The number of rich Chinese applying for investor green cards in the US has increased in recent years.
Tue, Aug 10, 2010
China Daily/Asia News Network
[Photo:A US property agent draws potential Chinese customers with promises ofgreen cards at a real estate fair in Beijing in this file picture takenin late June.]
by Duan Yan
Yvonne Liu, 22, wanted to stay in the United States after heruniversity studies, and her mother, a 46-year-old wealthy Chinesebusinesswoman, figured out a way to make that happen.
Lily Zhang flew to the US to look for investment opportunities. Herplan was to move some of her international trade business from the cityof Xiamen in southern China to southern California.
She has registered a branch of her company in the US, which is a wayfor her daughter to stay in the West after her studies at theUniversity of Missouri at Columbia. (Zhang would not give their realnames because her project is still ongoing.)
"When it grows bigger, I can give this part of the business to my daughter," Zhang said.
According to statistics from the US Department of State, the numberof so-called "investor green cards" issued to non-Americans nearlytripled to 4,218 in the 2009 fiscal year. About 1,800 of thoserecipients are from the Chinese mainland. South Korea is second with903 recipients.
In comparison, just 1,443 investor visas, referred to as EB-5 visas, were issued in fiscal year 2008.
The real estate price hike and stock market boom in China hasenabled the rich to spend lots of money for their American dreams. Andmany of them, like Zhang, are doing this for their children.
Surge in Chinese applicants
After two years of planning, Zhang's company, which makes paper outof limestone, will be an operational company in the US within sixmonths.
"It will create at least 700 jobs for locals," Zhang said. WithCalifornia's unemployment rate of over 12 per cent, she found it anideal time to invest in an American dream for her daughter, and she iswilling to pay big money for it.
The US$70 million (S$95 million) investment partly comes from herpocket, as well as bank loans. Another one third of it comes from 50EB-5 investor visas that can help 50 other Chinese wealthy people whocan pay a minimum of US$500,000 for permanent residency in the US.These EB-5 quotas could help her raise US$25 million for her company.
Other people who own companies like Zhang's are trying to raisemoney from wealthy investors who want to get a green card. Regionalcentres, which refer to high-unemployment areas designated by the USCitizenship and Immigration Service (USCIS), are also eligible toreceive immigrant investor money.
The number of approved regional centres has surged. In January 2009,only 30 EB-5 regional centres existed, but as of July 2010, 100regional centres had been approved by USCIS.
The first to notice the surge of Chinese applicants for investorgreen cards was the lawyers who specialise in visa applications. At hislaw office in City of Industry, California, immigration attorney DavidFang took his first investment immigration case for a client fromTaiwan when the programme was authorised in 1992.
At that time, the investment was US$1 million. Now the minimum is US$500,000.
Ten years ago, 70 per cent of his clients were from Taiwan and the rest were from Hong Kong.
"Now, 70 per cent of them are from the Chinese mainland," Fang said.
The US life
Adjusting to life in the US does not seem to be a problem for LilyZhang and her hu*****and, who can read and converse in basic English.
"You don't need that much English for daily life," she said. And as for the business, she has hired a translator to help.
Now more than 1.1 million Chinese Americans live in California,according to the US Census Bureau's 2008 American Community Survey.
At her law office in Chinatown, New York, Yang Fuhao has seen adecline in H-1B work visa applications from Chinese, but has receivedmore inquiries about investor visas. New to the business of investmentimmigration, she is now representing three clients in that capacity."All of them are from the Chinese mainland," Yang said.
Contrary to the new boom in investment immigration for the Chinesemainlanders, many Chinese graduates of US universities faceddifficulties finding a job in the US, and many decided to go back toChina.
The number of H-1B work visas for Chinese citizens dropped from16,628 in fiscal year 2007 to 12,922 in fiscal year 2009, according tostatistics from the US Department of Homeland Security.
For Zhang, that's exactly one of the reasons that she invested inthe US for her daughter Yvonne. During the economic downturn, a greencard for her daughter will make sure that she won't face the samejob-hunting difficulties many of her classmates and friends faced.
"You just don't know what will happen to the immigration law if andwhen a new president is elected. And all the good jobs are saved for UScitizens and green card holders," Zhang said.
Less pressure
Yvonne Liu is studying economics and business management at theUniversity of Missouri at Columbia, and will graduate next summer. Sheliked her studies in the US because she has less pressure there.
"No one will keep their eyes on me or give me too much pressure. I can do whatever I want," she said.
She joined a popular music band in school with some of her friends."And I don't need to worry about my parents when they grow old becausethe social welfare system here is better. "
She doesn't have to compete with more than 9 million Chinese students in the national college entrance exam.
