Thread: Rich Chinese Race to Apply for a U.S. Golden Visa

Rich Chinese Race to Apply for a U.S. Golden Visa

Bloomberg NewsMarch 26, 2017, 2:03 PM PDT

• Concern the U.S. EB-5 minimum may rise sparks rush in Beijing
• Some agents advise clients to use illegal means to move money

As members of Congress in Washington debate raising the minimum required to obtain a U.S. immigrant investor visa from $500,000 to $1.35 million, concern about the hike has set off a scramble among wealthy would-be participants in China.



Jared Kushner.
Photographer: Andrew Harrer/Bloomberg

“Some clients are demanding that we make sure their applications are submitted before April 28," the date the program expires unless extended or amended by Congress, said Judy Gao, director of the U.S. program at Can-Reach (Pacific), a Beijing-based agency that facilitates so-called EB-5 Immigrant Investor visas. "We’re working overtime to do that."

China’s wealthy, using not-always-legal means to skirt capital controls to get their money out and at the same time gain residency in the U.S., are continuing to dwarf all others as the largest participants in the EB-5 program, despite heightened measures by the Chinese government.

The initiative channels money to high-profile U.S. real estate projects from New York to Miami to California -- including those by the family of Jared Kushner, President Donald Trump’s son-in-law and senior adviser. A current plan by the Kushner family to refinance and reconstruct its New York office building at 666 Fifth Avenue is seeking $850 million in EB-5 funding, as well as cash from Anbang Insurance Group and other investors, according to terms of the proposal reported by Bloomberg News. A spokesman for Kushner Cos. declined to comment.

200,000 Jobs

At stake if the EB-5 is curtailed is a program estimated to have played a role in creating at least 200,000 U.S. jobs and drawing as much as $14 billion from Chinese investors alone, based on data provided by Rosen Consulting Group and the Asia Society. Past projects taking advantage of EB-5 include New York’s Hudson Yards, Hunter’s Point Shipyard in San Francisco, and a Trump-branded tower in Jersey City.

New projects recently doing the rounds in China’s chat rooms, web forums and hotel-ballroom investor seminars include a 5-star hotel complex in Palm Springs, California, and what’s touted as "the world’s tallest residential building," on New York’s 57th Street, known as Billionaires’ Row.

Because Chinese individuals are limited to exchanging $50,000 worth of yuan a year, a 10th of what the EB-5 program requires, some agents are advising clients who don’t already have assets offshore to use a means nicknamed "smurfing" to move their money.

"Our suggestion to the client is to open three to four personal accounts in the U.S. or line up three to four friends’ accounts, so they can split the money and wire it to different personal accounts without being put on a blacklist by the Chinese authorities," said a Shanghai-based real estate agent who gave the surname Dong. "It may require a trip to the States to do so to facilitate the process."

Chinese Dominate the EB-5 Investor Visa Program



While the government in Beijing spent much of 2016 working to stop its citizens sending money abroad in order to stabilize its declining currency and foreign reserves, Chinese investors’ use of EB-5 continued anyway, totaling $3.8 billion in the fiscal year that ended Sept. 30, according to data from the U.S. State Department.
EB-5 started decades ago as a way to create jobs in needy U.S. neighborhoods by attracting foreign investment. But it has run into political opposition amid charges the program is benefiting billionaire developers and being dominated by wealthy Chinese.

"EB-5 has been a key program for capital flight that has been abused by Americans and Chinese people seeking to game the system," said Andrew Collier, an independent analyst in Hong Kong and former president of Bank of China International USA.

While there’s no suggestion of wrongdoing by developers that receive funding from EB-5, a series of Securities and Exchange Commission cases against EB-5-linked immigrant investor centers led the U.S. Citizenship and Immigration Services to announce last week that they would audit the centers amid concern about fraud.

Dwarfing Others

Chinese investors, several thousand a year, have made up as much as 85 percent of the annual EB-5 investor total, according to U.S. data provided by Rosen Consulting and the Asia Society. In 2015, China overtook Canada as the biggest foreign buyer of U.S. homes.



666 Fifth Avenue in Manhattan.
Photographer: Eric Baradat/AFP via Getty Images

Investment in an EB-5 project in New York, a hotel near Central Park, allowed Shanghai resident Kevin Tai to move to the U.S. this month. He applied with his family for the investor visa at the end of 2013. Transferring more than $50,000 abroad every year was also prohibited then, so to pony up the cash, Tai used his Shanghai home as collateral to secure a $500,000 loan from Hang Seng Bank in Hong Kong, a faster route to securing cash than trying to get yuan over the border in batches. That route is now closed as well.
"I don’t recall what return rate they promoted, because that doesn’t matter," he said just before his departure. "For most EB-5 applicants like us, the purpose is to get a permanent Green Card."

