6.EB5 EB5 Risk Warning

EB5 investment immigration project is essentially to provide financing channels for high-risk private fund-raising projects that banks refuse to provide loans and American investors refuse to invest. Because we couldn't get a formal green card in the end, only China investors who didn't know the inside story participated, and no one in Europe and developed countries participated in such projects for a long time. According to the 20 13 federal statistics of the United States, 46.8% of the projects approved by American banks are insolvent within three years, and the bad results of these EB5 projects that even banks and American investors refuse to lend can be imagined.

On May 30th, 20 13, USCIS adopted a new policy memorandum, which had the greatest impact on EB5 investment immigrants. First of all, there are many hidden dangers in the calculation of the working position of the EB5 loan project. Secondly, a lot of construction work is no longer included in the calculation of the working position. In addition, the Immigration Bureau clearly stipulates that EB5 projects, which mainly rent or sell real estate, cannot meet the requirements of the workplace. Even if the investors involved in such projects have obtained the temporary green card (I-526), the formal green card (I-829) will be rejected in the final review.

I. Risks of loan and bond projects

The risk of EB-5 bond and loan projects is far greater than that of ordinary investment projects. For EB5 investors, they are faced with the double highest risk of being refused a green card and capital triangle debt. The reasons why they applied for a formal green card I-829 are as follows:

1. Lending at different levels into multi-angle debt, EB5 green card, and repayment is not guaranteed:

EB-5 bond and loan projects have a * * * character, that is, these projects look strong and there are many participants, which makes EB5 investors mistakenly underestimate the double highest risks of green card rejection and capital triangle debt. Therefore, the United States Federal Immigration Service (USCIS) specially supervised it.

The model of this kind of loan is layer-by-layer lending, and its structure is more complicated than that of domestic triangular debt. Because the companies that receive the investment funds do not directly participate in the project construction, they just lend the investment funds to one or more companies layer by layer. After these companies get loans, they carry out multi-layer equity conversion, and each shareholder tries every means to seize the loans and become their own. Finally, a multi-angle debt relationship is formed, which is unclear and chaotic. Whether it is infrastructure projects, building construction or community construction. It is impossible to determine which part was built with EB-5 investment or in court. I can't even think about going to court again.

EB-5 bonds and loan projects are not mortgaged by real estate and other substantive assets, but are guaranteed by a guarantee contract given to investors by the project party without credibility. At that time, as long as one or several of them go bankrupt, investors will be trapped by a typical triangular debt, and the collection company and the payment company will shirk each other. Except for unfinished projects, the green card application will not succeed.

2. The Immigration Bureau could not judge the number of jobs, which led to the failure of EB5 green card application:

The key indicator for USCIS to approve EB5 investor's green card is to confirm that investors have actually created more than 65,438+00 jobs. The immigration law passed by the US Congress has repeatedly stressed that if the number of jobs cannot be confirmed, the green card cannot be approved.

The Immigration Bureau is particularly strict in hearing projects financed by bonds and loans. The main reason is that this loan model makes it impossible for the Immigration Bureau to clearly determine which jobs have been created by EB5 investors' loans. Many project parties use flowers instead of trees to transfer loans with complex funds, which has aroused the high vigilance of the immigration bureau against work fraud and Jerry-building. Due to the complex structure of the multi-angle debt model, the Immigration Bureau has to invest a lot of manpower and material resources to analyze and judge, which leads to the problem that all EB5 investors in bridge loan or mezzanine loans are faced with a long review time and finally the green card I-829 is rejected.

3. Investors from the United States, Europe and other countries avoid loan projects:

Many American or European participants in loan projects, without exception, are reluctant to issue loans without asset collateral, because the risk of not repaying loans is extremely high. Participants set many terms of participation, such as requiring other funds to be in place before investment, and if the situation changes slightly, the project can be withdrawn unscathed. EB-5 investors have no right to deeply understand these terms. Once EB-5 investment money enters the project, it is often used as the early operation and management fee of the project and spent first.

With the development of the project, as long as one of the many participants quits, the whole project will be aborted like a domino. The guarantee in the hands of EB-5 investors has become a dead letter in the lawsuit of multi-angle debt. Since there is no specific asset mortgage, EB-5 investors have no right to demand the sale of any assets to repay the loan. This is why the outstanding rate of EB-5 bonds and loans is very high.

