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EB5 INVESTORS MAGAZINE

EB5 Investors Interview with 陈建云(Jimmy Chen)

by EB5 Investors Magazine Staff

1. Do you have a license for immigration services? If so, which city/region has given you this license?

We were founded in 2001 in Guangzhou. We are one of only a few companies that have dual licenses for legally providing immigration and study abroad services. We have a "Private Immigration Intermediary Service Agency Operating Permit" (Guangdong border license number [2012] No. 026, issued by the Chinese Ministry of Public Security) and a "Qualified Study Abroad at Personal Expense Intermediary Service Agency Certificate" (GD20140006, issued by the National Ministry of Education).

2. What countries to do you help immigrants migrate to?

We’ve helped thousands of customers migrate to the United States, Canada, Portugal, Spain, Hong Kong, Italy, among others. We focus on EB-5, Canada’s Quebec Immigrant Investor Program, and Portugal’s property buyers’ migration project. We have 15 years of experience and cooperation with a lot of companies to help customers migrate. Previously, our business primarily focused on Canada immigration, but since the national Canadian program was shut down two years ago, we put part of the business focus on the European project. In 2015, Canada elected a new prime minister and minister of new immigrants to Canada, allowing the country to have vigor and vitality. Recently, the Quebec Immigrant Investor reopened. I have more than 15 years of experience in handling Quebec investment immigrants, and partnerships with a number of fund companies. As a result, we believe that we can help more people get invested and meet Quebec investment immigrant quotas.

3. What is the reason you entered into this business?

I have focused on immigration services for over 20 years now, starting as a pioneer in this industry. We are the first Chinese migration agency to work in the Canadian business immigration field as approved by the Canadian Migration Bureau, and we helped the first business immigrants from China successfully migrate to Canada in June 1993. Ever since, I have been very optimistic about the Chinese immigration market offering great business possibilities.

4. What are the major concerns typically expressed by your clients?  What are their concerns with EB-5?

Among the customers I have interacted with, over 80 percent of them consider the education of their children as their main motivation to migrate. As a result, we have built two brands within our company: Chen Cheng Immigration Consultants and Abo Overseas Education Agency. If clients desire to work and live in other countries after they complete their educational programs, we would then create special and customized immigration plans for them. For example, the success rate of the U.S. H-1B visa selection process is low. If Chinese students are not selected in the H-1B lottery, they will lose their legal status in the United States and lose the opportunity to work there. Therefore, we generally recommend that clients who are studying in the U.S. and wish to remain in the U.S. to live and work should apply for the EB-5 immigrant visa for themselves and their immediate families.

As for EB-5, the clients I have worked with are mainly concerned with three issues: The first is obtaining their green card. They are concerned whether all of the requirements have been met so their conditional green card can successfully be turned into a permanent green card after two years. Second is the security of investment funds. Clients are concerned about the viability of being repaid their investment amount of $500,000 after they have successfully obtained their permanent green card. Third, as more and more investors apply for the EB-5 visa, customers will be concerned about the recent retrogression issue; this is especially true for applicants who have children around 18 years of age.

5. Please offer something unique about your company that you feel stands out from other migration agencies

1) We are one of the few migration agencies who have migration licenses in Guangdong. Our company has the "Private Immigration Intermediary Service Agency Operating Permit" (Guangdong border license number [2012] No. 026, issued by the Chinese Ministry of Public Security) and the "Qualified Study Abroad at Personal Expense Intermediary Service Agency Certificate" (No. GD20140006, issued by the National Ministry of Education) dual immigration intermediary services qualifications. We are creating both immigration and educational plans for clients.


2) We have branch companies in Toronto and Portugal. These branches are our customer service centers, committed to providing customers with relocation services. These full-time relocation services teams include: leading lawyers, certified accountants, insurance experts, financial planning specialists, real estate brokers, and other experts for transportation and housing services. They provide customers help with overseas financing, venture capital and other professional services, as well as a number of free landing settlement services. We plan to set up another relocation services branch in the United States.

