Announcement

Collapse
No announcement yet.

Article: Issues for Chinese EB-5 Investors in the Year of the Rooster By Bernard Wolfsdorf, Esq. and Joseph Barnett, Esq.

Collapse
X
Collapse

  • Article: Issues for Chinese EB-5 Investors in the Year of the Rooster By Bernard Wolfsdorf, Esq. and Joseph Barnett, Esq.

    Issues for Chinese EB-5 Investors in the Year of the Rooster

    by


    2017 will be the Year of the Fire Rooster. Speculation is that the Year of the Fire Rooster is going to bring fresh challenges requiring quick wit and practical solutions! This would likely be an accurate prediction as there are many challenges appearing as we start the New Year.

    The start of a new year is a time of reflection and can signify hope for a better future. It’s a time when parents discuss their goals and aspirations for their children. It’s a time for individuals to empower themselves to ensure a stable, secure, and healthy future. At Wolfsdorf Rosenthal LLP, we are proud to have helped hundreds of Chinese immigrant families with EB-5 visa applications in 2016. Our biggest concern is the ever-increasing waiting line for Mainland Chinese born investors. While presently just over 3 years, the line is constantly getting longer, and will soon go to 4 years, 5 years and beyond, unless congress takes steps to resolve this issue by adding more numbers.

    Here are five important matters that current and potential Chinese EB-5 immigrant investors should be paying attention to in the beginning of 2017.

    1. New Currency Control Rules by the Chinese Government. Amid weak domestic growth and an uncertain economic outlook, the Chinese State Administration of Foreign Exchange recently indicated that it wanted to close loopholes to restrict the outflow of capital. Starting January 1, 2017, Chinese individuals desiring to send capital overseas will be required to disclose the purpose of the money transfer, with penalties to be imposed on those for not making an honest statement. For example, Chinese citizens must now pledge that money won’t be used for overseas purchases of property, securities, life insurance, or for immigration purposes; these restrictions are not necessarily new, but the requirement to disclose it to the Chinese government is. Additionally, Chinese citizens will be required to confirm that they are not lending or borrowing funds to other Chinese citizens to evade currency restrictions. This is particularly troublesome for potential EB-5 investors who may have been able to use the “friends and family” approach to transfer funds out of China in the past. Further, starting July 1, 2017, Chinese citizens will only be able to transfer up to $7,500 per day out of the country, as opposed to the current $50,000 restriction per year. It is rumored that there will be strict enforcement of these provisions to slow the recent surge in capital fleeing China. While Wolfsdorf Rosenthal LLP does not counsel clients on currency exchange procedures, it is recommended that all potential investors strictly comply with all local currency control regulations when making an EB-5 investment. China’s new, strict controls on overseas investment may make it more difficult to comply.

    2. EB-5 Regional Center Sunset and New EB-5 Regulations from USCIS Creates Sense of Urgency. Right now, the EB-5 Regional Center program is set to expire on April 28, 2017, and Congress must act to extend it under current rules, or modify and reform it. Additionally, USCIS has prepared new EB-5 regulations which may be published before President Obama leaves office on January 20, 2017. The regulations include increases to the required EB-5 investment amounts. If published, the regulations will almost certainly become effective within 30-60 days, potentially by February 19, 2017. There may be a grace period to apply before the new rules are applied, but it will not last long, and we have seen a sense of urgency from EB-5 investors to submit Form I-526 petitions before the new rules become effective. Thus, there are 3 separate deadlines emerging that potential Chinese EB-5 investors should be aware of:

    a. February 19, 2017 – Potential Effective Date of USCIS Regulations

    b. April 28, 2017 – Sunset of EB-5 Regional Center Program

    c. July 1, 2017 – Strict Enforcement of Chinese Currency Outflow Regulations

    3. Chinese Educational and Environmental Circumstances Creating Demand for U.S. Green Cards. Compounding this urgency is the fact that the Shanghai Municipal Education Commission announced clear guidelines requiring private elementary schools to use only Chinese curriculum, such as instruction on Marxism and patriotism required in public schools, to “uphold national sovereignty and ideology.” Additionally, China has recently struggled with thick smog and dangerously unhealthy air quality levels that have shut down schools, businesses, flights, and highways. Both of these events have created considerable anxiety among Chinese parents, which will likely continue the demand for EB-5 green cards in general, including the earlier submission of EB-5 applications by parents with younger children.

    4. EB-5 Statistics. USCIS received over 5,500 Form I-526 petitions from July 1, 2016 to September 30, 2016, and over 14,000 Form I-526 petitions in the entire Fiscal Year 2016. This is only a few hundred less than what was submitted in Fiscal Year 2015, despite the uncertainty surrounding the EB-5 Regional Center program. While the number of I-526 filings that occurred from January 2016 to June 2016 was low, we expect a high demand for filing EB-5 applications because of the circumstances mentioned above. The number of pending I-526 and I-829 applications continues to grow; we are hopefully that USCIS’ recent I-526 filing fee increase, from $1,500 to $3,675 effective December 23, 2016, will provide the agency with sufficient resources to reduce the length of EB-5 adjudications.

