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Palisades China Group Palisades Consulting Group, Inc. Foreign Investment in American Enterprises: The “EB-5 Immigrant Investor Program” Presented by Eva Lerner-Lam, President Palisades Consulting Group, Inc. at The 2012 New Jersey Women’s Entrepreneurship Series The Westin at Forrestal Village, Princeton, NJ February 23, 2012

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Page 1: Palisades China Group Palisades Consulting Group, Inc. Foreign Investment in American Enterprises: The “EB-5 Immigrant Investor Program” Presented by Eva

Palisades China GroupPalisades Consulting Group, Inc.

Foreign Investment in American Enterprises:

The “EB-5 Immigrant Investor Program”

Presented byEva Lerner-Lam, President

Palisades Consulting Group, Inc.at

The 2012 New Jersey Women’s Entrepreneurship SeriesThe Westin at Forrestal Village, Princeton, NJ

February 23, 2012

Page 2: Palisades China Group Palisades Consulting Group, Inc. Foreign Investment in American Enterprises: The “EB-5 Immigrant Investor Program” Presented by Eva

Palisades China GroupPalisades Consulting Group, Inc.

Overview• Traditional sources of capital• “New” source: United States Citizenship and

Immigration Service (USCIS) Immigrant Investor Program (EB-5 Visa)

• Current Status of the Program• Pros and Cons • How to Get Started• Recommendations

Page 3: Palisades China Group Palisades Consulting Group, Inc. Foreign Investment in American Enterprises: The “EB-5 Immigrant Investor Program” Presented by Eva

Palisades China GroupPalisades Consulting Group, Inc.

Traditional Sources of Capital

• Savings• Family and Friends• “Angels”• Venture Capital Funds

Page 4: Palisades China Group Palisades Consulting Group, Inc. Foreign Investment in American Enterprises: The “EB-5 Immigrant Investor Program” Presented by Eva

Palisades China GroupPalisades Consulting Group, Inc.

USCIS Immigrant Investor Program• “EB-5,” created by Congress in 1990 to stimulate

the U.S. economy through job creation and capital investment by foreign investors

• All EB-5 investors must invest in a new (since Nov. 29, 1990) or distressed commercial enterprise

• Must create or preserve for 5 years at least 10 full-time jobs for qualifying U.S. workers

• The minimum qualifying investment in the United States is $1 million (or $500,000 in a high-unemployment area (Targeted Employment Area (TEA)) or rural area)

Page 5: Palisades China Group Palisades Consulting Group, Inc. Foreign Investment in American Enterprises: The “EB-5 Immigrant Investor Program” Presented by Eva

Palisades China GroupPalisades Consulting Group, Inc.

Current Status• Although not new, the EB-5 Program is growing

exponentially due to increasing wealth and global sophistication of the middle class in China and awareness by American cities and towns

• Process is undergoing rapid change toward more flexibility—and accountability--for investors and enterprises

• Mostly “small” individual investors at $500,000 level

Page 6: Palisades China Group Palisades Consulting Group, Inc. Foreign Investment in American Enterprises: The “EB-5 Immigrant Investor Program” Presented by Eva

Palisades China GroupPalisades Consulting Group, Inc.

Scale

• From FY92 through June 2004, immigrant entrepreneurs who completed the EB-5 benefit requirements and attained permanent legal residency invested about $1 billion.

--US Government Accountability Office, April 2005

Page 7: Palisades China Group Palisades Consulting Group, Inc. Foreign Investment in American Enterprises: The “EB-5 Immigrant Investor Program” Presented by Eva

Palisades China GroupPalisades Consulting Group, Inc.

Pros and Cons

• Pros:– Substantial cash is available from foreign investors– Small investor to small entrepreneur = same

playing field

• Cons:– “Wild West” conditions for the foreseeable future– Rapid growth is spawning new, unproven

“experts”

Page 8: Palisades China Group Palisades Consulting Group, Inc. Foreign Investment in American Enterprises: The “EB-5 Immigrant Investor Program” Presented by Eva

Palisades China GroupPalisades Consulting Group, Inc.

How To Get Started

• Prepare documentation that would qualify your enterprise as “new” or “distressed”

• Attend EB-5 Forums to meet agents, attorneys and individual investors

Page 9: Palisades China Group Palisades Consulting Group, Inc. Foreign Investment in American Enterprises: The “EB-5 Immigrant Investor Program” Presented by Eva

Palisades China GroupPalisades Consulting Group, Inc.

Recommendations

• Read up on EB-5 Immigrant Investor program at the official USCIS website: http://www.uscis.gov/eb-5-investor(Regulations: 8 CFR 204.6 and 8 CFR 216.6)

• Visit your state congressional representative for latest updates on what NJ is doing to facilitate the EB-5 Immigrant Investor Program

• Choose your attorney wisely

Page 10: Palisades China Group Palisades Consulting Group, Inc. Foreign Investment in American Enterprises: The “EB-5 Immigrant Investor Program” Presented by Eva

Palisades China GroupPalisades Consulting Group, Inc.

Thank you!

This presentation available at:palisadesgroup.com

Eva [email protected]