4. Jobs in EB5 projects such as loans and bonds are calculated as green card deadlock.

The loan EB5 project misleads EB5' s capital investment through loans, debts and bonds. This kind of project is extremely risky, and the industry estimates that it is an unfinished project. Only unwitting EB5 investors in China can contribute. Companies that accept investment funds do not directly participate in project construction, but only lend investment funds to one or more companies. Because loan projects have different sources of funds to participate in the investment, EB5 investors' funds are only a part of the total investment, and there are layers of loans. The complex multi-angle debt model makes it impossible for the Immigration Bureau to accurately identify the source of each job. If the jobs generated by other loans are used in the calculation of investors' green card applications, it is obviously a violation of Article 203(b) of the US Immigration Act (INA). Especially, at present, it is common that the project side deliberately reloans funds to many parties, and forges and calculates high positions, which urges the Immigration Bureau to strictly examine EB5 loan projects, resulting in a small pass rate of investors' formal green card (I-829). At that time, as long as it&; Nbsp; When one or more companies quit or go bankrupt, investors will be trapped by a typical triangular debt. The collection company and the payment company shirked each other, the project was unfinished, and there was no way to collect debts. According to the case report released by the Immigration Bureau in June 20 13, these cases mainly came from new york and LA. For all EB5 loan projects in these two areas, the Immigration Bureau began to investigate and review, involving hotels, apartments and so on. The bigger the project, the more serious the problem of workplace calculation. Even if the temporary green card (I-526) has been approved, the transfer to a formal green card (I-829) will be delayed for a long time and eventually rejected. Seriously, the project parties and intermediary financiers never disclose the truth to investors.

2. High risk of hotel apartment project

1.EB5 Hotel and apartment project, with inflated cost of 3 times, and the investor's green card was revoked:

The primary auditing standard for USCIS to issue EB5 permanent green card is to determine whether EB5 investors have actually created 65,438+00 jobs.

When the Immigration Bureau investigated the hotel and apartment projects invested by EB5 in March, 20 12, it was found that the project owners generally inflated the project cost several times and earned tens of millions of dollars, and the remaining construction costs could not generate enough jobs. The project party calculated the economic model by inflating the cost by three times, faked and raised the number of jobs, and adopted fraudulent means to meet the requirements of the immigration bureau for the number of jobs. A completely different set of false data is used when financing investors. At the same time, the project side uses all kinds of completely different fake data to deal with different audit and financing needs.

Due to the extremely serious problem, the US Federal Immigration Service adopted a new policy memorandum on May 30th, 20th13rd, and set up an anti-fraud investigation team specifically for the EB5 project of hotels and apartments, announcing a thorough investigation and monitoring of the construction cost and the number of workers in all hotels and apartments. Once the inflated project cost is verified, the Immigration Bureau will reject the EB5 project investor's application for a permanent green card (I-829) according to the provisions of the immigration law on the number of people who do not meet the requirements of jobs, and the previously approved green card (I-526 or I-829) will also be traced and cancelled.

2. Use hotel and apartment brands to steal column content:

This kind of hotel or apartment project has the same means of inflating the project cost. Those hotel projects, such as Hilton/Hilton,/Marriott,/Hyatt, Windham, etc., take advantage of the blind trust of domestic investors in the brand, and actually only build nominal franchised hotels, and only build budget hotels under the brand, which is equivalent to domestic Motel and Hanting, that is to say, investors spend far more than five-star money to build budget hotels.

According to the ReedConstructionData industry standard referenced by the Immigration Bureau, the actual cost of luxury apartments in the United States is 105 USD/square foot, excluding decoration. The actual cost of a budget hotel is 126.5 USD/square. The actual cost of a high-end five-star hotel excluding decoration is 163 USD/m2. Finished does not include decoration. If the cost quoted by the project party is higher than the industry standard, the Immigration Bureau will determine that a large amount of investment funds have not really been invested in creating substantive jobs, and the green card application will be rejected because it cannot meet the jobs.

