Building a Long-Term Relationship with an EB-5 Agency

Building a Long-Term Relationship with an EB-5 Agency

By now you may have figured out that EB-5 Agencies in China are a bit like

the Cuba Gooding character in the film Jerry McGuire. They tend to have one

thing on their mind: “Show me the money.”

CAUTION: The unfortunate situation is that EB-5 Agencies in China are more

interested in how much they are going to be paid than they are in anything

else, including the financial soundness of the investments that their

investors may make. It is a reality that you are going to have to deal with.

They will talk a good game about wanting to know your reputation and

experience, but, at the end of the day, it is probably going to come down to

how much money you are willing to put into their hands. This is especially

true with the larger EB-5 Agencies. Many of those agents have become quite

wealthy by using the EB-5 mechanism to extract large fees and commissions

from U.S. Regional Centers who are willing to pay large sums of money in

order to locate investors.

Rarely, if ever, do Chinese EB-5 Agencies do any due diligence into Regional

Centers or the actual projects they sponsor. The fact is, they don’t care. They

will arrange to make connections between investors and projects, take as

much as they can get from the investors and the Regional Centers, and then

not worry about whether the project is able to reach its full potential. If the

project fails, it is not their fault. If you, as a client, complain that a project did

not live up to your expectations, it will be your problem, not the Agency’s.

John Roth, an immigration attorney, financial advisor, and EB-5 consultant,

visited several EB-5 Agencies in China to offer them due diligence services to

investigate Regional Centers and their projects. He asked a mere $10,000 for

his services. Not one Agency was interested in his offer, despite it being a

small amount compared to the millions of dollars large Chinese Agencies are accustomed to handling.vii He describes the situation as “A pernicious selfselection

process going on in the China EB-5 market, [to the extent that] the

more sophisticated and analytically-oriented investors are not likely to sign

on with an emigration agent at all.” Having analyzed some of the major

scams in the U.S. involving EB-5, he found that “all show the same pattern of

small projects finding investors in China by paying very high fees to Chinese

emigration agents, and no one performing even superficial due diligence.”

So, where does that leave us in terms of building a long-term relationship

with a Chinese EB-5 Agency?

My editor had a saying when he was in business. “It’s not so important that the

guy I’m working with is a snake. It’s much more important that I know that he is

a snake. He is what he is. I just have to know what he is so that I know how to

deal with him.”


 We have already discussed having documentation. We suggested

that you not expose everything about your project, but rather do so

bit-by-bit. Expand on that by not being in a rush to expose it all until

you are certain that the Agency is more interested in your project

than your money. If you sense that it is more about the commission

than about the project, walk away.

 The fact that they may not be inclined to perform due diligence is all

the more reason for you to do so regarding them. You can save a lot

of time and expense by checking with trusted friends in the U.S. who

have dealt with specific Agencies in China. Drill down for the facts.

Don’t just look for big problems. Look for tainted histories.

 Sell your project, not your soul.

Agencies will often be interested in your future projects as well as your

current ones. Resist the temptation to discuss the future. You are not there

yet and you don’t know any more about tomorrow than you did yesterday.

Be honest to the extent of expressing your intent to be in the EB-5 business

for a long time to come.

Regardless of whether your business is EB-5 or mowing lawns, long-term

relationships are always built on trust and performance. Regardless of cultural

differences between Americans and Chinese, trust and performance are still the fundamental building blocks of a long-term relationship. Prove your

trustworthiness. Check theirs. Demonstrate your success. Investigate theirs.

Written contracts can certainly provide a sense of security regarding the term of

your business relationship, but they need to be enforceable. This is where

knowing Chinese emigration and U.S. immigration law and general business law

is important. The issue will not be the length of the contract; it will be whether

or not you choose to do business with a particular Agency.

No matter how we try, it still comes back to the money. Trying to determine

what is the right amount to pay for an Agency’s services is like Joe Average

trying to figure out what a new car is really worth compared to the sticker

price. He’s never going to find out, so capitalism comes into play. He buys

the car when the price gets to the point where he feels it is a good deal.

Frankly that, aside from due diligence, is probably the best you can expect

to do in trying to establish a relationship with a Chinese Agency.

Know ahead of time what you are willing to pay, then don’t budge from that

amount. Don’t do it. They will negotiate to get more, but do not budge. By

holding firm, you will demonstrate your integrity. They may not like it, but

you will soon discover which Agencies are interested in establishing a long

term relationship with you.

James  Harrington James Harrington, March 09, 2017 03:00 PM

Greg: Good article, pleased that someone is willing to speak his mind about the type of issues regional centers are confronted with when dealing with Chinese "Immigration Agents". My recommendation for dealing with this group is: don't. Regards, James Harrington, Esq..

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