Announcement

Collapse
No announcement yet.

Article: SEC Charged Los Angeles-based EB-5 Lawyers with Securities Fraud By Mona Shah, Esq. and Yi Song, Esq.

Collapse
X
Collapse

  • Article: SEC Charged Los Angeles-based EB-5 Lawyers with Securities Fraud By Mona Shah, Esq. and Yi Song, Esq.

    How US-China Relations will Affect EB-5 Investment? - From APEC to Visa Extension

    by


    Asia-Pacific Economic Cooperation or APEC has been the talk of the town. Established in 1998, APEC is a premier forum to facilitate the economic growth, cooperation, trade and investment in the Asia-Pacific region. The world’s two biggest economies - United States and China are both members in APEC.

    Other than the US and China, 19 other member economies are part of APEC: Australia, Brunei Darussalam, Canada, Chile, Hong Kong (China), Indonesia, Japan, Republic of Korea, Malaysia, Mexico, New Zealand, Papua New Guinea, Peru, The Republic of the Philippines, The Russian Federation, Singapore, Chinese Taipei, Thailand, Vietnam, all of which account for 40 percent of the world's population, 54 percent of its economic output and 44 percent of trade

    Since President Obama arrived in Beijing on November 10, 2014. Several encouraging consensus has been reached with regard to reducing tariffs for Chinese electronics products and visa extension. The authors examine how these issues, along with an overall improved climate of cooperation, will affect the EB-5 investment program.

    Stronger Economic Ties between US and China

    November 10, 2014, the State Department announced that effective from November 12, 2014, the US and China will reciprocally increase the validity of short-term business and tourist visas to 10 years and student and exchange visas to 5 years. Business and tourist visas or the B1/B2 visas will increase in validity from one (1) year to ten (10) years. F1 student visas and F2 dependent visas, M1 vocational students and M2 dependent visas, J1 exchange visitor and J2 dependents visas will increase in validity from one (1) year to five (5) years or the length of their educational program.

    US-China relations play an important role in the stability of the global economy. The world’s two largest and most powerful economies have increasingly become codependent of each other. US-China relations was at a low point prior to APEC. The US initiated a 12-nation Trans-Pacific Partnership (TPP)[1] trade agreement forum excluding China and Russia. The TPP is widely viewed as an attempt to balance if not repress China’s rise by establishing a larger US presence in the Pacific region.

    The visa extension announced at APEC has undoubtedly elevated US-China relations and is no doubt good news for business and investment. The White House stated in a press release[2] that “This (visa extension) arrangement will improve trade, investment, and business ties by facilitating travel and offering easier access to both economies. The United States hopes to welcome a growing share of eligible Chinese travelers, inject billions into the US economy, and create enough demand to support hundreds of thousands of additional US jobs.”

    The Significance of Visa Extension

    According to the White House press release, “China is the fastest-growing outbound tourism market in the world, and in 2013, 1.8 million Chinese travelers visited the United States, contributing $21.1 billion to the U.S. economy and supporting more than 109,000 American jobs.”

    Chinese travelers consistently rank the United States as their most-desired destination. It is expected that the visa extension program will help the US achieve the goal to have 7.3 million Chinese travelers to visit the United States by 2021, contributing nearly $85 billion a year to the economy and supporting up to 440,000 U.S. jobs.”[3]

    “28 % of all foreign students and exchange visitors in the United States originate from China. Chinese students in the United States spent $8 billion in 2013, an increase of nearly 24% over the previous year.”[4]

    Increased Demand for EB-5 Visas from China

    Business/tourist visas and student visas may enable the applicants to easily visit the United States but if applicants hope to live and work in the United States on these visas, there are considerable restrictions, most importantly, an applicant cannot work for money or earn on a B1/2 visa. The EB-5 Program becomes the best option for applicants who would like to continuously live and work in the US. Despite the prolonged processing time, EB-5 investment is still the fastest employment based route to obtain a US permanent residence for Chinese applicants.

    During the authors’ trips to China, we noticed that the demographics of most EB-5 investors have changed over the past few years. The universal purpose of almost all EB-5 investors from China is for their children’s future. A few years ago, we have seen EB-5 investors have their children pursing higher education in the US. Now more and more investors send their children to pursue secondary and early education.