3. Sunset industry, American apartments and hotels have closed down:

In American hotels, the supply of apartments has exceeded the demand, which belongs to the sunset industry, and the overall occupancy rate is less than 45%. At the same time, the price competition is vicious, and finally the insolvent and bankrupt are auctioned at less than half price. HVSGlobal, the authoritative hotel and residential evaluation group in the United States, released data. Since 2008, American local funds have completely withdrawn from hotel and apartment construction projects, and only EB5 investment funds are taking this risk in the whole market.

Newly built hotels and apartments are bound to go bankrupt because:

1) The project (party) will increase the cost by three times (HardConstructionCost), and investors will face high management fees and litigation of residents' rights protection after making money. For example, the average monthly management fee for a two-bedroom apartment in new york 1 Hall is $2,600, and the minimum monthly management fee is $0,200/KLOC-0. More than the average annual management fee of apartments in North, Shanghai and Guangzhou.

2) According to the EB5 investment regulations of USCIS, at least 65,438+00 full-time employees must be employed for every $500,000 investment. The average annual salary of full-time employees in every hotel or apartment in the United States exceeds $40,000, and with various insurances and benefits, the annual salary of 10 full-time employees exceeds $400,000. If 10 employees cannot be employed within 5 years, the EB5 investor's green card application will fail.

In other words, according to the above-mentioned high costs and staff expenses, the annual occupancy rate of these hotels or apartments must reach 225%, so that investors can get a green card and muddle through. When EB5 investors quit five years later, no institution will provide refinancing to pay the costs and expenses that are several times higher than the market.

4. Other misleading means of hotel projects:

1) In fact, this brand-name hotel is not invested by the hotel group, but a HotelFranchise, which is only the downstream brand of the brand-name hotel group (budget hotel grade). In other words, operating this hotel can only be at your own risk and be responsible for your own profits and losses. If the project loses money, the hotel group will not assume any debt responsibility.

2) It is claimed that the hotel occupancy rate will be as high as 70% or more. In fact, the competition in the hotel industry in the United States has always been fierce. At the best time, the average occupancy rate is around 45%, and the average occupancy rate of quite a few hotels is even less than 35%.

3) The hotel industry in the United States is a sunset industry, but people in China don't know the present situation of the hotel industry in the United States. The project party made full use of the perfect experience and good impression of China people staying in multinational brand hotels, as well as their fantasy of owning shares in brand hotels. In fact, EB5 investors don't take shares in brand hotels at all, but only take some shares in hotels. The project only paid a high initial fee to the brand hotels. Once the project is completed, all debts are transferred to EB-5 investors. Therefore, what you get is the highest cost and worthless shares.

4) Beautify hotels and apartment projects through domestic intermediaries. There will be many so-called success stories, and the so-called success rate of 100%, but it will never tell you the fact that the inflated cost of the project was investigated and prosecuted by the US Immigration Bureau.

5) The concept of beautifying downtown areas of big cities. The real aristocratic areas in the United States are all in the suburbs, dozens of miles away from the city. However, the downtown areas of big cities in the United States are not the aristocratic areas imagined by Chinese people. More than 90% of the downtown area has a high crime rate, which is also the first choice for the homeless, because many municipal rescue stations are located here. The budget hotels built in these places have no choice but to become the strongholds of criminals, and lawsuits and lawsuits come and go. It is impossible for hotels to recover their investment in such areas.

5. The hotel apartment project violates the taboo of the Immigration Bureau:

When EB-5 finalized the permanent green card (I-829), the Immigration Bureau was most concerned about whether the project party had cheated on the number of jobs, because the original intention of the Immigration Bureau to set up the EB-5 immigration project was to bring at least 65,438+00 American jobs for every $500,000 EB-5 investment. Therefore, the false high cost of hotel projects is a taboo for the Immigration Bureau, and investors who apply through these projects are also implicated, leaving a permanent bad record in the Immigration Bureau, which will lead to endless future troubles. Unfortunately, almost all the hotel and apartment construction projects promoted in the domestic market are inflated, and the consequences are unimaginable.

Summary:

Because almost all EB-5 projects in hotels and apartments adopt the means of false high fees, it will definitely lead to the final failure of green card applications. Moreover, the hotel and apartment industry is fiercely competitive in the United States, which is extremely unfavorable to investment and immigration.