 

3) Our education branch company, Abo Overseas Education Agency, utilizes an Internet innovation platform and modern information technology to build intelligent and efficient online trading platform and other services to promote the, "Accept a student, serve a family" concept.” We provide in-depth consultation and evaluation of professional study plans: helping students to apply to schools, obtain visas and other documents via a one-stop service. This includes pioneering online education, science camp tours, read-alongs with the application, guardianship of minors, employment and immigration, foreign investment and other value-added services.


4) Our company will be the first in the Chinese migration industry to go public on the Chinese stock market (July/August of this year). Our plans for the future also include setting up branch offices in Beijing, Shanghai and Shenzhen to provide more customers with even higher quality services.

6. What are the biggest obstacles (top 3) that you see for the EB-5 program in terms of the big picture?

I think the extended wait time/retrogression is the biggest obstacle. Previously, among the top countries where people like to immigrate to (the U.S., Canada and Australia), the longest wait times were in the Canadian Immigrant Investor Program. This program had federal immigrant investor clients waiting seven years to obtain permanent resident status, and even then some clients were rejected. Not being able to wait for this long period of time is actually the reason why a number of our Canadian investor clients switched to the U.S. EB-5 program. The U.S. EB-5 program had a significantly quicker approval period at that time. But now the I-526 and I-829 approval processing times are much slower, and combine this with the visa wait times, more clients are waiting for significantly longer times. These long wait times will definitely influence the immigration considerations of customers, and may even lead the EB-5 program to become like the old Canadian program with some customers switching instead to the European property-buying immigration programs or even a passport project of a smaller country. Because of these reasons, I sincerely hope that the U.S. government will take the appropriate measures to mitigate the impact of such issues.

7.  What type of projects are you currently looking to partner with? Hotel, apartments, or energy projects?

Our company does not look for specific types of projects. For example, we recently promoted two apartment projects, but we are also promoting infrastructure programs. We find different projects from different industries to meet the individual needs of investors. Our company is looking for projects for our customers but not specifying the type of programs. On the market, there are more apartment projects currently.

We look for projects in different industries to match the requirements of different investors. One item we take under serious consideration when selecting a project is the current and projected future of a given industry’s market. If a given industry has just gone through a big downturn, it is difficult to rely on an individual business’ efforts to create a successful EB-5 project. 

8. Do you offer both regional center and direct investment projects?

We seldom choose direct investment projects. Regional center projects can generate greater job creation since they can count indirect employment, but direct investment projects can only count direct employees. Additionally, USCIS requires direct investment projects to provide the project company payroll records (i.e. W-2 and I-9 forms), while regional center projects only need to provide evidence of job creation based upon an economic analysis report. Regional center projects have no need to provide payroll records. Also, the investment and immigration risks of the direct investment immigration program are all borne by investors; the employment requirement of creating 10 new full-time jobs can be difficult to maintain for the required amount of time and the cost might prove to be too high, so customers rarely choose such projects.

9. Please list and explain the top three things you look for in a project in terms of underwriting. 

We believe the most important thing is EB-5 project marketing, contracts and agreements, and that other processes all comply with SEC and USCIS regulations as well as with relevant Chinese laws. It’s important not to mislead clients in the marketing process. We make sure to explain in our customer service contracts all relevant risks, helping clients understand the different capacities and limitations between migration companies and regional centers based upon the regulations. Migration agents are only responsible for clients and their immigration applications, and do not guarantee commitments made by a project. Clients must have a full understanding of associated risks, and as Chen Cheng immigration consultants, we educate investors about these risks. We also have our own dedicated project department that performs due diligence work and risk control. We are usually most concerned about three issues: The first is to understand the various parties involved in a project (developers, etc.) and whether their backgrounds, track records, experiences, strengths, reputations, etc. are reliable. The second is to understand how much EB-5 funds are in the project’s capital stack. We value the concept of having a low proportion of EB-5 funds in a project capital stack in order to achieve risk diversification, but it’s not absolute. We also consider whether a bank is participating in the project’s financing. We consider a project capital stack with EB-5 funds accounting for less than 40 percent with sufficient collateral to be quite safe. The third issue is the one that most concerns clients: job creation. Generally speaking, clients believe that greater job creation means a safer project. But in reality, the job creation number cannot be infinitely high. Under normal circumstances, a project with a job creation surplus greater than 30 percent would be considered secure enough.