"The US college application process is more personalised," she said.
Liu appreciates what her parents have done for her.
"Many of my (Chinese) friends in school wanted to stay in the UnitedStates, but there are many difficulties. I'm really lucky that I don'thave the same worries because my parents are very capable."
Selling the programme
In Beijing, wealthy parents like Cao Zhenghe went to informationsessions and promotions for US investor immigration programmes, lookingfor opportunities that can help their children have a better future inthe United States.
"Are you also here for your kid?" Cao asked a middle-aged woman whosat next to him during an information session. She nodded yes. Duringtwo days of information sessions for investment immigration projects,Cao met several parents who had already sent their children to study inthe United States.
"We don't chat a lot with each other, you know, because of privacy concerns," Cao said.
For many wealthy Chinese, investing US$500,000 into a US governmentdesignated regional centre programme is one of the most convenient waysto reach their American dream, or for their kids.
Cao, 45, came to Beijing on June 10 and went to a session hosted byBeijing Worldway Immigration Service Co, to learn about a regionalcentre programme about a gold mine in Idaho. He flipped through thebrochure and jotted down notes and questions as immigration consultantsand representatives from regional centres continued to sell him on theproject.
Although he was told that his money will be safe and he can buy outhis investment after five years, Cao knows that many of these project*****ear a certain risk. He is finding it difficult to choose the rightone. "I'm getting tired of these meetings now," Cao said.
As an owner of an iron mine in Hebei province, Cao understands themining business more than most of the participants. But he doesn'treally understand how the business is running in the United States, anddoesn't have relatives in the US except for his 21-year-old son who iscurrently studying in California.
"The first generation of immigrants is not going to be easy. Butwhen he has his own family, life will be better for his children," Caosaid.
He is determined to support his son's decision to get a green card.
"I don't know what he is studying there; he is quite independent and finished the college application all by himself," Cao said.
Immigration Lawyer David Fang warns that most centres haven't beenoperating long enough to complete their projects or establish aninvestment track record. He fears that many projects marketed toinvestors "won't be successful in terms of job creation, and investorswill be unable to get their money back, or even lose their green card".
Risky dreams
Even if they can afford it, not everyone is so sure that they can realise their American dream.
The US$500,000 investment is only enough to pay for 10 workers' salaries for one year.
"I need to keep their jobs for at least two years before my familycan get the green card," said Liu Jie, a businesswoman in Beijing whosebiggest concern about choosing an EB-5 regional centre programme iswhether she can get her permanent green card.
To succeed, her investment needs to secure 10 jobs for locals in aregion with a high unemployment rate for at least two years before herconditional green card can become a permanent green card. And thebusiness has to be profitable so that she can get her money back afterfive years.
In the promotions and brochures, immigration consultants, lawyersand representatives from regional centres carefully paint a rosypicture to their clients, most of whom are unfamiliar with USinvestment. They avoid talking about any risk or any negatives.
"Regional centres tend to oversimplify the process of investmentimmigration," Fang said. "And immigration agencies in the Chinesemainland are also new to the investment immigration themselves."
Some consultants at the sessions like to say that the risk isminimal because the programme is backed by the US government, but Fangwarns that this statement is an exaggeration. The US government doesnot guarantee the safety of the investment, he said.
Those wishing to join the EB-5 programme will need minimum assets ofat least 10 million yuan (S$2 million), Zhao Jiangcheng, an immigrationconsultant of Beijing Worldway Immigration Service Co., told theprospective clients who were hesitating.
"The worst-case scenario is that even if the investment fails, your life will not be affected severely," he said.
Small portion of their wealth
Most of the investors are quite wealthy and US$500,000 representsonly a small portion of their wealth. Liu Jie, for example, said shewould sell a few apartments to pay for her part of the investmentimmigration program.
Many of her friends went to study in the United States in the 1990sand stayed there after graduation. One of her friends is a researchfellow in the United States, "but I don't want to stay in the lab everyday like her," Liu said.
When the real estate prices began to drop slowly in Beijing, she decided to give up her American dream.
"I don't know what to do there," she said.
For Cao Zhenghe, who is determined to make an investment for a greencard, the American dream is a bit different. He doesn't want his son tobe an American citizen because a green card would be better for familybusiness in the future.
"What if he came back to do business in China? I can't help him get a Chinese green card if he became an American."
Cao is trying to find Chinese people who succeeded in getting theirpermanent green cards and got their investment back after five years,but so far, he has been unable to find them.
He would love a piece of America for his family and for his business, but wants to be smart about venturing into this.
"It's a big investment for the family after all," he said. "It needs to be considered carefully."
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