Third, the risk of tea EB5 project in the city center

According to the regulations of the US Immigration Bureau, the project applying for EB5 US investment immigration with an investment of US$ 500,000 must be located in the tea area. There are two kinds of tea areas defined by the Immigration Bureau, the first is the suburb with less population, and the second is the TargetedEmploymentArea in big cities. At present, in the EB5 hotel, apartment and business building projects on the market, the project party beautifies the tea area in the city center as a so-called "golden location", which covers up the great risks of high crime, high pollution and high compensation, and finally leads to the serious consequences of the failure of the application for permanent green card (I-829).

1. The tea area in the urban area is by no means a "prime location"

China's real estate has only developed for more than ten years, and there is no land to develop in Beishangguangwuhuan. Even in the center of second-and third-tier cities, there is no land to develop for a long time. The real estate industry in the United States has matured for more than half a century, and the downtown area of the metropolis is actually listed as a tea area waiting for EB5 investors to develop. Investors can judge how deep the trap is.

Due to high crime rate, high pollution and high unemployment rate, the downtown tea area is the worst school district in the United States. However, many EB5 projects take advantage of people's unfamiliarity with American downtown, and deliberately confuse these dangerous downtown tea areas with the concepts of "prime location" and "land gold" in the downtown of Beishangguang, such as Manhattan in new york and Hollywood in Los Angeles. In fact, after a little analysis, everyone can understand that the real prime location is absolutely impossible to be designated as tea.

2. The high crime rate in urban tea areas has affected the application for green card.

New york, San Francisco, Los Angeles, Seattle, Miami and Chicago in the United States are listed as tea areas because there are violent gangs of the lowest ethnic groups, such as blacks, and high crime rates such as robbery, shooting, drugs and prostitution. The famous murder of CecilHotel, a China girl in Los Angeles, happened in this so-called downtown area. (or search: China girl died strangely in Los Angeles) The article clearly wrote: "The CecilHotel where she lives is located in the center of Los Angeles, and the security situation in this area is very poor. Many drug addicts, robbers and tramps gather here. " Being an owner in these downtown tea areas will definitely involve various criminal cases of drug trafficking and murder, which will directly affect the background investigation when applying for a formal green card (I-829).

3. The environmental pollution in urban tea areas is serious.

EB5 investment projects in the downtown tea area of metropolis can't attract American investors. In addition to the violent crimes mentioned above, there is also the problem of serious industrial pollution. For example, Brooklyn, SODO (Seattle) in new york and Riverside (California) near Los Angeles are all famous industrial pollution areas. According to American law, residential buildings built in industrial pollution areas must be cleaned by institutions with special licenses. This cleaning fee will even exceed the cost of the building itself, and the project side often avoids talking about it. Investors spend several times the normal cost for no reason to build a building in a heavily polluted industrial zone, which is not worth the candle. In the future, potential lawsuits caused by environmental damage will emerge one after another.

4. It is expensive for tenants in downtown tea areas to defend their rights.

Commercial or civil tenants of hotels, apartments or commercial buildings in downtown tea areas keep suing their owners for robbery, murder and rape. Judges and juries in the United States are on the side of vulnerable groups, and compensation for personal injury, sexual harassment or death cases ranges from millions or even tens of millions of dollars. Therefore, in the end, all the projects invested in the downtown tea area are unable to make ends meet, and the compensation for rights protection lawsuits is bound to become a bottomless pit for the project to lose money. The failure of the project will directly lead to the failure to meet the requirements of the Immigration Bureau for the number of jobs, and eventually lead to the rejection of the green card.

Summary language

Based on the above reasons, the real estate in the tea area of the Metropolitan Center cannot escape debt management and bankruptcy auction, which cannot meet the requirements of the Immigration Bureau for the number of people in the workplace, and there is no guarantee for investors to apply for a green card.

In fact, the real aristocratic areas in the United States are all in the suburbs, dozens of miles away from the urban area. Therefore, EB5 investors should be alert to the so-called "downtown" and "good location" in big cities, especially those projects labeled as "prime location" and "land is precious". The project party will not voluntarily disclose huge hidden dangers, and investors may have fallen into the end of green card rejection and investment loss when they find out. Investors should choose a better tea area in the school district and examine the long-term profit model of the project, so as to ensure a win-win situation for investment and green card.

