EB-5 Immigration Advice On Due Diligence

Mark Ivener, of Ivener and Fullmer LLP, an immigration law firm based in Los Angeles, recently spoke with EB-5 Investment Report’s Aimee Rios about due diligence, its impact on the EB-5 industry and the questions that must be asked.

  • Share on TwitterShare on FacebookShare on Google+Share on LinkedInEmail a friend
Mark Ivener

Ivener emphasizes the importance of due diligence within the EB-5 program

Due Diligence is the ability of a client to determine whether what they are going to invest in is, number one, safe; is it an investment where they are ultimately going to get their money back? ...

Riverside, CA (PRWEB) January 21, 2014

Mark Ivener became involved with the EB-5 program in the mid-90s when some of his high-net-worth clients were looking for a green card. Having some knowledge about the program, Ivener was able to connect them with a regional center to invest in a project and eventually get their green cards. Over 25 years later, Ivener continues to help his clients navigate through the EB-5 process with the ultimate goal of receiving their green card.

One of Ivener’s areas of expertise in EB-5 is on due diligence. He often speaks at various EB-5 events advising other attorneys, regional center principles, investors and anyone interested in the program on the importance and process of due diligence. He says, “Due Diligence is the ability of a client to determine whether what they are going to invest in is, number one, safe; is it an investment where they are ultimately going to get their money back? Is it an investment that is going to lead to a green card? In order to answer those questions to themselves, they have to ask a lot of questions of the regional center and of, in some cases, the developer.”

Due Diligence continues to be a hot topic in EB-5, especially in light of the lawsuit filed by the SEC against the Intercontinental Regional Center Trust of Chicago. Their convention center project offering contained documents were falsified, but luckily, investors did not lose their investment. Ivener said, “People at least, so far, have gotten their $500,000 back…but this really has caused havoc in China…Investors did not do much due diligence at all.”

So who is responsible for doing due diligence and what questions need to be asked? Ivener says for the most part, especially in China, which encompasses approximately 80 percent of the market, it’s the agents that need to do the due diligence on behalf of their clients because it is [the agent’s] reputation that is at stake. Some questions that should be asked include: How long has the developer and regional center been in business? Has the regional center lost money? Does the regional center have any U.S. investors? What is the timeliness of the return?

Although EB-5 Investment Report has heard some reports that investors are more concerned about receiving their green card than getting their money back, Ivener disagrees. He says, “Investors are not that concerned about what the return is. They all want their $500,000 back.”

Another question investors should ask is: what are the fees that they are paying their brokers. According to Jason Li of Cansine, a large emigration consulting firm in China, the normal range is between $40,000 and $45,000. But many investors are unaware of the fees and Ivener says they need to be transparent.

The disclosure of broker fees and the importance of due diligence will continue to be hot topics in the coming year, Ivener says. But another hot topic is the back log of visas and the possibility that the EB-5 program will hit the 10,000 visas allocated to program when the fiscal year ends on September 30th. Ivener says, “It is projected--we don’t know for sure—that probably the last three months, the back log will hit which will affect China.”