The difference between a conditional and an unconditional green card

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Foreign investors looking to build a business in the United States need to apply for an EB-5 visa, which allows them to invest money in certain locations in exchange for residency. It is a way for investors to obtain a green card and apply for permanent residency.

Green card is a proof that the holder has been granted immigration benefits such as permission to reside and get employment in the United States. It has two classifications – conditional and unconditional – depending on the validity.

Conditional green card is only valid up to two years. Holders must file another application (I-829, which takes a processing time of five months) at the U.S. Citizenship and Immigration Services (USCIS) three months before the conditional green card expires to verify investment and creation of employment. When the temporary status has been lifted, the holder will receive full residential status.

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Unconditional or permanent green cards offer the same privileges as conditional green cards but are valid for 10 years. Failure to renew after the card expires will not result in loss of the holder’s permanent residency status, but he or she may have difficulty getting a job, benefits, or re-entry to the U.S. after traveling abroad.

Aside from employment and investment, green card benefits include travel, education, and sponsorship of a spouse and unmarried children under 21 years old for U.S. residency. Foreign investors should comply with the requirements and obligations set by the USCIS to ensure residency status and enjoy the benefits of a law-abiding U.S. citizen.

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Shalom Segelman is an EB-5 visa specialist who promotes the Immigrant Investor Program. Learn more about his work by subscribing to this Facebook page.

REPOST: Chinese developers use EB-5 to fund their own U.S. projects

The number of Chinese foreign investors in the U.S. have increased through the EB-5 investment program. Learn more about the issue from this Seattle Times article by Sanjay Bhatt.

Yareton Investment, a local EB-5 investment center owned by a Shanghai real-estate developer, has a tentative deal with Tacoma to develop a hotel and residential tower. | Image Source: seattletimes.com

Tacoma’s City Council, seeking to invigorate the downtown area with a big hotel next to its convention center, recently struck a development deal with the U.S. subsidiary of a Shanghai real-estate firm.

The proposal for a 350-room hotel and a 200-unit residential tower was the only one of five bids that sought no city subsidies or incentives.

“Seems too good to be true,” one city councilman gushed.

One reason Chinese companies can raise capital from Chinese investors for such U.S. projects on attractive terms is an extra benefit: green cards for the investors to live in the United States.

A growing number of the firms raising capital through the federal EB-5 visa-for-investment program are China-based, say experts such as Elizabeth Peng, founding partner of Peng & Weber, one of Seattle’s leading immigration-law practices.

That has set off complaints from U.S. EB-5 promoters who had been the only channel for well-to-do foreigners eager to enter via the visas. They warn darkly about the possibility of fraud.

And U.S. developers using EB-5 money say it’s not a level playing field: China-based enterprises can use the visa program here, but U.S. companies themselves can’t solicit investors there.

“I can’t recruit investors directly in China,” fumes Lobsang Dargey, CEO of Bellevue-based Dargey Development, which operates Path America, an EB-5 investment center that funds his building projects around the Seattle area. “That’s why I have 40 agents in China.”
And billboards at Beijing International Airport.

Dargey buys large ads there that show a view of downtown Seattle, with the headline “Path America / The Path to your American Dream.”

Peng says about half the applications her firm is handling to establish new EB-5 investment centers come from China-based individuals or companies. The U.S. promoters’ concern is really about competition, she said: Chinese companies can have lots of cash, as well as deep personal networks in China to raise capital and cut out the middleman.

“You have cash, you have power in this market,” Peng said.

Shanghai to Tacoma
Tacoma’s deal is with Yareton Investment Funds, an EB-5 funding operation in Des Moines that’s owned by Shanghai-based Minqiang Investment Group (MIG).

Yareton received federal approval last year. Its principals are Albert Sze, a U.S. citizen, and Chun Yang, a Chinese national who founded MIG and has a home in Medina.

Sze, Yareton’s manager, said that without the EB-5 visa program, Yareton might not be able to pull off the convention-center hotel project.

