After several years of exposure, a desire has grown among Chinese people to immigrate to the United States through EB-5 program investments, prompting the development of the entire program to unprecedented heights. Faced with increased demand, participants are satisfied, and the importance of immigration agencies has become clearer than ever before. At the forefront of investor immigration services, how exactly do consultants deliver solutions? In this issue, we are honored to have the chance to interview Mr. Wang, CEO of AucanLink, and Ms. Yang, General Manager at Can-Austra Information Consulting (CAIC), and to share both the factors that they take into account when selecting projects and their experiences in the industry.
Mr. Wang, CEO of AucanLink with attorney Robert Gaffney.
Hello, Mr. Wang. Thank you for participating in this interview! Would you mind first giving us a rough idea of what your company does?
The AucanLink headquarters is located in Beijing, but we also have branches throughout Shandong Province such as Jinan, Qingdao, Yantai and Weifang. Our group currently employs over 200 personnel, and our current business is predominantly in U.S. EB-5 investment immigration. EB-5 accounts for about 50% of our business, although we also provide European investment immigration services.
We began to work in the EB-5 industry in 2007. As of now, we have more than seven years of experience, and our initial EB-5 project was a collaboration with Marriott in Seattle. Since then, we have been working with more and more project types in increasingly diverse industries and areas. Apart from the popular hotel, we have also worked with special projects like nursing homes and the wireless network construction for the New York City subway system.
How did you personally get involved in the EB-5 industry? When did you enter the industry?
Actually, I first heard about EB-5 projects back in 1999 from colleagues in Taiwan. By around 2004, we had access to some reference documents on the Philadelphia project, and only after we started going over them did we gain a formal understanding on how EB-5 operates. In 2007, we started accepting clients that wanted to emigrate through the EB-5 program. Since then, we’ve had more and more collaboration opportunities for this project. I personally spent about a year in the United States to go around visiting projects. Sometimes, I’d visit 20-30 projects in a single month, and I also met with representatives from regional centers and projects. At the same time, I also met with a lot of lawyers to discuss the risks of individual projects and ask them to assist in the process of consultation with the project party. Within that year, I had visited nearly 100 regional centers, and in addition to a careful analysis, I was always equipped with the professional advice of lawyers for each and every visit. I also met several well-known economists who helped us gain a more comprehensive understanding of project advantages.
What factors do you consider when selecting cooperation projects? What is your due diligence process?
When I pick out a project, the first factor that I consider is how well it can guarantee the green card and repayment. In order to enhance the degree of detail and completeness that goes into the due diligence process, we launched our industry-leading U.S. EB-5 Program Immigrant Investor Selection Criteria Toolkit. Not only do we publish this for our clientele, but we also send it out to the industry to share and build communication. The key to the Toolkit is the security guarantee for the green card and repayment, but it also covers a total of 117 investigation entries and a list of selection criteria for employment calculations, how to judge and forecast commercial potential, and how to perform a credit investigation. At the time, we went over everything with a lawyer and regional center executives. You could say that it’s the distillation of collective wisdom. Even now, whenever our team goes overseas for a project visit, we still do a screening based on this premium selection criteria and take every possible detail into consideration.
How do you match investors with regional centers? What are some of the qualities of a regional center that attract market interest?
In a single year, we will meet with roughly 200-300 investors, and most of these investors are distributed according to project characteristics. We will sign an agreement with the project and develop promotional plans. Then, we’ll promote the project to investors, and guide investors based on their individual preferences. Our input is still very important for investors, and we’ll usually push a single project for a certain period of time, and if we are promoting two or three projects at the same time, we’ll go the extra mile and analyze them for investors so that they can make a decision based on their preferences.
For us and our clientele, the business philosophy of a regional center is very important. As for the regional centers that I approve of, first, they have a vision, which means that they can consistently provide high-quality projects for the long-term. Second, they have professional capabilities, which means they can’t serve as a developer, lawyer or investment bank all at once; the lawyers that we employ must be professional immigration lawyers that are neutral and objective, and that can give full disclosure of their interests and priority to the interests of investors. Third, is a record of their operating performance, so we can see if they have had successful experiences, and whether or not their members have a grasp on legal and investment knowledge and expertise. All of these factors will determine the extent to which investors can place their trust in regional centers.
Do you have any suggestions to developers and regional centers that want to work with Chinese investors?
As for establishing projects, we feel that developers and regional centers must fully consider the interests of investors rather than blindly push projects through. Over the last few years, the EB-5 industry as a whole has grown rapidly. Investors have also accumulated a degree of awareness and have more projects to choose from, so if developers and regional centers cannot keep up in terms of safety guarantees, all of their efforts to promote to China will unfortunately be in vain. Also, they should be able to fully disclose all information on PPM-related projects to avoid future disputes. Also, during the investment process, developers and regional centers should strengthen communication with clientele, such as promptly providing them with information on the progress of the project and so on. In this way, they can gain a good reputation among investors which will then help promote projects in the future. As for clientele that have already obtained I-526 approval, they should do a good job of disclosing specifics on the progress of project operations so that clientele can rest assured and also give the project a good reputation.
There are going to be cultural barriers between the regional centers, developers and clientele, but I believe that this isn’t such a big deal after all, because to investors, the quality of the project is what really matters. However, the national disparities between China and the United States and different investment philosophies and ways of thinking will sometimes cause investors to miscalculate project risks. To make up for this, regional centers and developers need to better understand the culture and social norms of China to express project advantages in a way that Chinese people can understand.
