eb5 program presentation 9 12
TRANSCRIPT
EB-‐5 Immigrant Investment Program for Texas
Dandan (Danna) Zou
President and CEO, Texas Investment Regional Center Vice Chair – Greater Austin Chinese Chamber of Commerce Chairwoman – GACCC International Investment Committee
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Agenda � Texas Investment Regional Center (TexIRC) � What is the EB-‐5 program? � How does the EB-‐5 program work? � Who invests in EB-‐5 projects? � What’s in it for Central Texas Businesses? � How can Texas Investment Regional Center (TexIRC) help you?
� Current Project
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Texas Investment Regional Center (TexIRC) Matching
with strong
in Texas
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USCIS EB-5 Program
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� Heavy Focus on job creation
� Attract and encourage foreign investment in US
USCIS EB-5 Program Quick History
� EB-‐5 category created in 1990 � 10,000 EB-‐5 green cards available each year � 3,000 set aside for regional centers (RC) � Total visas issued:
� FY 2011 – 3,805 � Q1 FY 2012 – 1,293
� Slow start; Congress added regional center pilot program in 1993 � Started to grow in mid-‐1990s
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USCIS EB-5 Program Quick History
� EB-‐5 program is now on the increase especially through regional centers
� 90%-‐95% EB-‐5 visas obtained through RCs � 194 approved RCs as of June 2012 stakeholder meeting -‐Just two years ago, there were only 114 � 20 approved RCs in 2008
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How does EB-5 Program Work? � Obtain Regional Center Designation � Investors invest in projects through Regional Center � Investors File for Conditional Residency and move to U.S.
� 2 years later, file for permanent green card if: 1) the capital is still in place and 2) 10 jobs have been maintained per $500k investment
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3 Components of EB-5 Program Regional Center Designation
Investor Marketing Regional Center Operations
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Who invests in EB-5 Program?
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Who invests in EB-5 Program? � Chinese allocated 21% of their assets to real estate. Global average is 14% *
� Chinese interests in overseas real estate and immigration are getting stronger.
� Drop in housing prices in US � Steady RMB have created an opportunity for wealthy Chinese to invest in real estate in the US.
*Asia-‐Pacific Wealth Report 2008 by Merrill Lynch and Capgemini
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The Wealthy in China � China has 960,000 ‘millionaires’ with personal wealth of 10 million Yuan or more (USD$1.5 million) **
� Up 85,000 individuals or 9.7% year over year � 2009 -‐ 825,000 millionaires � 2010 -‐ 875,000 millionaires � China also has 60,000 ‘super rich’ with 100 million Yuan or more, up 9.0% over last year
� 4 out of 5 Chinese millionaires are considering sending their children to study overseas, with the US and UK their preferred destinations.
� Report also indicates that about 27% Chinese billionaires have been involved in emigration investment.***
** The GroupM Knowledge -‐ Hurun Wealth Report 2011 http://www.hurun.net/hurun/listreleaseen548.aspx
*** “China's Private Wealth Report 2011” issued by China Merchants Bank
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Why do investors want EB-5? � Permanent Residency in the USA � Access to good schools for their children � Growing cost of living in Asia � Uncertain political climate in China � Half of Chinese millionaires polled in 2011 said they are thinking of emigrating, mostly to North America*
*Hurun Research Institute and Bank of China report, Nov. 2011
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Why does the USA want EB-5?
� Investment Capital and Jobs!!! � Since its inception in 1990, EB-‐5 has been responsible for: � 46,810 jobs � more than $2.3B in investments � all at no cost to the government
� Congress and Senate both voted to extend the program for 3 more years with bipartisan support
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� Businesses considering EB-‐5 as alternative capital, sometimes the only source of capital � EB-‐5 may be the answer for many investment projects without traditional capital funding � Job creation is mandatory requirement for EB-‐5 � Texas is currently behind East and West Coasts in EB-‐5 deals
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What’s in it for Central TX Business?
Why use a Regional Center? � Regional Centers (RCs) bring investors to deals � Potentially bring manufacturing projects from China � The Regional Center Pilot Program allows $500k minimum qualifying investment if invested in a TEA or Rural Area vs. $1M minimum
� TEA designation – area with unemployment of at least 150% of national average.
� Rural Area – geographic area outside of an MSA and in a town having a population of 20,000 or less. � RC allows indirect job creation to be counted
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What projects are a good fit for EB-5 Capital?
� $25M to $125M � Job Generators – need 10 perm. jobs per EB-‐5 investor � Public and Private partnerships � “Shovel ready” projects
� Business plan � Economic analysis that will satisfy USCIS
� Located in a TEA or Rural Area � Ongoing support
� New high net-‐worth immigrants need housing � Support and services for new immigrants
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Important Sectors for EB-5 � Hotels � Health Care � Manufacturing � Senior Living and Assisted Living Facilities
� Charter Schools � Much more … … 17
Who is using EB-5 Funding? � Developers for Marriott, Hilton, Hyatt, Starwood � City Market at O Street-‐ $225M mixed use project in Washington D.C., $15M in EB-‐5 funding
� Hutchinson Medical Office Complex–part of the 42 acre multi-‐building office campus in the Bronx
� West Village-‐Dallas, 20 story $100M mixed use project, $64M in EB-‐5 funding
� Solaris Project – a $375M mixed use project in Vail, Colorado, $80M in EB-‐5 funding
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EB-5 First Lien Capital Stack Example
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Project Cost $30M
Private Equity 25% $7.5M
EB-‐5 Loan 75% $22.5M
EB-5 Second Lien Capital Stack Example
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Project Cost $50M
Private Equity 25% $12.5M
Construction Loan 40% $20M
EB-‐5 2nd Lien 35% $17.5M
Total Debt 75% $37.5M
How can TexIRC Help You? � Established to help fund activities in Texas, with focus on central Texas
� Help configure projects so they are best suited for EB-‐5 program � Committed to the highest level of integrity and ethics to all stakeholders: � Investors � Developers/business owners � USCIS
� TexIRC is focused on the following markets: � Commercial real estate development � Accommodation � Restaurants � Manufacturing � Senior Living
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Q&A
Texas Investment Regional Center (TexIRC) www.TexIRC.com
512-‐850-‐6568
Dandan (Danna) Zou
President and CEO, Texas Investment Regional Center Vice Chair – Grater Austin Chinese Chamber of Commerce Chairwoman – GACCC International Investment Committee
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