    EB-5 Visas and Chinese Outbound Investment

    The visa extension will facilitate Chinese investors to visit and make investments in the US. EB-5 is a perfect option for Chinese investors for the following reasons: Chinese government has been encouraging overseas outbound investment in the past decade. The rise in Chinese investment in the U.S. is no accident. According to the Chinese Ministry of Commerce, in 2002, only $2.7 billion in FDI flowed out of China. But in 2013, China poured $108 billion into direct investments overseas. President Xi addressed the business leaders on APEC that the outbound Chinese investment will total $1.25 trillion[5] over the next 10 years and 500 million Chinese tourists will go abroad to visit.

    Why does the Chinese government encourage outbound investments overseas? The answer lies in the fact that this decision is driven by China’s adjustment of the economic growth model. In the past, the overseas opportunities and the Chinese outbound investment was limited to natural resources and building neighboring country infrastructure to stimulate the cross-border trade[6]. The shift in the growth model emphasizes on upgrading Chinese companies’ technology, augmenting management skills, pursuing higher levels of the value chain and gaining global competitiveness. From a macroeconomic perspective, the strengthening of the Chinese currency RMB provides an advantage of outbound investment.

    For the wealthy and the elite in China, the reasons to immigrate include educational and employment opportunities for children overseas (78%), preferable climate and greater economic security (73%), and health care and social services (18%). [7]

    The greatest obstacle to outbound Chinese FDI is not protectionism or discrimination[8], but the dearth of local knowledge, management skills, and sophistication among Chinese investors. According to the former chairman of the supervisory board of China Investment Corp., China’s sovereign wealth fund, 70% of China’s investment overseas is “unsuccessful.” EB-5 projects provide natural solutions for Chinese investors who lack local knowledge, language and management skills and who are seeking permanent residence through investment. EB-5 investors will have a limited role in the entity they invest in. US developers and managers develop and operate the projects on their behalf.

    The Federal Reserve is expected to raise the interest rates by the Spring 2015 to control the rising inflation and over spending, then landing standards will be tighter. The developers will seek alternative financings. The supply and demand relationship will cause an inflow of more capital from foreign capital market. EB-5 financing serves as a valid option for the US developers.



    [1] Xi urges Faster APEC Talk on China backed Free Trade Area, Michael Martina, November 11, 2014, Reuters, http://www.reuters.com/article/2014/11/11/us-china-apec-idUSKCN0IV04520141111

    [2] Nov. 10, 2014 White House Press Release: FACT SHEET: Supporting American Job Growth And Strengthening Ties By Extending U.S./China Visa Validity for Tourists, Business Travelers, and Students http://www.whitehouse.gov/the-press-office/2014/11/10/fact-sheet-supporting-american-job-growth-and-strengthening-ties-extendi

    [3] Id. at paragraph 3

    [4] Id. at paragraph 4

    [5] Xi Dangles $1.25 trillion as China Counter US Pivot to Asia, Bloomberg News, November 9, 2014 http://www.bloomberg.com/news/2014-11-09/president-xi-says-7-percent-gdp-growth-makes-china-top-performer.html

    [6] The Rise in Chinese Overseas Investment and What it Means for American Business, China Business Review, November 7, 2014, http://www.chinabusinessreview.com/the-rise-in-chinese-overseas-investment-and-what-it-means-for-american-businesses/

    [7] Half of China’s Millionaires Plan to Leave Country within Five Years, South China Morning Post, http://www.scmp.com/news/china/article/1592975/47-cent-chinese-super-rich-want-leave-country-barclays-survey?page=all

    [8] The Coming Deluge: Should the US fear Chinese Investment? Minxin Pei, Fortune Magazine, October 28, 2014 http://fortune.com/2014/10/28/us-china-foreign-investment/

    Mona Shah & Associates reserve and hold for their own use, all rights provided by the copyright law, including but not limited to distribution, producing copies or reproducing, sales of this document. This article is a general summary of complex securities law issues. No legal advice is provided in this article. Please consult the securities attorney for advice applicable to your particular circumstances.

