On a mission to educate EB-5 investors and advocate for positive changes to the program
By EB5 Investors Magazine Staff
Lance Lee knows he’s the exception: a University of Arizona graduate from China who got his green card in less than a year under the EB-5 program – and his investment back five years later.
Problem is, everyone he talks to wants to be the exception as well. And he has talked to a lot of Chinese investors who hope to gain U.S. permanent residency and eventual citizenship for themselves and their children.
He talked to so many such people, as a representative of an EB-5 investment adviser, that he grew frustrated that so few would have the positive experience he had.
Since Lee went through the process, it has been slowed to a crawl by a backlog of applications.
This backlog so concerned Lee that he quit his job recruiting EB-5 applicants and is pushing for solutions to ease the backlog and spread the word about how much longer a green card will take than most Chinese investors believe – 10 to 12 years.
“This industry will not benefit from the vagueness anymore. It’s on the verge of a lot of investor riots,” Lee said. “It was lack of transparency for so long.”
AN EMOTIONAL EB-5 JOURNEY
Lee came to the United States in 2008 to study at the University of Arizona. He graduated in 2010, received his Optional Practical Training visa and, in 2011, applied for his green card. Eight months later he received it. In 2016, he returned to China because, though he was born there, he had never worked there and was looking for an adventure. A week after he landed, he received an email saying his $500,000 EB-5 investment was being refunded to him.
“I think I am what the EB-5 system was intended to be,” Lee said. “At the moment, especially for the Chinese investors and the current situation, it’s impossible to repeat my story.”
That’s because in fiscal year 2015, for the first time, the U.S. Department of State imposed a two-year backlog for EB-5 investors born in mainland China because applications had grown so high that they surpassed the nation’s allocation. Chinese investors much now wait for a future year’s allocation before they can obtain a green card, but since the backlog will continue to grow, the waiting time will likewise grow longer and longer.
“This industry is like a very old, bumpy narrow road, and there were too many people racing along this road,” said Lee about the so-called retrogression.
Those who invested in 2015, and are now getting their I-526 immigrant petition approval and seeing their kids graduate from U.S. colleges, will be in a bad position when they find out how much longer they must wait, he said.
Lee is suggesting short-term fixes that would allow those applicants whose I-526 has been approved to be able to stay in the U.S. while their applications are being processed. He also urges more education of Chinese investors by an unbiased source so they understand how long the process could take.
If nothing is done, he fears, the Chinese EB-5 industry will decline as investors get fed up with the process and turn to other markets.
“We are kind of like dancing on the bomb,” Lee said. “It’s going to explode.”
He tells the story of a Chinese woman who applied in 2015 through the EB-5 program for her and her 18-year-old daughter. But as the wait for green cards drags on, the daughter is on the verge of aging out and would have to apply on her own.
“So now the mother will get a U.S. green card but not the daughter. But the purpose for doing EB-5 was for her daughter,” Lee said. “She is not the only one. She is like one of thousands.”
IMPACT OF THE RETROGRESSION
After Lee returned to China, he worked for an investment firm in Guangzhou, which specializes in investor programs for global residence and citizenship. He said he did about a hundred presentations in EB-5 events in China to sign clients and built the fastest-growing team in the company. In September 2017, he resigned.
The clients had genuine hopes for their children and were doing whatever they could to advance their success, Lee said. But he felt worse and worse doing presentations and declined to meet one-on-one with investors. They were under the impression they could get a green card in two or three years, and that’s just not true, he said. He refused to give them false information, talking instead about how he felt about the U.S. and how it changed him, making him more outspoken. He told the audiences about his college roommate, who came from a wealthy family but drove an old car and was raised to work hard.
“These things start to make me realize why Americans are so proud of their country,” Lee said. “It’s about the values the U.S. society cherishes: freedom, hard-working, independent. These values resonate more with me. This is actually something a Chinese family would love their kids to have growing up.”
But Lee realized his pitch was still influencing the audience’s decision to apply. In China, he said, people tend not to read the paperwork but to trust who gave it to them. He didn’t want that burden.
“If you sit down and you tell the Chinese investors about the reality of the backlog, 90, even 95, percent of them will walk away,” he said. That makes it hard to close many deals.
He said he’d rather spend his time and energy trying to bring about changes in the EB-5 program.
ADVOCATING FOR IMPROVEMENTS
Since it’s unlikely the quota of 10,000 EB-5 visas will be raised in the near future, Lee said, he’s pushing short-term fixes. The ones he favors are among those suggested by others in the industry:
Advance parole: With this permit, non-citizens whose I-526 has been approved and whose investment has been accepted by U.S. Citizenship and Immigration Services could stay in the country while they await their green card.
Employment Authorization Document: This could allow an EB-5 applicant to stay in the country and work while they wait.
Per-applicant system: Under this approach, dependents of applicants would not be included in the visa quota.
Raise the cost: If the investment requirement were bumped up to $1 million, Lee said, most Chinese investors wouldn’t flinch. Because of the booming real estate market, he said, even those in third-tier Chinese cities could afford to invest at that level.
Lee said he experienced a “confidence boost” at an EB5 Investors Magazine conference in July 2017 when he saw lawyers, regional centers, developers and government officials brainstorm topic after topic to try to solve the problems.
“You need to give the Chinese investors the same type of confidence boost,” he said. “Let them know there are people really trying to solve the issue; they are really well-resourced and well-connected people. Make them feel like people are trying to give them possibilities. It’s an achievable goal.”
He says the current, piecemeal efforts are like pop-up shops, while what’s needed is a more like a mall – a concerted, unified effort.
He urges more education and information for prospective Chinese investors.
Lee is weighing approaching Congress for relief. He believes he can offer a clear and vivid message about Chinese investors, whom he compares to DACA kids. The EB-5 program brings in immigrants who benefit the U.S. economy and culture, he said, and also fuels the development industry here, providing capital for projects.
Lee thinks the U.S. will always be more of a lure to Chinese immigrants than other countries.
“As long as Harvard is still there, as long as Stanford is still there, as long as people in China cannot log on to Facebook or Google or Twitter, there will always be a demand.”
He is grateful to have arrived in the U.S. through the EB-5 program.
“I don’t think EB-5 is wrong,” he said. “I think it can be so beautiful. I’m an example of it. My family is very happy.”