مهاجرت آگاهانه و موفق Successful and Smart Immigration

Immigration to the USA through EB 5  (Investment in Florida)

by Mr. Ali Mokhtari and Mr. Louis Leblanc

Mr. Mokhtari:

I am very happy to see you here and thank you for accepting our invitation to be in our program.

Mr. Leblanc:

It’s my pleasure to be here. Thanks for your invitation.

Mr. Mokhtari:

We have some questions about EB 5 program and some projects that you have in Florida. But first, can you please introduce yourself and talk about your carrier in a few minutes?

Mr. Leblanc:

Absolutely. Thank you very much. I am senior vice president at National Financial which is the investment body of National Bank of Canada. I’ve been involved in investment program in the past 30 years. In fact, some people say I am one of the founding fathers of the Canadian investment programs back in 1986, with national Bank of Canada, serving more than 1700 families to settle in Canada in relation to the investment programs. Five years ago, I started to get involved also in the EB 5 program in the US because simply as you might be aware, rules have changed in Canada. Sums increase and there was a more rules posed by the federal government. So, I had friends of mine around the world said : well we have such a great business programs, why don’t we try to bring our Canadaian experience and expertise to the EB 5 program. So, I decided to get involved in the EB 5 program and 5 years ago and since then, we’ve had great success on the EB 5 because now we are in a position that we have more than 25 public schools that we founded which are open in the state of Florida.

Mr. Mokhtari:

Mr. Leblanc, what are the advantages of these projects that you have in Florida in terms of job creation and also reimbursement of the capital of the clients?

Mr. Leblanc:

Yes, you know, about the EB 5, it is very important to remember something. It’s initially the name of it. EB 5 stands for: “Employment Based Visa”. So, a lot of people forget that. The most important point of EB 5 is that you must make sure that you create jobs in relation to your investment because on the EB 5 program there are two main risks:

• Immigration risk: You got to make sure you got your proper job counts at the end of 2 years to qualify for the final Green Card.
• Financial risk: How am I getting my money back at the end of the 5 years? So, when we took these issues in consideration, we decided to work with very secure places we could do, as we have done in Canada. That is work with government. So, we decided to work in partnership with the state of Florida for the funding of the construction of public schools. You might be aware that in Florida, there is a great need of new schools, because there is a big movement of population in the state of Florida. And, we wanted to have projects which A): Offer a great job account and B): Which are able to guarantee the reimbursement at the end of 5 years. And, we found the construction of the schools in the public school system was the best avenue for our clients.

Mr. Mokhtari: How successful are these projects?

Mr. Leblanc: We are very happy that we now have 100% success in our files. We started 5 years ago by setting our first schools. As I say now, we are in 14 school operations and in the verge of delivering of 10 more schools at the end of July. Schools start in August in Florida and we are up to 24 schools offered in relation to the EB 5 program.

Mr. Mokhtari: We know there are so many EB 5 projects here and there. Why investors should invest in these projects? I mean, what’s the specific advantage of charter school projects in Florida?

Mr. Leblanc: You are asking a very important question. There is a lot of EB 5 projects offered around the world right now. As I said, the clients must understand the EB 5. There are two issues that must be considered: First, you must consider the issue of job creation, because EB 5 says you must create 10 jobs per unit of investments and that’s very important to understand. A pure EB 5 is a one million dollar investment against which you must create 10 direct jobs. Now, the US government adopted a project 7 years ago and said well, if you invest in an area of higher unemployment level, then you will get two breaks. It means, instead of being 1 million dollars of investment, it is half a million dollars of investment and your jobs have what you call multiply affects.  It means when you build the schools, you can count the direct jobs which are the teachers and you can count indirect jobs which are construction workers doing the construction phase.  So, the first point you remember on the EB 5, is the job creation. You must make sure that you invest in a project where the jobs would be created. Because when you are getting a Green Card to enter the US, it is a conditional Green Card. The condition says that in two years after you landed in the US, you must then petition to the US government to get your condition removed and you must show the jobs you committed to, when you submitted your application, have been realized. So, that’s why job creation is very important. The beauty with the charter schools is the very matter of creation of jobs. The state of Florida needs to build public schools every year in September. Instead of building schools by borrowing money and incurring debt and having teachers which are part of the unions, what they do is to issue a charter. Then, they will have private companies that build for the charters and these private companies will a): build the schools, and b): operate under the guideline of the state. Now, the advantage here is about the voucher per child per year. The voucher is anywhere between 6 to 9 thousand dollars per child per year. It is a free school and a public school completely funded by the state of Florida. When the schools open, there is a variety list of children to enter the school. The state only builds the schools in demographic areas with missing schools and long waiting lists. It means guaranteed revenue which is produced by these schools. So, that is the most important point. As I said earlier, the most important issues are job creation and the money back guarantee for the investors after the end of 5 years. That is where we brought our Canadian experience into this project and what we offer is very straightforward placements. It is very simple, that is, financing. On a typical school, the 75% of equity is putting by local Floridan partners and we are their partnerships. We, in Green Access, are general partners and our clients are being limited partners. We make a loan of 75% of the value of the building and that loan is guaranteed by first rate mortgage on the land, the building and the rental income with an exit strategy at the end of the 5 years. So, the clients make a loan of 5 years and they gather the money back at the end of the 5 years. So, they fulfil the two main conditions. As I said, it is very important. On the EB 5, what you get is a conditional visa to enter the US with a Green Card which is conditional. You must remove the condition in two years time after you are landing in US. The first point is to get the condition removed by creating 10 direct jobs. After that, you get your fund reimbursed because you loan money for the building of a public school.

Mr. Mokhtari:

So, according to you the risks of investment in this project are very low.