    All rights reserved by Mona Shah Associates ©


    About The Author

    Mona Shah, Esq. Mona Shah, Esq. is the principal of Mona Shah & Associates in New York City. The firm has assisted many Regional Centers and Investors in navigating this complex, nuanced and constantly changing area of immigration law. Mona has more than 18 years of legal experience in immigration law and extensive knowledge in EB-5 law. Mona's substantial litigation background includes her representation of clients in both state and federal courts. She has handled complex immigration law appeals before the US Circuit Courts of Appeal nationwide. Before coming to the US, Mona was a crown prosecutor in the UK. Mona has authored and published numerous articles and has spoken extensively both in the US and overseas.



    Yi Song, Esq. Yi Song, Esq. is an attorney at Mona Shah & Associates in New York City. She is also licensed to practice law in People's Republic of China. Before joining Mona Shah & Associates, she worked at a securities litigation firm in Manhattan. She clerked at China's high court - the Supreme Court of People's Republic of China. At Mona Shah & Associates, Yi practices EB-5 law and securities law and works on many successful EB-5 capital raising projects. She obtained her LL.B. degree from Beijing Foreign Studies University and she is a graduate from Georgetown University Law Center in Washington, DC. Her articles on EB-5 and securities law are published by LexisNexis, AILA, eb5info.com, ILW. Yi is a native speaker of mandarin Chinese. She speaks fluent English and basic French.


    The opinions expressed in this article do not necessarily reflect the opinion of ILW.COM.

      Posting comments is disabled.

    Categories

    Collapse

    article_tags

    Collapse

    There are no tags yet.

