money in India with the intention of remitting those funds outside of India.
Here at Davies & Associates, our pool of expert immigration attorneys can help you ensure that you comply with EB-5 Visa loan requirements and that you have the best chance of being granted an EB-5 Visa.
It is with immense pride and gratitude that we announce our firm’s recent recognition by EB5 Investor Magazine as one of the “Top 25 Immigration Attorneys of 2023.”
This prestigious accolade is a testament to our commitment to excellence and dedication to serving our clients in EB5 visa service.
We are deeply grateful for your trust and support, which have allowed us to reach such a significant milestone.
This recognition reaffirms our unwavering commitment to providing top-notch legal services to individuals and businesses seeking immigration solutions.
You can also read the latest 2023 EB5 Investors Magazine via this link. (P/s: find us on page 35!)
EB5 Investors Magazine and Uglobal Immigration Magazine held an in-person EB-5 & Global Immigration Expo in Ho Chi Minh City, Vietnam, on April 4th and 5th. The event brought together migration agencies, immigration attorneys, global service providers, regional centers, project developers, and investors from all over the world to discuss the United States EB-5 Immigrant Investor program as well as a variety of global residency and citizenship programs.
Concurrent filing, adjudication trends, the E-2 road, and smart project selection are some of the expedited choices available to investors and developers.
Davies & Associates, an international immigration law practice, was one of the event’s sponsors. The firm’s founder and managing partner, Mark Davies, hosted a panel discussion on expedited options for investors and developers, concurrent filing, adjudication trends, the E2 road, and wise project selection. Alvin Wong of Manhattan Regional Center and Niral Patel of KLD LLP were among the panelists.
In addition to the panel discussion, Davies & Associates presented a business presentation with Zeenat Phophalia, an L1 lawyer from India, Matteo Tisato, an Italian Senior Immigration Analyst, Mark Agbuya, a Regional Operations Manager, Eric Dela Cruz, a corporate lawyer both from the Philippines, and Simon Nguyen, a lawyer and business development executive from Vietnam. The presentation highlighted Vietnam as one of the world’s major EB-5 markets, with the fastest growth rate of HNWIs.
The event provided an excellent opportunity for high-net-worth individuals, international migration agents, regional centers, project developers, immigration and securities attorneys, broker-dealers, and many other industries service providers to connect with EB5 and global industry influencers and expand their global business networks. Attendees were also able to learn from interactive educational panels and present their businesses to a large group of EB5 and worldwide stakeholders.
Vietnam’s GDP is predicted to rise to 5.5% in 2022, while the country’s UHNWI population increased by 320% between 2000 and 2016. As a result, Vietnam is the world’s second-largest EB-5 market, and the number of HNWIs in Vietnam is quickly increasing, with growth predicted to reach 170% by 2026, the highest pace in the world.
In conclusion, the EB-5 & Global Immigration Expo in Ho Chi Minh City, Vietnam, provided a valuable chance for industry participants to network, gain expertise, and present their firms to a global audience. Davies & Associates‘ involvement in the event demonstrates the firm’s dedication to meeting the global immigration needs of its clients while remaining at the forefront of the ever-changing RCBI market.
The EB-5 visa category is subject to a quota system, which means that only a limited number of EB-5 visas are available each fiscal year. When the number of visa applications exceeds the available visa numbers, the visa category is said to be in retrogression, which means that the processing of certain applications will be delayed until more visas become available in the next fiscal year.
As of March 2023, the EB-5 visa category is not currently in retrogression. However, it is important to note that retrogression can occur at any time due to high demand or changes in government policies. In recent years, the EB-5 visa category has experienced periods of retrogression, particularly for applicants from China, due to high demand for visas.
Check our EB5 visa program for more information:
By Mark Davies, Global Chairman, D&A
While the pandemic was not predictable economic shocks such as the mortgage crisis or just a plain economic downturn are.
Without making any comment at all on any specific EB-5 project, it is true that investors need to make sure that proper protections are in place when investing in any project. Many, not all, EB5 projects simply do not have the protections in them that a normal non-EB5 investor would demand.