The company has two years to obtain permits and sign a hotel operator.

After that, it will be able to buy city land next to the convention center for the project.

Sze says half the $170 million project will be funded by 190 EB-5 investors, mostly from China, with the balance coming from MIG and a bridge loan.

Yareton already has begun construction in Des Moines on a 235-room Four Points by Sheraton hotel it expects to open in August. Nearly 60 EB-5 investors are contributing just over half the capital needed for that $50 million project.

Sze said Yareton hopes to open the convention-center hotel in 2018. The project would create more than 1,000 jobs locally, he said.

The main headwinds facing Yareton in pulling off the project are the limited availability of EB-5 visas for investors from China as well as the sheer number of U.S. projects jockeying for them — the same challenges for regional centers owned strictly by Americans.

“There’s too many competitors, too much product out there,” Sze said.

Follow this Shalom Segelman Twitter account for the latest in foreign investments in the U.S.

EB-5 investments spur growth in the hospitality industry

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As markets struggle to regain stability, hoteliers and commercial property developers in the hospitality industry are increasingly looking to the EB-5 program as an alternate source of funding.

Introduced in 1990, the EB-5 Visa for Immigrant Investors Program allows foreign nationals to apply for a green card under the condition that they invest at least $1 million in a new or existing commercial enterprise, or a minimum of $500,000 in a Targeted Employment Area (TEA), a rural area or an area experiencing an unemployment rate of at least 150 percent of the national average.

Milwaukee's Third Ward will soon see anew, nine-story luxury hotel rise amidst the art galleries, boutiques, and restaurants in the city's historic fashion and art district. The ambitious project will be funded in large part by Indian investors through the EB-5 program. Real estate magnate Lorenzo Doumani has recently imploded his hotel, the Clarion in Las Vegas, to make way for a new mixed-use, non-gambling entertainment complex that is expected to cost between $500 million and $1 billion. Doumani is also looking to the EB-5 program for funding from international investors. In Miami, up to nine investors from the Gulf have agreed to invest in SkyRise Miami, a $430 million entertainment center and observation tower to be built on the shores of Biscayne Bay.

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Despite uncertain economic times, the hospitality industry general has thrived, thanks in large part to international tourism. Hotel owners who wish to take advantage of the opportunities offered by strong tourism but are having difficulty accessing traditional sources of capital can now ensure that their businesses remain healthy while helping create meaningful employment for qualified workers in their areas through the EB-5 program.

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Shalom Segelman is a real estate industry veteran and EB-5 specialist. Like this Facebook page for news and updates on the EB-5 program.

REPOST: Foreign Investment In U.S Real Estate

Foreign investments in U.S. commercial real estate has achieved record numbers and big headlines. China as well as the the other foreign countries were reported to have invested billion in the U.S. over the last 24 months. This article has the details.

In Mid-March of 2014, foreign direct investment in real estate sector in the United States reached up to approximately $9 billion, with several billion-dollar agreements still in process. Since the Chinese economy has gradually slackened and the Canadian market has become more saturated in the real estate cycle, foreign investors are turning their attention to the U.S. market now more than ever. Dan Fasulo, the Managing Director of Real Capital Analytics, stated that there has been an enormous inflow of investment in the commercial real estate sector over the last 24 months. In 2013 the cumulative inflow from foreign investment in direct commercial real estate was close to $40 billion according to the Commercial Real Estate Development Association.