    Latest Articles

    Collapse

    • Article: The EB-5 Immigration Program and the Investors Process By H. Ronald Klasko
      ImmigrationDaily
      The EB-5 Immigration Program and the Investors Process by H. Ronald Klasko At Klasko Immigration Law Partners, LLP, we represent businesses, individuals, and organizations across the world with various aspects of employment-based immigration. The EB-5 Immigrant Investor Visa Program is one program through which we help wealthy foreign nationals with no employment sponsorship or family in the United States gain permanent residence status. In the infographic below, we highlight the steps of the EB-5 program and the investment requirements associated with it, so individuals and companies alike can understand the program before coming to Klasko Immigration Law Partners, LLP for assistance. This post originally appeared on www.klaskolaw.com. Reprinted with permission. About The Author H. Ronald Klasko is recognized by businesses, universities, hospitals, scholars, investors and other lawyers as one of the country's leading immigration lawyers. A founding member of Klasko, Rulon, Stock & Seltzer, LLP and its Managing Partner, he has practiced immigration law exclusively over three decades. Under his leadership, the firm was chosen with five other firms by Chambers Global in 2006, 2007, 2008 and 2009 as the top U.S. business, hospital and university immigration law firm. Ron, himself, was named as the world's most respected corporate immigration lawyer (The International Who's Who of Business Lawyers 2007 and 2008) and one of the country's top immigration lawyers by clients and other immigration lawyers who said he is revered for coming up with unique arguments that can save a clients (Chambers Global). A former National President of the American Immigration Lawyers Association (AILA), Ron served as General...
      08-20-2018, 08:15 AM
    • Article: Immigration Judges’ Union Fights for Judicial Independence By Karolina Walters
      ImmigrationDaily
      Immigration Judges’ Union Fights for Judicial Independence by Karolina Walters The National Association of Immigration Judges (NAIJ), the union that represents the nation’s immigration judges, is challenging the government’s decision to remove an immigration judge from a well-known case and replace him with a judge who immediately ordered the immigrant in the case deported. NAIJ’s grievance addresses the treatment of one immigration judge, but its resolution will have implications for judicial independence throughout the entire immigration court system. The grievance was filed on behalf of Philadelphia-based immigration judge Steven A. Morley, who was presiding over the case of Mr. Reynaldo Castro-Tum. Castro-Tum’s case rose to national importance earlier this year when Attorney General Jeff Sessions chose to refer the case to himself to reconsider the Board of Immigration Appeals’ previous decision in the case. In reconsidering the decision, Sessions effectively eliminated judges’ use of administrative closure, a docket management tool. Sessions sent Castro-Tum’s case back to Judge Morley, noting that the immigration court order Castro-Tum removed if he did not appear at his next hearing. Castro-Tum did not appear at the next hearing. However, Judge Morley continued the case to resolve whether Castro-Tum received adequate notice of the hearing. Due process requires, at a minimum, that an individual be given notice of proceedings and an opportunity to be heard by a judge. But before the next hearing could take place, the Executive Office for Immigration Review (EOIR) replaced Judge Morley with an Assistant Chief Immigration Judge who ordered Castro-Tum removed when he did not appear at court again. In their grievance, NAIJ asserts that the decision to remove Judge Morley from Castro-Tum’s case and reassign many other cases from his docket resulted in unacceptable interference with judicial independence. The grievance specifically claims that EOIR’s actions violate immigration judges’ authority under the regulations to exerci...
      08-17-2018, 11:12 AM
    • Article: Indirect Refoulement: Why the US Cannot Create a Safe Third Country Agreement with Mexico By Sophia Genovese
      ImmigrationDaily
      Indirect Refoulement: Why the US Cannot Create a Safe Third Country Agreement with Mexico by Sophia Genovese The Trump Administration is seeking to create and implement a safe third country agreement with Mexico . Under this agreement, asylum seekers arriving at the US border who have travelled through Mexico would be denied the ability to file their asylum claims in the US. Such an agreement would trample on the rights of asylum-seekers, violating both international and US asylum law. In particular, the US would be violating the international principle of non-refoulement , which provides that no State “shall expel or return (“refouler”) a refugee in any manner whatsoever to the frontiers of territories where his [or her] life or freedom would be threatened,” where Mexico has a proven track record of being anything but safe for asylum seekers . The US has also codified Article 33(1) of the Refugee Convention into Section 208(a)(2)(A) of the Immigration and Nationality Act (INA) which provides that it will not return an asylum seeker to his or her country of origin, but may, at the determination of the Attorney General, remove the asylum seeker to a “safe third country… where the [asylum seeker] would have access to a full and fair procedure for determining a claim to asylum or equivalent temporary protection.” Although Mexican officials have not yet indicated whether they would sign a safe third country agreement with the US, asylum advocates should proactively seek to prevent such a devastating policy with a country that lacks adequate asylum protections. As reported by Human Rights First and Amnesty International , 75 percent of asylum seekers apprehended and detained by the National Institute of Migration (INM), the Mexican immigration enforcement agency, were not informed of their right to seek asylum. Even if asylum seekers are able to make their claims, only 30% of the asylum proceedings are ever concluded , and even fewer are granted, leaving many bona fide asylum seekers stranded without a resolution. The treatment of unaccompanied minors’ asylum claims in Mexico are even more dismal. Of the 35,000 minors apprehended by the INM in the first half of 2016, only 138 were able to apply for asylum , of which only 77 were granted protection. Beyond the failing asylum system in Mexico, asylum seekers are also in extreme danger of kidnapping, murder, rape, trafficking, and other crimes by INM officers and civilians. A safe third country agreement with Mexico would violate the United States’ international obligations under the 1967 Optional Protocol to the Refugee Convention, to which we are a signatory, which adopts by incorporation the obligations outlined in the 1951 Refugee Convention, to which the US is not a signatory. Take the example of an asylum-seeker, Mrs. H, who is fleeing politically-motivated violence in Honduras. Her husband, Mr. H, was a vocal political activist who opposed the National Party and members of the Honduran government. Mr. H began to receive death threats due to his political beliefs and reported such threats to the authorities. The authorities, however, di...
      08-16-2018, 02:32 PM
    • Article: Flawed Statistics Undermine USCIS/ICE/SEVP’s Restriction of D/S for Unlawful Presence By Eugene Goldstein, Esq.
      ImmigrationDaily

      Flawed Statistics Undermine USCIS/ICE/SEVP’s Restriction of D/S for Unlawful Presence

      by


      On August 9, 2018 USCIS published a “Policy Memorandum” restricting the 20-year-old calculation of Duration of Status (D/S) for F-1, J-1 and M-1 entrants (and their derivative families). https://www.uscis.gov/sites/default/...immigrants.pdf

      USCIS also published an announcement (hereinafter “announcement”) “USCIS Issues Revised Guidance on Unlawful Presence for Students and Exchange Visitors https://www.uscis.gov/news/uscis-iss...hange-visitors , and a general discussion “Unlawful Presence and Bars to Admissibility” ...