    5. Use of Bitcoin for EB-5 Investment. As the new Chinese currency restrictions loom, there has been more talk about using Bitcoin as manner of transferring funds out of China to an EB-5 investment project. Bitcoin is a type of digital currency, created and held electronically, that operates independently of a central bank. Because Bitcoins are not tied to any country, international transfers are generally easy and cheap and subject to less regulation. The system uses innovative encryption to track movement of each Bitcoin and ensures that the buyers and sellers remain anonymous by only including the “bitcoin address” of the transferee. Bitcoin operates as a 21st century “hawala” system that USCIS has previously recognized to be compliant with EB-5 law. These financial systems work as follows: A broker receives investment funds in an EB-5 investor’s native currency, exchanges the value of those funds in another country (here, U.S. dollars) on behalf of the EB-5 investor, and then transfers the investment funds into an EB-5 project’s account.

    Right now, because of the devaluation and lack of credibility of Chinese currency, there is normally a fee equal to approximately 8% of the value of the Bitcoin transferred out of China, and EB-5 investors are not prepared to pay a premium because there are preferable options currently available. With China looking to strictly enforce its new currency outflow restrictions, and with a majority of the Bitcoin market based in China, we may see a demand for Bitcoin if it becomes the only option. However, with changing economic conditions, it is unclear whether the Chinese government will allow Bitcoin transfers to continue as is, and may seek to become a more active Bitcoin regulator.

    As long as transfers are made in compliance with local laws and regulations, there is no reason why an EB-5 investor should not be allowed to use Bitcoin as the method of transferring capital. Although USCIS has yet to opine on this issue and despite the fact that Bitcoins are not favored by the U.S. federal government, here are the arguments we would use to demonstrate an EB-5 investor’s compliance with EB-5 law and regulations:

    a. 8 C.F.R. § 204.(j)(2) requires an EB-5 investor to provide evidence that he/she “has invested or is actively in the process of investing lawfully obtained capital in a new commercial enterprise in the United States . . . .” (emphasis added).

    b. 8 C.F.R. § 204.6(e) defines the term “capital” to include “cash, equipment, inventory, other tangible property, cash equivalents, and indebtedness secured by assets owned by the alien entrepreneur …” (emphasis added).

    c. The Internal Revenue Service within the U.S. Department of the Treasury has produced guidelines treats virtual currency like Bitcoin as “property.”

    d. A U.S. District Court in Texas has ruled that Bitcoin is a currency or form of money and that the investment of Bitcoins constitutes an investment of money.

    e. As long as Bitcoin transfers are made in compliance with all local laws and regulations, this “capital” should be deemed “lawfully obtained.”

    f. Because the Bitcoin system’s software encryption easily identifies each transaction and keeps a public record of each Bitcoin’s movement, it is sophisticated to assist USCIS in determining the “path of funds” of each EB-5 investment.

    In conclusion, despite the ever-increasing visa waiting for Mainland Chinese EB-5 investors, many Chinese citizens are starting to apply earlier to get a spot in line at the current investment level.

    Wolfsdorf Rosenthal LLP is a full-service immigration law firm with offices in Los Angeles and New York known worldwide for its unmatched excellence in providing top-quality U.S. immigration representation.

    This post is designed to provide practical and useful information on the subject matter covered. However, it is provided with the understanding that no legal, tax, accounting, or other professional services are being rendered or provided. If legal advice or other expert assistance is required, the services of a competent professional should be sought.

    This post originally appeared on www.wolfsdorf.com. © 2017 Wolfsdorf Connect. All Rights Reserved. Reprinted with permission.


    About The Author

    Bernard Wolfsdorf, Esq. and Joseph Barnett, Esq. : Bernard Wolfsdorf is the managing partner of the top-rated law firm, Wolfsdorf Rosenthal LLP (www.wolfsdorf.com), and the past national president of the 14,000-member American Immigration Lawyers Association (AILA). Established in 1986, Wolfsdorf Rosenthal LLP is known worldwide for providing exceptional quality legal services. With 19 lawyers and offices in Los Angles and New York, the firm was recently listed as a top-tier immigration practice by Chambers & Partners with several of the firm's attorneys listed in the 2015 International Who's Who Legal. Mr. Wolfsdorf specializes in EB-5 investment immigration in addition to the full range of global immigration matters. Joseph Barnettis licensed as an attorney in the State of Illinois and the State of Wisconsin and practices exclusively in immigration and nationality law. Robert Blanco specializes in business and employment immigration cases. He prepares both immigrant and non-immigrant petitions for skilled workers, executive managers, high net worth investors, and people of extraordinary ability in the arts, sciences, and business. Mr. Barnett's practice focuses in the area of EB-5 Immigrant Investor Program; EB-1A foreign nationals with extraordinary ability in the sciences, arts, education, business or athletics; and other business immigration matters


    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

      If you are having difficulty viewing this document please click here.

      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