What kind of changes would you like to see made to the EB-5 program in the future?
I hope that we can all combine our efforts to realize the healthy development of the EB-5 industry. Policies could also be more consistent. If the policies change too much, it will hurt investors and promoters and greatly add to the costs and efforts of intermediaries. Apart from the issue of the process quota, I also hope that market transparency and risk predictability can improve in the future through standardization.
Do you have any recommendations for article topics for our next issue? What kind of content would you like to see?
You can provide in-depth research into the impact of EB-5 program scheduling on immigration agencies. I personally think that this kind of research is extremely important because the scheduling may disrupt the plans of our clientele and impact customer awareness of EB-5 and the overall age structure of the application. Ultimately, it will also change the overall number of customers. Also, the wait times may bring big changes to the operations and profits of participating companies. I believe that everyone will be really interested in these topics.
Ms. Yang, General Manager at Can-Austra Information Consulting (CAIC)
Hello, Ms. Yang. Thank you for taking the time to participate in this interview. We hope to take this valuable opportunity to gain a better understanding of what goes on at an immigration consultancy. Would you mind telling us a little bit about your company’s business?
Our company was founded in Dalian in 2006. As for our directly operated agencies, right now, apart from our headquarters in Dalian, we’ve also opened up two branch offices in Shenyang and Liaoyang. Initially, our business focused on immigration services for Canada and Australia, so we chose the name Can-Austra Information Consulting (CAIC). In 2008, we started to work with America’s EB-5, and even though we already had a lot of people on the project side who wanted to work with us, we were still very cautious, and it took us nearly two years to gain a firm understanding of this project. So, we really started doing this kind of business in 2009. Right now, EB-5 accounts for over 50% of our business.
Please briefly describe your own professional background. How did you get involved with the EB-5 industry? When did you enter the industry?
My major in college was accounting, and I started working in the immigration industry right after I graduated. You could say that all the work I’ve ever done has had something to do with immigration. I’ve been working in this industry for over a decade. At first, I worked with other American projects like EW3 and L1. Since then, I’ve been in touch with a lot of American lawyers, and I gradually started to learn about the EB-5 industry.
What factors do you consider when selecting cooperation projects? What is your due diligence process?
My first consideration is the purpose of the EB-5 project party, or rather their true nature. I also want to know about their industry experience. Based on my standards, all of the project parties I choose have at least 10 years of experience in the industry and most continue to play a role in their respective fields because they have a level of professionalism and credibility that I can trust. Again, I will carefully consider the characteristics of each project. For example, if I am looking at a real estate project, I’ll consider the land value and location and also the capital structure and whether or not the business plan shows legal expertise. Our company has a team for project site visits, and team members will typically spend six months out of the year in the United States. I’ll also join in. I don’t simply take a look at the site, but I’ll also try to get a good understanding of the state of the local economy and study the suitability of the project for the local area. During the assessment, I’ll also ask for the advice of American industry insiders, such as hiring auditors from the property sector to come and assess the value of the project, and I’ll also have a lawyer review the business reporting. I always have local lawyers prepare the business reports.
How do you match investors with regional centers? What are some of the qualities of a regional center that attract market interest?
Apart from the nature of a project, I mainly pair investors based on the type of capital structure. For me, capital structures generally fall into the three categories of equity, equity and loans, and simple loans. If it’s an equity structure, I will focus on the business’ potential for future growth. If it’s a loan structure, I will stress that they guarantee supportability. Among the three categories, I will select one representative reference for investors, because every client has their own unique level of risk that they’re willing and able to take on. Some clientele think that the project is great, and they feel that the market has a promising future, so they want to invest and will opt for an equity structure. Others aren’t interested in the project itself and only want to bring their family to America; in the future, they don’t want to be involved in business, so we will recommend that they go with a loan structure. If this is the case, project profitability isn’t their concern; the investor only cares about a guaranteed repayment.
There are cultural barriers between developers and investors. I think that this mainly comes from a different way of thinking. I recommend that developers try to better understand the investment psychology of Chinese clientele and also realize that their own project can’t meet the needs of every kind of client. Developers must be well aware of what their purpose is; if they simply want to complete their project with funds through EB-5, they should adopt a loan structure and then actively alleviate investor concerns about whether or not they’ll get their money back. If the developer is optimistic about the client’s background and wants to use these customer resources in the hopes that they can attract partners for other business ventures in the future, the developer should use an equity structure. Lastly, coordinated services are also very important and they must be done perfectly. Clients must have follow-up services after they invest. This includes services for clientele after they arrive in the United States, as well as a transparency of information throughout the course of operations. All of this needs to be readily available so that every phase can go as smoothly as possible.
What kind of changes would you like to see made to the EB-5 program in the future?
The change that I look forward to, obviously, is greater visa availability. I also hope that developers can work together to promote projects. Right now the visa limits are too low, and waiting periods will occur sooner or later. When that happens, it will be difficult for this industry to achieve industrial development because the wait times will be too long.
Do you have any recommendations for article topics for our next issue? What kind of content would you like to see?
From the perspective of a consultant, I would like to see more discussions on policy. For example, you could provide an in-depth discussion on policy meetings and immigration policy trends. Investors might want to see some different stories, such as stories of what successful immigrant investors do in the United States today. You could discuss the topic of life in America and provide them with some guidance.
Translated from the original Chinese article.
EB5Investors.com Staff
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