      08-15-2018, 12:57 PM
    • Article: Update On Express Entry Immigration To Canada By Edward C. Corrigan and Selvin Mejia
      ImmigrationDaily
      Update On Express Entry Immigration To Canada by Edward C. Corrigan and Selvin Mejia On January 1, 2015 the Federal Conservatives introduced significant changes to Canada’s economic immigration program. Formerly called the Skilled Worker program the new program was re-branded as Express Entry which included Skilled Workers, the Federal Skilled Trades program, and the In-Canada Experience Program. Canada modelled its revamped economic immigration program on New Zealand’s. There is also an Atlantic Immigration program. In addition there is a separate Live-In Caregiver program where individuals can apply for Permanent Residence after two years employment in this category. EXPRESS ENTRY The initial object of the changes was to create a list of Applicants where the Federal Government could select the best and the brightest from the list of Applicants. The Express Entry was supposed have applicants who had an approved Labour Market Impact Assessment (LMIA) and a valid job offer from an approved Canadian Employer. Under the Comprehensive Ranking System (CRS) candidates were award 600 points for having an approved job offer. Applicants would have achieved a point score of around 1,000 with the 600 points for having a valid offer of employment under the CRS. The provinces in Canada were also allowed to select Applicants according to their economic needs and these applicants that were selected through the respective provincial nominee programs by a province were awarded 600 points to be added to their score. Ontario also has a program where graduates from an Ontario University with a Master’s or who were in a PhD. program would be approved and awarded 600 points which virtually assured that they would be approved and provided with an invitation to apply. There is a quota that governs this graduate program. LABOUR MARKET IMPACT ASSESSMENTS Things did not go according to plan with Federal Express Entry. Very few Applicants were able to attai...
      08-14-2018, 12:50 PM
    • Article: USCIS Finalizes Unlawful Presence Policy Putting F, J and M Nonimmigrants In Great Jeopardy By Cyrus D. Mehta
      ImmigrationDaily
      USCIS Finalizes Unlawful Presence Policy Putting F, J and M Nonimmigrants In Great Jeopardy by Cyrus D. Mehta The USCIS finalized its unlawful presence policy for F, J and M nonimmigrants on August 9, 2018. The final policy makes no significant changes from the draft policy of May 10, 2018. My earlier blog noted the flaws in the draft policy, which persist in the final policy. The final policy incorrectly breaks down the distinction between violating status and being unlawfully present in the US. As of August 9, 2018, F, J and M nonimmigrants who have failed to maintain nonimmigrant status will start accruing unlawful presence. Individuals who have accrued more than 180 days of unlawful presence during a single stay, and then depart, may be subject to 3-year or 10-year bars to admission, depending on how much unlawful presence they accrued before they departed the United States. See INA § 212(a)(9)(B)(i)(I) & (II) . Individuals who have accrued a total period of more than one year of unlawful presence, whether in a single stay or during multiple stays in the United States, and who then reenter or attempt to reenter the United States without being admitted or paroled, are permanently inadmissible. See INA § 212(a)(9)(C)(i)(1). Prior to August 9, 2018, foreign students (F nonimmigrants) and exchange visitors (J nonimmigrants) who were admitted for, or present in the United States in, Duration of Status started accruing unlawful presence on the day after USCIS formally found a nonimmigrant status violation while adjudicating a request for another immigrant benefit or on the day after an immigration judge ordered the applicant excluded, deported, or removed (whether or not the decision was appealed), whichever came first. F and J nonimmigrants, and foreign vocational students (M nonimmigrants), who were admitted until a specific date certain accrued unlawful presence on the day after their Form I-94 expired, on the day after USCIS formally found a nonimmigrant status violation while adjudicating a request for another immigration benefit, or on the day after an immigration judge ordered the applicant excluded, deported, or removed (whether or not the decision was appealed), whichever came first. This will no longer be the case. Under the new policy effective August 9, 2018, any status violation will start the accrual of unlawful presence. The nonimmigrant will not be provided with any formal notice of a status violation, and any violation from the past that has been discovered would have already started the accrual of unlawful presence. According to the pol...
      08-14-2018, 10:51 AM
    Working...
    X