The Legal Intelligencer reported earlier this week on how the EB5 Regional Center visa is, in the words of distinguished business immigration attorney Ronald Klasko, "the hottest thing going on right now in immigration". Yet again I find myself nodding in agreement with Ron (only this time it isn't at one of his entertaining and enlightening business immigration CLE seminars conducted with the brilliant Tammy Fox-Isicoff.)
Hot indeed. As of this moment, 79 EB5 Regional Centers have been approved by the USCIS, and they come in all shapes, sizes, and structures. Having been introduced to this "new generation" of Regional Centers last year by Roger Bernstein, my re-immersion was somewhat cushioned in that Roger works only with the best amongst them. To see a broader example of what's out there, I've spent a great deal of time in the past few weeks surfing and snooping the smorgasbord of RC offerings. The impression I've long held is confirmed: there are many viable programs, some absolutely zany ones, and a minority of truly impressive ones. So how can a potential investor separate the wheat from the chaff?
That is probably the biggest problem these days…with USCIS doubling the number of EB5 Regional Centers in 2009, and with each Regional Center having its own complex structure, financial/job-creation methodologies, econometric models, and myriad other details, it takes many, many hours to render the "thumbs up" or "thumbs down", at least from the perspective of an immigration attorney taking a serious look at an RC on behalf of a client. For a financial adviser, I presume the task would be even more time-consuming.
Between the intricacies which must be disseminated, the sheer number of EB5 Regional Centers, and the need for immigration attorneys to constantly distance themselves from anything which even smacks of "investment advice", the responsibility for thoughtful evaluation lies in the least qualified hands: the prospective investor. And as far as I can see, they aren't often willing to pay to do their homework.
Take Michael Gibson's service, USAdvisors.org. Michael presented at Roger's seminar in Caracas in October, and it's a service which makes a lot of sense. Basically, a prospective investor who's narrowed down his or her choices to 2-5 EB5 Regional Centers hires Michael to conduct an objective comparative analysis of the various components of their possible choices, allowing a clear comparison of everything from the specific terms of escrow to the critical question of exit strategy to you-name-it. As he did his presentation, I sat there thinking "what a GREAT idea!" and that any investor would be nuts NOT to retain the service. But as great as it is, it is a massively complex undertaking if it is to be done right…and while his fees are eminently reasonable (especially for someone thinking about plunking down a half million dollars), not everyone hires him. In fact, from anecdotal evidence, I would guess that the vast majority of folks who commit to an EB5 Regional Center haven't done any form of comparative analysis…they simply commit to the program marketed to them. Bottom line: most EB5 Investors are taking whatever is being directly marketed to them and not making any meaningful comparison with other options. Suddenly, who is doing the marketing becomes perhaps as important as the Regional Center choice.
Given that I've gone from advising EB5 Investors to promoting EB5 Regional Centers, the stakes are particularly clear to me. Because unlike a conventional PR firm branding a product or service, I need to be very careful in selecting the EB5 Regional Center or Centers upon which I am willing to pin my name, reputation and A/V rating. No matter how much I divorce myself from the liabilities associated with representing an investor's EB5 visa filing, I cannot fathom what it would feel like to watch a Regional Center I've promoted tank along with their investors' funds and visas. What a nightmare.
The truth is that even the top lawyers in EB5 visas like Ron or Roger (or Karen Caco in Naples, who has visited more EB5 RCs than anyone I know, or a handful of others) only ever get to fully understand but a few of the centers out there. There are, to be sure, new jewels to be discovered in the new approved EB5 Regional Centers, and you can count on more than a few duds. Unfortunately, for prospective investors, the complexity of the structures make a comprehensive side by side analysis of ALL EB5 Regional Centers a financial impossibility…it costs too much and its a bill to steep for anyone to foot.
So what's a prospective EB5 Regional Center Investor to do? Read a lot, for starters. Take a good look at services like Michael's, which let you compare apples with apples. Finally, look for the best and the brightest immigration attorneys. Chances are that whether you are talking about an immigration attorney, an EB5 marketing entity, or, as in my case, an immigration attorney- turned – EB5 Regional Center publicist, like turns to like. Find the good lawyers and you'll find the good EB5 Regional Centers; find the good Regional Centers and you'll find the good lawyers.
And steer wide and clear from the rest.
Have a great weekend!
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