Figuring Out the Financial Arrangements

Figuring Out the Financial Arrangements

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.

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