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According to Jones Lang LaSalle (JLL), an investment firm, 10% of all capital real estate investment comes from foreign investors. The major source of investments in 2013 is coming from Canadian real estate buyers using pension funds. The Wells Fargo Center, one of the tallest buildings in downtown Seattle, was acquired by Canadian pension fund group Caisse de Depot et Placement du Quebec’s real estate unit Ivanhoe Cambridge in June 2013. Closing in on Canada’s exploits, other vital investor companies from China, Australia, United Kingdom, Norway, Singapore and South Korea have also been busy with their own efforts to penetrate the American market. According to reports by Deloitte, Chinese investors climbed up into being a significant contributor in the U.S. by investing $5.8 billion in a 15-month period. Many foreign companies are seeking partnership opportunities to explore high-profile deals, like the Chines real estate subsidiary Cindat Capital Management Co. that partnered with Chicago based Zeller Realty Group to purchase a 65-storied office tower in the area for around $304 million in March of this year. The most attractive cities for such investors are New York, Brooklyn, San Francisco, Houston, Florida and Los Angeles because of large quantity of existing commercial property. There are other countries like the UAE, Italy, France, and Switzerland whose prospective rate of growth has been increased tremendously and are considering making a move in the U.S.

The large number of foreign investors entering the U.S. real estate scene has not only impacted the country’s overall economic growth but has also had a singular effect on both U.S. citizens and foreign immigrants. While there is no direct relation between FDI and housing for students, FDI is having a positive impact on the communities by empowering strong networking among them which is supporting the international students housing. Real estate owned by foreign direct investors are more willing to extend their support to foreign students by finding them apartments to rent, or even sub-letting their homes. In some cases people sharing the same nationality tend to support these non-immigrant students by acting as their financial guarantor, which makes it easy for students to find renting options without having to suffer from unreasonable conditions.

The good news is, in the United States,care available for both citizens and lawful permanent or non-permanent residents. Many loan providing programs, such as Fannie Mae, Freddie Mac and the FHA, offer similar rules and the verification requirements are also under the same mortgage programs at comparable rates and terms. There are no extra costs, fees or even high interest rates for a non-immigrant borrower. This made the demand for houses soar to even higher levels than expected. According latest data from the National Association of Realtors, by the end of 2013 foreign buyers had increased to $68.3 billion of single-family homes, which is about 7% of total population in the U.S.

As a result of high demand for houses among foreign buyers, the prices have been increasing rapidly, with an estimated rise by about 10.9% nationwide. According to Jonathan Miller, president of appraisal firm Miller Samuel, the average one-bedroom apartment rents for more than $2,600 a month in Brooklyn, NY. This rise in house price has had an undercutting impact in the U.S real estate industry as a whole. There are many non-immigrants, especially students, who have resorted to sharing homes and even rooms. Due to increase of house rents, whereas the individual income levels remain constant, sharing homes is becoming a growing trend in many cities especially in metro areas. Not only are the international students, but also many locals are now pairing up to share houses to reduce their monthly expenses. Moreover due to high housing prices, many young-adults return under their parents’ roofs as they are trying to conserve enough money to pay for other accommodations. In addition to that, increased cost of housing is also affecting the businesses in not so positive way, especially the small and median enterprises as well as startups. Small businesses produced 46 percent of the private GDP in U.S but increase in house rent made the business difficult to operate eventually having a negative impact in the economy as a whole.

As an EB-5 visa specialist, Shalom Segelman has been promoting the Immigrant Investor program to investors around the world. To know more about the EB-5 program, visit this Facebook page.

A look at the average processing time for an EB-5 visa application

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Foreign investors awaiting the approval of their EB-5 visa application often ask how long the processing time is. It is a pretty well-known "secret" that this program is a faster route to gaining a permanent resident visa than the standard procedure of being endorsed by a citizen or having to live in the country for at least 10 years.

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This is because the requirements for the EB-5 program are pretty straightforward, since they involve funding and investment. In general, for an EB-5 application to be approved, the foreign national has to invest at least $500,000 in a targeted employment area or $1 million in another industry. The investor must also be able to supply a minimum of 10 jobs to Americans, which will help boost the local economy. There are other requirements needed, but these two are the most important.


Processing time for the application depends on which regional center the foreign investor applies in. The center is determined by where the investor intends to set up his or her business. The times may also vary depending on the type of industry the investor will fund, and the type of petition applied for (permanent or temporary).

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Typically, the entire application process should only take around from two to six months, with six months considered a fairly lengthy time. If the application has already reached this mark, it is highly suggested that the foreign investor consult with an EB-5 specialist or contact an authority that can check the current status of the petition.