Mr. Leblanc:

Well, absolutely. The risks are for the state of Florida because the one who is paying for the voucher for every child is the state of Florida. In Canada, we offered government bounds. In the US, we cannot have a government guarantee, but we can get involved in the projects where all the revenue of the projects is paid by the state. And in Florida, we have an increasing population, so the need for the public schools is increasing every year. The most important advantage is the realization of the project. What I mean by this, is that there is a lot of people out there promoting the EB 5 projects and a lot of people are very good operators in being able to raise the money. However, it is not an issue of just raising the money. The issue is doing the project for proper investment. So, my advice to all of the clients looking at EB 5 is to make sure that you invest in a project that will sure be realized and will sure be executed in a proper amount of time. Let’s not forget that what you are getting is a conditional Green Card and you must be able to demonstrate at the end of two years after you landed in the US that your jobs committed to be created through the project have been realized. If the jobs have not been realized, eventually people can face eviction from the US. So, it is very important to be involved in a project which commits to a proper date of realization. The beauty with the charter schools is that the charter is issued by the state of Florida and they must be committed to an exact time of realization. According to the charters, these schools have two years to be built. But, these schools approximately take about only 8 to 9 months to be built. The schools are pretty much similar in terms of their size and the projects related to these schools are around 30 to 40 million dollars projects. All these schools can be built very quickly within a year which is very important for the clients because the clients would be able to lift the condition from their Green Cards.

Mr. Mokhtari:

We hear some changes to come to EB 5 program. What’s your opinion on that?

Mr. Leblanc:

There was supposed to be changes last September and they did occur. It is supposed to be further changes coming this September. From September 30, there will be five weeks away from US elections. So honestly, I don’t expect a lot of changes.  However, there might be an increase in the sum being invested by the clients going from $500,000 to $800,000, and also there might be some changes in technical issues as regards rural placements versus urban placements. I am leaving for Florida today and I am having a meeting with the head of USCIS. I’ll be able to report to you later on about the impending changes coming. But, as much as I know, these coming changes to EB 5 program will not be substantial. Though, I would encourage clients to wish to take advantage of the program prior September 30^th, to apply sooner than later. So, they are able to submit their application before that date.

Mr. Mokhtari:

What are the eligibility criteria to apply as an investor to EB 5?

Mr. Leblanc:

I know you are an expert in Canadian immigration and we are all working on the either Canada or Quebec investment programs. And, there’s always been the notion of business background. The beauty of EB 5 is that there is no business background whatsoever. The only thing you must be able to show is the legitimate source of your funds so, you need to show the source of fund.  And, donations are allowed. We have many clients with an adult child who cannot find a job in the US and then the parent will be giving half a million dollars as a donation to the adult child and the child could apply for the EB 5 program. Or people, who don’t have the proper business background to be able to prove, as we have the case in Canada, could easily apply for EB 5 in the US.

Mr. Mokhtari:

So, applying to EB 5 is far easier than any other investment programs?

Mr. Leblanc:

Absolutely. The criteria are much straightforward. All the process is the paper process. There are no interviews before your acceptance. It is approved by USCIS in Washington and once you are approved, there will be an interview at the embassy.  But it is only for identification purposes. It is not about the business background because the business project has been approved by the USCIS.

Mr.Mokhtari:

So, you don’t have to answer any questions regarding the EB 5 project you are involved and where the money has come from.

Mr. Leblanc:

No, they are approved. They need to have general knowledge on what they are invested into which will be a public school in Florida. Other than that, the entire investment project has been processed through the paperwork.

Mr. Mokhtari:

How long does it take to obtain a Green Card in the EB 5?

Mr. Leblanc:

My experience has proven to me that we can anticipate a spectrum of approximately within 2 years from the clients filing the application up to their acceptance from USCIS and interview in the office and in the visa office the clients are granted the papers to land in the US. So, basically I’d say a spectrum of 2 years is a reasonable anticipation.

Mr.Mokhtari:

What is the exact role of your institution, that is, Green access vis-a-vis the regional centres and also the filing lawyer?

Mr. Leblanc:

In US, we encourage people to be at “arm’s length”.  Green Access, as the general partner, in partnership with the investors as the limited partners, makes a loan to the project developer. The regional centre has no equity stake whatsoever in the project. In the US, in order to be able to have a half a million dollars investment, you must be approved by the regional centre. In our case, the state of Folrida is the regional centre which has the authority across the state of Florida. This regional centre, that is, the state of Folrida has no equity stake in the project, itself. It is arms length to Green Access and to the project itself. The filing immigration lawyers only practice immigration law. They have no investment interest, and no equity stake in the project. This is out of the pure ease of management that you got to make sure that everybody is at arm’s length so that we have no conflict of interests. To explain more: there are three entities : 1- general partner which oversees the loan, 2- regional partner which oversees the negotiation, 3- filing immigration lawyers who are responsible to submit the client’s file to USCIS. In my opinion, all these entities should be completely separate.

Mr. Mokhtari:

So, you are offering that if the filing lawyers and the manager of the regional centre are, at the same time, the owners of the project in the EB 5 projects will increase the risks of investment?

Mr. Leblanc:

Based on my 30 years of business experience, I am saying that this is not a robust financial transaction because there might be conflict of interests. So, I think everybody should mind their own business.

Mr. Mokhtari;

Mr. Leblanc thanks very much again for being here and attending this interview. I received all the answers to my questions and I am totally convinced this is a very good project. However, there might be more questions and we might send you the questions by email, if you don’t mind?

Mr. Leblanc:

Absolutely. Thank you very much for the occasion. I’ll be glad to be at your clients’ service. If you have any more questions, please feel free to ask. I am available at any time.