Five misunderstandings of regional center investment

Myth 1: government participation = government projects

Many immigration agents claim that some investment immigration projects are guaranteed by the government, or directly refer to government participation as government projects. In this regard, Cai said that the establishment of EB-5 regional center in the United States is to attract foreign funds to invest in areas approved by the government's special planning, thus effectively promoting the development of the local economy. The regional center above 180 is a project approved by American governments at all levels to promote local economic development. Therefore, the EB-5 project of American investment immigrants is also a government project at different levels in counties. At present, projects in regional centers above 180 can be divided into two categories according to their nature: one belongs to private institutions; One belongs to a government project. Only four of them are state government regional center projects, and most of the others are private sector projects.

Comparing the two projects, there is no absolute quality. However, compared with private sector projects, government projects have different investment attraction. For example, Cai said that the Guangzhou municipal government's ability to attract investment is definitely different from that of private enterprises. The former can introduce large enterprises and companies, while the latter may not have such influence. On its risks, the risks of government projects are not without, but only relatively small. Because the government's ability to attract investment is stronger, the start and completion of the project are more secure. But if the government collapses, this project also has risks. But in theory, this probability is relatively small. The biggest risk of private institutions and developers' projects is that if they do not attract enough investment, problems may occur at the start and completion of the project, and it is difficult for investors to guarantee the cancellation and repayment of conditional green cards.

Myth 2: Different portfolios have different risks.

When analyzing the risk of EB- 5 investment immigrants, some experts in the industry said that the risk analysis needs to look at the way of its portfolio, which parties are composed, and their respective proportions determine the risk coefficient of EB-5 investors. For example, an EB-5 project portfolio includes government funds+commercial banks +EB-5 investors+enterprises (companies), of which government investment funds account for 50%, EB-5 investors only account for 15%, and others account for 35%. According to the propaganda of some enterprises, because the government investment funds account for a relatively large proportion, this project belongs to the security project, which can ensure the safety of green cards and funds.

Myth 3: Green card security = capital security

Due to the possibility of capital risk in government-participated projects, green card security and capital security belong to two completely different concepts, but applicants often confuse these two concepts. According to the reporter's investigation, there are indeed some projects that emphasize that "the project is located in a prosperous business district, with unlimited business opportunities and a return of 10%". , to show that there is no risk in the repayment of 500,000 investment funds, and there is investment income.

Myth 4: The risk of started projects is less than that of non-started projects.

When analyzing the risk of EB-5 project, the risk coefficient of the project that has already started is relatively small, because starting work means creating employment opportunities. Projects that have not started mean that jobs have not been created, either because fundraising is still going on or because of other reasons, and the time for canceling the conditional green card is two years. If the project can't start within two years, or it starts late, the risk of canceling the conditional green card can't be completed, which is very risky for investors' green card security.

This kind of risk is generally obvious in a single project. "Because of a single project, EB-5 funds are needed to start construction. Therefore, when choosing a single project, choosing a project that has already started is definitely better than choosing a project that has not yet started. "

Myth 5: The higher the capital gains, the more secure the repayment.

It is understood that Canadian investment immigrants clearly stipulate that repayment is interest-free. EB-5, an American investment immigrant, has no government guarantee. Therefore, in terms of repayment, the operating mode of each regional center is different. There are promises to repay within five years, and there are also promises to pay certain interest in addition to the principal, which is the project income advocated by the intermediary.

Applicants who invest in EB-5 must understand that there are so many regional centers in the United States that there is no reason to accept EB-5 applicants. The purpose of EB-5 investors to borrow money is that the interest rate is lower than that of banks, while the interest rate of borrowing money from banks is higher. Therefore, it is generally unrealistic or risky to have a project that promises high returns.