Palm Springs

The project in Palm Springs being promoted via messaging app WeChat by Dong’s firm seeks Chinese EB-5 investors for a $155 million hotel. It offers an unusually high expected annual return of 12 percent. By fronting a minimum of $500,000 for the 26-villa development, prospective investors become eligible to apply for a Green Card, the promotion says.

The majority of EB-5 investments offer very low returns in the range of 0.25 percent to 0.5 percent, said Can-Reach’s Gao.

The Central Park Tower project, now under construction by the New York-based luxury condo builder Extell Development Co., will reach 1,550 feet (472 meters) and house a Nordstrom department store as well as "ultra-luxury" residences, according to the architect’s website. A previous downtown New York condo project by Extell, One Manhattan Square, also received funds from EB-5 and initially targeted Asian buyers.

The latest Extell tower was pitched last year to packed rooms of investors in four Chinese cities: Shanghai, Beijing, Shenzhen and Nanjing.

Packed Rooms

About 900 firms in China are registered to handle emigration, and most of them offer EB-5 services.

To be sure, the overall volume of money leaving China through the EB-5 channel is small -- just half a percent of the $728 billion estimated by Standard Chartered Plc to have flowed out in 2016.

While capital outflows have fallen sharply in recent months as regulators increase scrutiny and the yuan holds steady, analysts say there’s pent up pressure to move money out of China.

That’s why the State Administration of Foreign Exchange, the currency regulator, has been closing loopholes that allow money to be illegally channeled overseas by seeking extra disclosure.

Outflows moderated in February as foreign exchange reserves rose, reversing a seven-month losing streak. Restrictions include limits on overseas investments and acquisitions, seeking more details from citizens looking to use their $50,000 quota and limits on purchases of investment-linked insurance products in Hong Kong.

Another Rush

A slew of external risks could trigger another rush to get money out. If the Federal Reserve lifts interest rates quicker than anticipated, it could drive up the dollar, prompting outflows.

"Demand is strong to get money out," said Pauline Loong, managing director at research firm Asia-Analytica Pte. in Hong Kong.

The problem, though, will likely remain how to bypass authorities seeking to rigidly enforce currency rules, said Dong, the Shanghai agent.

"The biggest obstacle now is how to get $500,000 out," he said.

And especially so if the U.S. Congress acts next month to more than double the minimum EB-5 investment.

https://www.bloomberg.com/news/artic...h-end-projects

I don't understand why we have this program to begin with. I don't think we need any more people trying to get their money out of China to come live in the US. How is that good business or good relations with China? Isn't that using some form of "money laundering" stealing capital and money from China? The rich Chinese need to invest in China and improve their own country seems to me. China still has an enormous amount of grotesque poverty to solve.

The Chinese and the Russians are doing the same things.

They are removing illegally made money from their country to the U.S.

and/or trying to illegally remove legally made money from their country to the U.S.

Either way the money is illegal when it is brought into the U.S.

Kushners Set to Get $400 Million From Chinese Firm on NYC Tower

It's not just the Russians and Chinese.
Check this out to see many others involved.

Rich foreigners use shell companies to buy up L.A. properties

A globalists dream - Americans don't own America.

Originally Posted by artist

A globalists dream - Americans don't own America.

That is sad and on a daily basis, I begin to think there is no hope.

Where are all those wonderful 'conservative Republicans' we put our faith in?

Where are all those patriots we believed our lawmakers to be?

You know the irony of this - we will be supporting the illegals, refugees and immigrants, they use in their companies.

We are already doing it for one Brazilian company. I'm sure there are a lot more.

What's sad perhaps saddest of all is that while Americans are waking up to the reality of illegal immigration and the grand fallacy of free trade treason, as evidenced by the election of Donald Trump our 45th President, they don't yet understand we're broke. And while the majority in 30 plus states understand this to some degree, the population as a whole still doesn't understand it given Hillary won the popular vote.

Americans just don't fully understand how broke we are or how dire the situation is. It's precipice, it's critical mass, it's a crisis of unprecedented proportion. Trump understands it. He's watched it happen and has understood what was going on since before 1987 when he started speaking out publicly about it. That's why he is our only hope to fix it before it's beyond repair.

300 billionaires are also immigrants