There absolutely are real estate EB-5 projects in the market that are doing well, such as pre-leased warehouses or office buildings that are pre-leased to “AAA” clients.
There is far more to EB-5 project review than EB-5 compliance.
It is quite common to see EB-5 projects that have no language protecting clients from future subordination of the EB-5 position. In pre-leased commercial projects immigration lawyers often fail to take “due diligence” step 101 and read that lease on behalf of their client.
There are absolutely steps clients facing challenged projects must take now to protect themselves. Workouts 101.
Also, consider the position of a developer who is also a Regional Center in a workout or bankruptcy. Can they effectively represent the interests of EB5 investors?
The EB-5 Immigrant Investor Visa Program offers a direct route to a US Green Card. The minimum investment requirement is $900,000 and other conditions, such as job creation, apply. The EB-5 Visa is exempted from President Trump’s current “immigration ban”.
Nothing in this blog constitutes legal advice, please contact Davies & Associates for a consultation with an attorney
The State Department has published the July Visa Bulletin, which offers some insight into the waiting times for the EB-5 Immigrant Investor Visa Program. The most notable change in this month’s Visa Bulletin is that EB-5 Visa Priority Date for India has become “Current”.
What this means is that India is no longer in retrogression and EB-5 applicants born in India can progress to the next stage and schedule their visa appointment once they are approved.
At first glance this is exciting news and would appear to spell the end of the waiting list for Indians seeking an EB-5 Green Card. However, as we have cautioned before, this is likely to be artificial.
The probable explanation is that the rate of I-526 adjudications at the US Citizenship & Immigration Services (USCIS) has slowed significantly. Only after an I-526 has been approved can an applicant progress to obtaining a visa. So with fewer adjudications there is likely to be less demand at the National Visa Center, causing India to appear as “Current”.
With Covid-19 compounding the slowdown at USCIS, we will be keeping a close eye on the priority dates for you over the next few months.
If you are an investor and looking to expand your business to the United States, then the EB-5 visa program allows you to set up a commercial entity within the territory of the United States, subject to the fulfillment of its various criteria. More than 90% of EB-5 investments are made through EB 5 Regional Centers, and as a result, very few law firms have experience with the alternative: the so-called “Direct” EB-5 applications.
A Direct EB-5 application is one where an investor opens, expands or acquires EB-5 qualifying businesses in multiple and varied industries across the United States. Davies & Associates has a successful history of representing clients from all around the world start and invest in businesses in the United States. This includes clients from India, Russia, Brazil, Azerbaijan, Egypt and many more countries. In this blog today we will discuss the criteria for getting a direct EB-5 Visa to the USA.
- Capital Requirements: A Foreign company run by a foreign individual is required to make a minimum investment of 1 Million dollars for fulfilling the first requirement of EB-5. This amount is brought down to $ 500.000 if the investment is in a TEA region or a targeted employment region, which refers to mostly underdeveloped areas with high levels of unemployment. This requirement is statutory and this capital does not include costs incurred in processing and legal fees. It’s important to note that these criteria cannot be fulfilled with financed money, for example if you have borrowed from a bank and should come from the existing profits of a company.
- Non-Profit Entities: Non-profit entities are ineligible for the EB-5 visa subject to certain exceptions. If you are looking to set up an NGO or any other organization on a non-profit model, then you would have to look for other avenues.
- United States Commercial Entity: This one’s pretty basic, and requires the commercial entity to be registered in the territory of the United States and subject to federal and state laws. If your country has an investment treaty with the United States you can also look at the E2 visa which is by far the fastest way to get into the country. In case of an E2 visa, you can hire yourself and be your own sponsor for your immigration to the country.
- Employment Generation: Other criteria of the EB-5 visa is an undertaking to create at least 10 full time jobs for US citizens. It’s important to keep this in mind if you are planning to get the workforce from another country.
We have told you briefly, about the criteria for getting an investor visa for the United States of America. We at Davies and Associates LLC have helped hundreds of corporations, successfully set up their businesses in the country, and we would love to hear from you in case you have any further questions.