“Documentation, documentation, documentation.” That is a standard axiom of well-run businesses. Operations auditors will tell you, “If it isn’t documented, it never happened.”
When you search for a Chinese Agency, you will want to have documented evidence that they are what they say they are. They also have a right and responsibility to expect the same from you. The key factor when presenting an EB-5 project in China is documentation.
Don’t expect to walk into an Agency with nothing more than a brief case, a business card, and a smile. USCIS monitoring of Regional Center activities in presenting projects has been somewhat lax. However, that oversight has been improving since 2007.iv When the boundary lines are blurry, there is a tendency to draw outside of them. Aside from some outright scams, it is fair to say that some Regional Centers have had a tendency, as many B2B companies do, to “presell” a product or project in order to be first to market. I have first-hand knowledge of more than one Regional Center that have fallen prey to this temptation by jumping the gun and presenting a project before it has been officially approved by the USCIS.
I am not here to judge their motives. I am here to point out that, while “preselling” an EB-5 project may work in some countries, it will not fly in China, regardless of how far along the approval process it is. I am saying that it is wrong for you to present a project as “approved” while official approval is still pending. But I would submit that it might be a tiny bit foolish and a whole lot more expensive to travel to China without the documentation that establishes the legality of your Regional Center or the approval of your EB-5 investment project. No reputable Agency will discuss a project that has not been certified by the USCIS.
WARNING: Unless you like wasting your time and money, do not go to China without adequate documentation that proves that your Regional Center and your EB-5 project are legitimate. Not having adequate, verifiable, supporting documentation does not mean that your business and project are not legitimate, but it does mean that Chinese agents will not be interested in spending their time with you. At the end of the day, all that your $10,000 trip to China will do is give you the chance to eat some authentic Chinese food, and maybe take a chance to visit the Great Wall.
How Much Documentation Is Enough?
The essential piece of documentation is the evidence of your current license to operate as a Regional Center or an EB-5 attorney and the official USCIS document(s) approving your project as EB-5 eligible. This information establishes your legitimacy, but it is not all you will need to adequately present your project.
IDEA: Don’t lay all of your documentation on the table at once. Share what is needed at the point when it is needed, in an orderly fashion. Establish your credibility first. As the conversation moves forward, respond to your host’s inquiries with the documentation that answers their immediate question. Your credibility will be better established and your expertise will be confirmed when your answers to their questions begin with “Let me show you . . .”
In addition to the fundamental documentation, the following paragraph lists some other items you may want to have available in anticipation of issues that will be put on the table.
A written legal description of the project. Any additional state or federal authorizations or approvals of the project. A summary list of EB-5 investment opportunities that you currently represent. This summary should include a brief overview that includes industry sector, business description, location or the project site, and total investment required for the project. Evidence of any EB-5 projects that you have managed or represented in the past. You may want to include progress milestones and evidences of success in meeting them consistently. Information about who will manage the company in which the clients will invest. For the greatest impact, this should include both executive and operational management. Since it is possible that investors may want to play an executive or operational role, you may want to establish what roles are open to qualified individuals.Market statistics and forecasts, such as:
What is the current size of the market? What are the projections for the market? Who is the competition? How much market share do they have? What competitive advantages do they have? What is their vulnerability? What is the current market share of the EB-5 opportunity, if any? The business plan for your project, including: What makes the project unique? What makes the project compelling? To customers To investors Is it reasonable to think that the goal of gaining Green Cards will be successfully reached? Details about the operating budget for your project, such as: Is the project adequately funded? Information on the other investors, including: What portion of the total project cost is my investment? What voting rights come with my investment? A well-defined exit strategy. Altogether too many companies do not plan their exit strategies at the front end.The Chinese Agents will help ensure that you do not forget, because they will want to know. Once the EB-5 Agencies see official documentation from the government of the United States and a well-conceived project, they should be willing to start a long-term business partnership with you.
How much documentation is enough? The answer is: there is never enough. Be diligent. Be able to provide more information than you think you need. Anticipate every question. For instance, be prepared to not only indicate who the other investors are, but also what share of the project their investment represents. Be prepared for a good Agency to dig a little deeper. Make sure that there is more gold (that is, solid, clear answers) available every time they dig.