Investment Immigration China's richest people must choose carefully

Investment immigration Chinese rich people must choose carefully their investment immigration "Wall Street Journal" website article on March 19, original title: China's richest people should carefully choose U.S. investment immigration programs...

Johannes von Trapp is a member of the family depicted in the movie "The Sound of Music". He has spent the past year and a half trying to attract foreign investment into his ski lodge and winery in Vermont. He has flown to China three times to sell projects to hundreds of wealthy people. He often quoted the story of his parents' escape from Austria, and even reluctantly led a group of Beijing children in a performance of "Edelweiss." But the response to these efforts so far is that only five investors have invested $2.5 million, a far cry from his goal.

Obama has long championed the immigration program known as EB-5 as an engine for job creation. U.S. companies raised more than $1.8 billion through this program last fiscal year. Visas were granted to 7,641 people who wished to immigrate to the United States, 80% of whom were Chinese. But as von Trapp discovered, potential investors are becoming increasingly picky.

Since the financial crisis, countless American companies have used the EB-5 project to raise funds. The boom has been fueled by a surge in the number of Chinese looking to invest. Hundreds of Chinese immigration consulting companies help U.S. companies find investors and charge fees and commissions, which can reach up to US$175,000 per investor. (But) some projects did not provide enough employment opportunities, causing the US immigration agency to withhold green cards. There are also reports that some investment funds disappeared into bankrupt businesses or outright frauds.

The U.S. Securities and Exchange Commission said last month it filed the first lawsuit against the EB-5 project in Chicago federal court, claiming that a hotel and convention center project promoter fraudulently sold more than $145 million in securities and collected $11 million in administrative fees from more than 250 Chinese investors.

Questionable projects promoted by American businessmen with insufficient ability or integrity have made Chinese investors uneasy. Albert Young, who advises on EB-5 visas in Shanghai, said no one really understands the rules and many are willing to make false statements to attract investors. As far as he knows, some Chinese families have been deported back to their country because they did not have green cards.