When you set aside the primary reason for the EB-5 program, which is to
expedite immigration into the U.S. for willing investors, and the
accompanying piles of paperwork required to achieve that objective, the rest
is all about money. Everyone who is in the game - including you - is in it for
the money. You may protest that it’s all about things like helping people and
improving the economy or adding jobs, but the bottom line is, if you are
reading this, you are trying to get in on the action. There is nothing inherently
wrong with that. Everyone needs to make a living. Just don’t be naïve enough
to think that there are not businesses on both sides of the Pacific Ocean that
would try to extract every available Yuan out of a client’s pockets. Here is
how the system works in general.
How the Chinese Agencies Make Money
1. They charge clients fees for processing visa and immigration paperwork. This
is what these Agencies do, and it is what they would do even if the EB-5
program did not exist. In many cases the fees are not standardized. Fees are
primarily dependent upon the amount of paperwork that needs to be filed.
However, an Agency can pretty much do anything from a cost-plus a la carte
format, to negotiating fees on a customer-by-customer basis. Until the
program becomes more mature, HNWI Chinese will be willing to pay
whatever fees they feel are reasonable, trusting that the Agencies will handle
everything efficiently based upon their expertise.
2. The Agencies may charge clients for the right to have a dedicated sales
manager assigned to them. This is where the water can get a bit muddy. That
dedicated sales manager may actually be working for several clients, despite
what the Agency has represented as their client’s exclusive access to him.
3. The Agencies negotiate a fee based on their evaluation of the project
(which is often superficial) and the amount of money a client is investing.
This means that the more the client is putting into the investment, the higher commission the Agency will seek from your business or even from
a client. Commission rates typically average from three to ten percent.
We should reiterate, however, at this point, that the vast majority of
clients are investing the minimum $500,000. Wouldn’t you?
4. The Chinese agents and clients expect Regional Centers to make their
money on the actual EB-5 project.
Typical Fees
While these numbers may change from time to time and from Agency to
Agency, on average Regional Centers should expect to pay an Agency $20,000
to $60,000 upon completion of the I-526. The larger Agencies may well ask for
more. This referral fee is negotiable, but, again, you must be careful you don’t
pay them too much or you will have a hard time being profitable. The amount
that a Regional Center pays to an Agency is typically held close to the vest. The
client is usually asked to pay:
$40,000 to $60,000 in management fees to the Regional Center
sponsoring the project
$20,000 to $25,000 for a U.S. immigration attorney
About $3,000 for translation fees
$1,425 for an I-526 (per family)
$410 for a DS-230 (per person)
$2,930 for an I-829 (per family)
$85 per person for biometric fees
Referral Fees
While some people think that Agencies try to get referral fees (a fee per client found
to match your project), the Chinese government might consider this practice illegal.
This also applies to charging a U.S. attorney for a referral or as a finder’s fee. Many
existing agents are already contractually engaged with a U.S. attorney. A client who
does not know this risks getting hoodwinked by an Agency that charges them a fee
for finding a suitable attorney.