10. When evaluating a project, where should EB-5 fit into the project’s capital stack to make the investment safer? Please comment on repayment order.

As I mentioned earlier, a project utilizing a low percentage of EB-5 funds can diversify the associated risk, but the risk will not be completely gone. We will look at whether there is a bank involved in the project in the form of a mortgage or loan. If there is a bank involved, then the bank will obviously have priority in terms of repayment. It is a given that banks and other financial lending institutions receive higher priority and more rights in a project than EB-5 investors. It’s only after banks ensure return on their own loan’s principal and interest that EB-5 investors are allowed to collect project proceeds. We pay particular attention to whether there is collateral, those who have rights to this collateral, and in what order are those rights provided.

11. Do you have a separate underwriting department that looks at your deals? How long does this process typically take? 

Yes, our company has a dedicated team of professionals in the Project Department that underwrites all projects that our company works with. They perform due diligence work and risk evaluation. Additionally, the company’s vice president and I personally visit each of our projects in the U.S. to monitor progress. Usually, our underwriting process takes approximately one month to be completed.

12. Who do you use for your immigration counsel? 

We have established relationships with a number of law firms in the U.S. who perform project due diligence work in addition to practicing immigration law.

13. Do you have the capacity to accept more projects right now?

Currently, our project pipeline is at a good capacity with three EB-5 projects in addition to over 20 other immigration products including: Quebec investment projects, Prince Edward Island investment opportunities, Portugal real estate projects, Spain housing-purchase immigration opportunities, Italian real estate immigration projects, Italian start-up enterprise projects, St. Kitts immigration opportunities, as well as Antigua and Dominica immigration opportunities. We currently market approved projects, and when we partner with more good projects, we will introduce them to our customers as well.

14. Do you feel it’s more important to have a reputable project or a reputable regional center? Or do both matter? 

I believe both points should be considered and evaluated by all investors. A new regional center is not bad in and of itself.  Practically speaking though, investors tend to focus more on the project itself.

15. What are your plans for expansion of your company?

We are planning to go public with an IPO in July/August of 2016 and will establish branches in Beijing, Shanghai and Shenzhen. Our IPO will enhance the brand recognition of our company. Customers prefer a brand and company that is publicly traded since public companies must meet standard management regulations. Going public will allow us to provide more customers with even higher quality services. We will also cooperate with the overseas study companies in 2nd and 3rd tier cities.

16. How do you handle relocation services? Do you outsource, or do you have an affiliated company working with you?

As mentioned earlier, we take relocation services seriously. Our company branches in Toronto and Portugal are in charge of these services including finance and property services. Those branches are the customer service centers, committed to servicing all customer needs as they settle in other countries. Our full-time team of relocation professionals include: top lawyers, certified public accountants, insurance experts, tax and financial planning specialists, real estate brokers, and other insurance experts. They provide customers with overseas financing, venture capital and other professional services, as well as a number of free landing settlement services. We plan to set up a relocation services office in the United States. We haven’t set up branches in other countries, but our relocation services team has a network of local service providers to assist with client’s needs in their new country. Our Project Department team members will connect customers with these relocation service agents to make sure the customers are provided professional relocation services of the highest caliber.

17. Are you a part of any exit-entry associations? Are you a part of any other immigration groups?

Yes. Since August 2014, I have served as the Executive President of the Guangdong Province Exit-Entry Association. Since January 2016, I have also served as the President of the Shenzhen Group of the Guangdong Exit-Entry Association. 

 

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