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  • Article: China 2016: Thoughts Following My Latest Visit to China. By H. Ronald Klasko

    China 2016: Thoughts Following My Latest Visit to China

    by


    As is virtually always the case, things are changing in the China market. The China market of 2016 is very different than it was in 2015, which was very different than it was in 2014…you get the idea.

    In this blog, I will outline my most recent observations. I will not go into detail on any of them since many readers of this blog will be attending our seminar on September 9 in Philadelphia. We will be expanding on all of these topics during that seminar.

    1. Although there is some concern regarding the extension of the regional center program, the far bigger concern is the quota backlog. There is great interest in the possibility of recapturing unused employment-based numbers with some going to EB-5.
    1. There is justifiable concern – if not alarm – among Chinese agents regarding failed and fraudulent projects. Many agents are insisting that regional centers or developers have systems in place to ensure ongoing oversight of the flow and use of the investors’ money, of documentation of job creation, of identification of changes in the project before it is too late and of documentation available for project site visits, regional center audits and interviews of I-829 applicants.
    1. Because of the quota backlogs, there is much interest in minors as investors. Some agents would like to have minors investing as young as 14 years old. I explained the issues of regional center policies; bank policies; escrow administrator policies; and USCIS policies. I emphasized that the investment transaction cannot be voidable; if it is, the I-526 petition would likely be denied. There is great interest in the Uniform Transfers to Minors Act, which is critical to make the transaction non-voidable.
    1. Another outgrowth of the quota backlog that creates great concern on the part of agents is the issue of redeployment of the invested funds. The agents are very interested in a solution that would enable the investors to know in advance where their money will be redeployed.
    1. Partly because of the quota backlog issues creating less demand, and partly because of the uncertainties regarding the extension of the regional center program, agents are interested in smaller projects than previously. 50 to 200 investor projects are generally of more interest than 300 to 400 investor projects.
    1. The quota backlog has also created interest among agents in either alternatives to EB-5 or alternatives for investor clients to get into the U.S. during the EB-5 waiting period. We discussed the fact that the L-1/EB-1C option is not a good option for most investors, especially those who do not plan on spending most of their time in the U.S., who are not interested in managing a business and who do not speak English. There was greater interest in the E-2 visa option, which requires the investor to obtain citizenship in a country that has a bilateral investment treaty with the U.S. The 5-year E-2 visa is of interest as a method of filling the gap between the filing of the I-526 petition and the entry into the U.S. as a conditional resident. The E-2 option has the advantages of being a five-year renewable visa, allowing the investor to spend most of his or her time in the U.S. or outside of the U.S., allowing the spouse to work and allowing the child to go to school until age 21 when he or she can change to F-1 visa status. There is also the possibility of avoiding worldwide taxation.
    1. It is much more difficult to get money out of China than previously. Extra time and effort needs to be devoted to this process. This may get more difficult in the future.
    1. There is an evolution in the Chinese market. There are more projects on the market and fewer investors. As a result, projects need to have some way to distinguish themselves. Just being a good project using traditional criteria is no longer sufficient. Especially given the longer time the investors’ money will be outstanding – possibly as much as 9 or 10 years – projects providing larger returns to investors may be more in demand.
    1. Many agents are interested in front loading as much of their compensation as possible. They are willing to reduce the total amount due to them in return for front loading.
    1. The reaction among agents to the unprecedentedly lengthy USCIS processing times is not consistent. Some agents are very concerned because it makes the investors uncomfortable and wary of the program. Other agents realize that the lengthy processing times are in the best interest of many of their clients. I explained that the processing times may be getting longer, since USCIS has not yet even touched the huge volume of cases filed in September 2015. While this will likely result in even more lengthy processing times, it will also result in even more lengthy periods during which the children’s ages will be frozen, which could have a significant impact on the age of children who are presently young enough to be included in their parents’ applications. For investors who are not happy about the increased processing times, agents are becoming more comfortable with the mandamus option.

    We will have several Chinese agents presenting at our September 9 seminar. Most or all of these themes will be dealt with more expansively at that time.

    This post originally appeared on Klaskolaw.com. © 2016 Klasko Law. All Rights Reserved. Reprinted with permission.


    About The Author

    Ronald Klasko H. Ronald Klasko (Ron) is widely recognized by businesses, universities, hospitals, scholars, investors and other lawyers as one of the country’s leading immigration lawyers. A founding member of Klasko Immigration Law Partners, LLP and its Managing Partner, he has practiced immigration law exclusively over three decades. Under his leadership, the firm has been chosen every year for the last ten years by the highly regarded Chambers Global 2015 as one of the top five immigration law firms in the United States; Ron himself is recognized annually as being in Tier One of immigration lawyers by Chambers Global and U.S. News and World Report. In addition, he has been included in the highly regarded Best Lawyers In America for two decades and has also been repeatedly selected for inclusion in Lawdragon’s/Human Resource Executive’s list of The Most Powerful Employment Attorneys Guide. Who’s Who Legal in Corporate Immigration named him as the most highly regarded immigration lawyer in the world.


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

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