Sam Silverman, Managing Partner of EB5AN, was interviewed by The Wire China last month and was quoted in an article featuring EB5AN’s Twin Lakes Georgia rural EB-5 loan project.
The article details the rise in Chinese demand for the EB-5 program since the passage of the EB-5 Reform and Integrity Act of 2022. The bill created new set-aside visa categories for rural and high unemployment targeted employment areas (TEAs), as well as public infrastructure projects.
A Rise in Chinese EB-5 Demand
In The Wire China, Silverman explained, “The new categories present a once-in-thirty-year opportunity,” for Chinese investors. “For the last five years, there was minimal demand [from Chinese investors]. Now, it is bouncing back.”
Chinese interest fueled a surge in demand for EB-5 visas in the 2010s. By 2016, Chinese nationals made up 83 percent of all EB-5 petitions.
However, each country is only allotted up to 7% of the 10,000 EB-5 visas available worldwide every year. The overwhelming demand for EB-5 visas among Chinese nationals led to a massive backlog, with wait times previously stretching to over a decade.
By 2021, Chinese demand had fallen precipitously, with only 4 percent of EB-5 petitions belonging to Chinese applicants.
The new visa set-aside categories allow Chinese investors to bypass the notorious EB-5 visa backlog affecting mainland Chinese nationals. Since the passage of the Reform and Integrity Act, Chinese interest in the EB-5 program has tripled.
Factors Impacting Chinese Investors
The Wire China article also detailed some of the fraudulent activities and “EB-5 disasters” plaguing the EB-5 program over the years. One of the most notorious cases involved a never-built 42-story skyscraper in Chicago that defrauded Chinese EB-5 investors of more than $50 million.
Douglas Litowitz, the lawyer representing the Chinese investors in the case, said the EB-5 program “is set up where you put all this money in the hands of greedy developers. The Chinese put in the money, then it gets loaned out, and the money is gone.”
Cases such as this prompted Congress to pass the EB-5 Reform and Integrity Act, which restarted the regional center program, created the TEA set-aside categories, and requires greater scrutiny and compliance of all involved in the EB-5 program— investors, project developers, and regional center managers alike.
The new visa categories aren’t the only driving factor in the surge of Chinese interest in the EB-5 program. The Wire China quotes other EB-5 industry lawyers and experts as noticing the COVID-19 lockdown in China as a motivating factor for many of their Chinese clients.
Kristin Surak, an associate professor at the London School of Economics, says that “Covid changed the long-term calculation” for Chinese nationals, worried about future lockdowns. “If there is another global pandemic, they want a place to live for six months.”
“Run philosophy”, has been trending on Chinese social media among those seeking to leave the country in response to the severe pandemic restrictions in China.
Waning Opportunities for Immigration
Despite growing political tensions between China and the United States, industry experts have noted that Chinese interest in U.S. immigration is actually increasing.
In addition to the three-fold increase in EB-5 interest, in recent months, more than 4,000 low-income Chinese nationals unable to afford EB-5 visas have been caught trying to illegally immigrate to the United States across the Mexican border.
The Wire China article also noted a global fall in visa-by-investment immigration programs as another factor influencing the rise in Chinese interest in the United States’ EB-5 program.
Europe in particular has seen a backlash against immigrant investor programs in recent years. The UK closed their Tier I investor visa in 2022, citing security concerns. Ireland announced the closure of their Immigrant Investor Program in February 2023, even with 1,500 cases still awaiting processing, many of whom were Chinese investors.
Chinese Investors and Twin Lakes Rural EB-5 Loan Project
With regards to Kolter Homes’ Twin Lakes Georgia development, EB5AN Managing Partner Sam Silverman is also quoted in The Wire China saying he expects approximately half of the EB-5 investors for the $650 million Georgia project to come from China.
Twin Lakes is a 1,300-home real estate development for active adults over 55, located in a rural targeted employment area (TEA) outside the Atlanta metro area. Twin Lakes is already the number one best-selling new home development in the state of Georgia. All required EB-5 jobs have already been created.
Kolter Homes, the builder of Twin Lakes, is one of the nation’s largest and most trusted home builders, with a market valuation of over $24 billion. Kolter has never missed a repayment since its inception, securing and repaying more billions in loans from nationwide banks such as Wells Fargo, Regions, and CIBC.
Learn more about Silverman’s take on the new visa categories for Chinese nationals, as well as EB5AN’s new Twin Lakes rural EB-5 project, in The Wire China.
For more information on how to get involved in EB5AN’s Twin Lakes rural EB-5 loan project at Twin Lakes, schedule your free consultation with Managing Partner Sam Silverman today.