Learn more about the EB-5 program by following this Shalom Segelman Twitter account.

REPOST: India moves to fast-track US investment ahead of Obama visit

The Indian government announced that it had formed a panel that will expedite investment proposals from U.S.-based companies to help American investors conduct business smoothly in the country. This article from the Fortune.com has the details.

Modi wants U.S. investors to make Indian cities smart and green. | Image Source: fortune.com

Delhi looks to build on trade breakthrough.

India’s government announced plans to make U.S. investment in the country easier, as part of its broader plans to break down the country’s notorious bureaucratic obstacles to business.

The New Delhi government said it will form a new panel to fast-track investment proposals from the U.S. to “identify bottlenecks faced by the U.S. investors…and address them in consultation with all other agencies and state governments concerned.”

The announcement appears to build on a largely successful visit to Washington earlier this year by Prime Minister Narendra Modi, in which Modi promised to make his country an attractive destination for inward investment, especially in manufacturing. Like many Indian politicians, Modi is frustrated at the degree to which India’s poor infrastructure and bureaucracy have led foreign investors to favor China over the years.

Modi’s visit had paved the way for a much bigger breakthrough in economic relations last month, when Washington dropped its objections to India’s food subsidy policies, unblocking a major deal on boosting global trade that was all but agreed last year in Bali by the World Trade Organization.

It may be a moot point whether what India needs is yet another inter-departmental panel aimed at “helping” inward investment.

However, Wednesday’s announcement is consistent with Modi’s plans to create a network of 100 “smart cities” across the sub-continent in the next six years, singling out the priority of promoting “green, advanced and smart technologies by U.S. companies in India.”

The announcement comes a month before President Barack Obama is due to visit India.

Separately, Modi’s government also announced Wednesday a general easing of the rules for foreign investment in its construction sector, Reuters reported.

Under the new rules, foreign companies will be allowed to invest in medium-sized developments with a minimum-built area of 20,000 square meters, as opposed to a current minimum of 50,000. The minimum capital investment has also been halved to $5 million, Reuters quoted the government’s statement as saying.

In addition, investors will be able to exit projects either on completion, or after the development of essential related infrastructure such as roads, street lighting and water supply. Currently, investors aren’t allowed to repatriate profits for two years.

The new rules will only go some of the way to making investment easier, as the approval for land development projects generally lies with state and municipal governments.

Shalom Segelman is an EB-5 visa specialist who assists foreign nationals gain permanent U.S. residency in exchange for job-creating investments in the country. Follow this Twitter account for more updates.

REPOST: US Rule of Law Drives Foreign Investors

Foreign investors sees U.S. real estate as a good investment. Know the reason behind this from the article below:

“The US has one of the best transparency indices; the rule of law is enforced here, so foreign investors have greater confidence in their ownership position.” | Image Source: globest.com

NEWPORT BEACH, CA—It’s no secret that foreign investors are bullish on US real estate. But which foreign investors are having the biggest impact on our market, and why is real estate here so attractive to them? Kerry Vandell, director of the Center for Real Estate at UC Irvine, will be speaking about these and other subjects at this week’s California Association of Realtors conference in Los Angeles, “The Real Estate Summit: Partnering for Change,” along with other representatives for leading real estate research centers at California’s top universities. We caught up with Vandell to discuss the issues he’ll be broaching at the conference.

GlobeSt.com: What foreign investment dollars are having the biggest impact on US real estate?

Vandell: Traditionally, at least in recent years, Canada has been the largest foreign investor in US real estate, but there’s been a real increase by the Asian countries and the various funds from those countries. China and Russia have become big players, Singapore through its sovereign wealth funds, Malaysia and Australia. And Norway has recently become one of the largest investors in US real estate through its sovereign wealth fund. Countries are making use of their oil revenue and trying to put 5% into real estate—and more in US real estate recently.

GlobeSt.com: Where geographically is most of this money going?

