Chinese nationals scrambling to get EB-5 visas amid fears
Prospective investors are already having trouble moving capital out of the country
As Congress debates raising the minimum investment from $500,000 to $1.35 million, potential investors in China are doing whatever they can to get their EB-5 visa applications in before the current program is set to expire April. 28.
Changes to the program would have an outsized impact on developers who rely on EB-5 funds for their projects.
“Any interruption of the program or reduction in Chinese participation would have a meaningful effect on a development cycle that is already showing signs of strain in certain key U.S. cities,” Michael Shaoul, CEO at Marketfield Asset Management, told Bloomberg.
One of the biggest obstacles is how to get $500,000 out of China as officials there have cracked down on outbound capital.
Shanghai resident Kevin Tai, an EB-5 investor in Extell Development’s Central Park Tower, used his home as collateral to get a $500,000 loan from Hong Kong’s Hang Seng Bank, which is an easier way to get cash rather than trying to get yuan over the border in large sums, according to Bloomberg.
That route is closed now.
A top EB-5 regional center told The Real Deal last month that an investment minimum of $1.35 million would effectively ice the program. “I think you would see as much as a 90-percent drop-off in demand,”said Angelique Brunner, a spokesperson for the EB-5 Investment Coalition.
On Monday, TRD detailed how many Chinese buyers in New York are taking out traditional mortgages to finance apartment buys.
- New York
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