Fourth, the participation of state, city and county governments in EB5 project makes the shortcut fall into a quagmire.

At present, another misunderstanding of EB5 investment immigration is that it is taken for granted that as long as the state, city and county governments participate, it is the most secure project, but the fact is completely counterproductive. This kind of project is often the most complicated and costly, which leads to the shortage of jobs and the failure of the green card. In fact, the reason is very simple. The projects that states, cities and counties at all levels in the United States participate in are not for profit, but mainly for public welfare. In addition, all the funds of state, city and county governments come from taxpayers, and the first priority of project fund compensation is always taxpayers. In addition, because the state, city and county governments participate in the project, even if there is a deficit, it is absolutely impossible to sell the completed municipal property to mortgage investors.

Most importantly, EB5 investment immigration is based on the US federal immigration law, and no state or county has the right to give investors any priority in the green card review, which has long been clear in the immigration law. If any department or official makes any investment or green card commitment to investors, it is suspected of violating the law and fraud, and will be investigated and dealt with by the FBI. Therefore, in addition to the high cost, unprofitable project, complicated examination and approval procedures, insecure job calculation and insecure funds. The shortcut to immigration that investors take for granted has actually become a quagmire.

Summary language

It is difficult for projects involving state, city and county governments to generate enough jobs, and the final review of the official green card (I-829) is likely to be in the foreseeable future, or even rejected. In addition, investors must avoid projects that mainly lease or sell real estate, including villas, apartments, shopping malls, shopping centers and other EB5 projects that mainly focus on the construction industry. After the Immigration Bureau passed the new policy memorandum, it is very unlikely to apply for immigration through these projects.

Five, EB5 construction workers are not included in the calculation of direct jobs.

EB5 projects, which mainly focus on building or infrastructure construction, have been officially listed on the visa refusal list by the Immigration Bureau. The reason is very simple, because the Immigration Bureau has made it clear in the new memorandum that the construction work is temporary work, and these jobs will disappear soon after the end of the construction period. Therefore, it is not a direct job after investment, but only an indirect job. Therefore, all projects that rely on the construction industry to calculate jobs will face the final rejection of the investor's official green card (I-829).

6.EB5 The green card for leasing or selling real estate projects was cancelled.

On May 30th, 20 13, the policy memorandum of the Immigration Bureau refused EB5 investors to apply for immigration by investing in villas, apartments, office buildings, urban reconstruction, urban infrastructure, shopping malls, shopping centers and warehouses. The uniqueness of this kind of project is that once the project is completed, the real estate will be leased or sold to other enterprises or individuals, and the Immigration Bureau has ruled that any jobs brought by leasing or selling cannot be included in the calculation of the green card application. Immigration Bureau (USCIS) has ruled: "Even if these properties are not built in EB5 projects, those enterprises and individuals will buy or lease other properties and hire employees, so these jobs cannot be created after EB5 investment." In addition, the construction work is not included in the calculation of direct work, so it is impossible to guarantee 65,438+00 jobs for each investor in this EB5 project that relies on renting or selling real estate. Investors who have participated in this project before will have their official green cards cancelled by the Immigration Bureau at the final review (I-829).

7. Congress drafted EB6 to replace EB5.

EB5 investment immigration has triggered tens of thousands of lawsuits, and the situation has been seriously out of control. The US Congress will approve the Immigration Bureau to launch the EB6 investment immigration project before the end of 20 15. EB6 investors can set up their own projects, control their own funds, operate their own businesses, invest $250,000, hire five full-time employees every year, and be converted into formal green cards after two years.

8. Virtual employment calculation

Chinese in EB-5 region and the project side forged the figures of the economic calculation model, and the number of employees created by fiction was enlarged by 3 to 5 times, or infinitely enlarged according to the needs of project promotion. The so-called experts who make economic calculation models are all hired by the project party to complete this report according to the false original data provided by the project party. When approving the temporary green card I-526, the Immigration Bureau mainly examines the legal source of EB5 investors' funds, in other words, it is good to put the funds into the project party's account. At this time, the funds have not been operated. How to judge the authenticity of the employment figures generated by the falsification of economic calculation models? However, when approving the official green card I-829, the audit department and experts of the Immigration Bureau exposed these forged documents, which led to the official green card I-829 being rejected.