Vandell: Traditionally, most of the foreign money allocated for US real estate has been invested in gateway cities like New York, San Francisco and Washington, DC, but more recently we’ve seen an increasing proportion in Houston, Los Angeles and Miami (which has a Latin American flavor to it), and they’re talking about some of the money going into Austin and other knowledge and tech centers like Silicon Valley. If you’re focusing on California, the biggest amount historically was in the San Francisco area at first, then Silicon Valley, but more recently Los Angeles is coming in from a variety of sources and sectors. This also includes the Greater Los Angeles area of Orange County.

GlobeSt.com: On which sectors are they concentrating?

Vandell: When you look at the sectors, you might think of the high-end, triple-A office buildings, but foreign investment has moved substantially beyond that. Last year, a lot of foreign money went into multifamily, and this year it has been on less jazzy industrial properties. For the most part, these are not class-B properties (they are investment grade. They’re moving more into value-add a little bit, but they’re typically investing for the long haul—they’re not flippers by any means. They’re bidding down cap rates by this activity, and class-A cap rates in some major cities are below 4%.

GlobeSt.com: Why are foreign investors willing to drive up prices and drive down cap rates in order to own here?

Vandell: The reason they can do this is because they don’t have all the strictures. If they’re holding a property for several decades, they can accept the risk. One thing that’s often overlooked: a lot of single-family residential is being bought by foreign nationals, and it can be urban condo or suburban high-end markets. A lot of capital moving out of China into investments elsewhere is motivated by future holding and possibly for family members. This has happened before to a degree—in the late ‘80s, this was going on in the Bay Area.

GlobeSt.com: Why are foreign investors seeing US real estate as a good bet?

Vandell: These folks can pay all cash, and strict mortgage qualification standards in this country have put a damper on new-home and family-home construction and the ability of people to transact domestically to buy their first home. This is attracting institutional and foreign investors. One of the factors is that institutional investors use a transparency index that deals with risk and other issues related to real estate, and the US has one of the best transparency indices. The rule of law is enforced here black money exchange is minimal in the US, and we have a very transparent process in terms of acquisition, so they have a greater confidence in their ownership position.

Also, the dollar has gotten stronger relative to many currencies, so they’re trying to get an additional pop through currency appreciation. It’s not true in every case, but many European currencies are much weaker than before.

In addition, there’s a sense that the US is in a sweet spot in terms of growth in the economy. The demand for real estate is clearly related to the growth in the economy. As the economy grows, the demand for hotels, industrial—virtually all of the sectors—increases. China is slowing down somewhat, and many European economies are not doing well—along with Latin America—so from that standpoint, it looks attractive, too.

And finally, there’s EB-5. I have students in China from well-to-do families who are actively involved in this. They started their own programs where they bring this money in and it’s pooled for larger investments. EB-5 is one of the major sources of capital for real estate development in the state of Vermont, which has formalized this process. They like to get their money out of the country as quickly as possible—that’s a driver, too—but there are also restrictions holding the money back.

GlobeSt.com: Are foreign investors impacting values and the amount of distressed real estate?

Vandell: To the extent that there’s a large stock of distressed real estate, it’s not primarily where their money is going. This is not a major focus of foreign investors, so there’s less of an impact there, although it’s clearly having an impact on non-distressed properties. There’s a huge demand from foreign buyers for condos in New York City, and we see some of that here in high-end areas. This is certainly having an impact on values and driving cap rates down. Yield is more important to domestic investors than to foreign because they’re looking at longer hold periods.

Sovereign wealth funds have become so important. Basically, all the sovereign wealth funds diversified into many different types of investments, but this never happened in the US. In the Middle East, China, Norway and other European countries, Australia, Japan and Singapore, they all have sovereign wealth funds that have been a major source of investment capital. They recognize investment-grade CRE especially—it’s really a global market now. It’s broadly diversifying across the world.

Learn more about the EB-5 program by following this Shalom Segelman Twitter account.