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Growing SA demand for US visas: Here’s what you need to know
JOHANNESBURG — There’s surging demand from South Africans for the United States’ EB-5 immigrant investor programme. This is according to Stuart Ferguson who is the CEO of American Dream – a business that helps secure US visas for families from countries such as South Africa and even the United Arab Emirates. It’s no surprise that many South Africans are looking for a plan B. Daily revelations of corruption and concerns over the South African economy have generally sparked an exodus among many locals. In this interview then, Ferguson explains the ins and outs of the EB-5 immigrant investor programme. – Gareth van Zyl
It’s a pleasure to welcome Stuart Ferguson, who is the CEO of American Dream. Stuart, thank you for joining me on the podcast.
Excellent, thank you very much, much appreciated.
Your organisation helps investors participate in something called the American Dream EB-5 immigrant investor programme. Can you tell us a bit more about this programme and where your organisation fits in?
We’ve been actively promoting the EB-5 investment visa program into SA since the early 1990s. To date, we have directly assisted in the region of about 300 SA families that have sought immigration and/or alternative residency aspects into the US. Our success rate, to date, is 100%. So, we do a lot of due diligence on potential investors that are seeking to enter the US through the EB-5 program.
Just in terms of background – we actually got involved in the EB-5 investment arena by default. In the early 1980s we had externalised a fair amount of money into the US economy. Then in the late 1980s we were buying up large tracts of land, developing them for income streams. Then during the sub-prime crisis, there was no availability of finance. That is really where we happened to get to know the EB-5 program and the merits that it had attached to it.
In a nutshell, the EB-5 is an investment visa route. It certainly is the easiest guaranteed mechanism for a person that is seeking a Green Card or an alternative residency (a plan-B) into the US. There really are two criteria. One, you have to meet the basic eligibility test, and that eligibility test is that you need to be of good standing. You cannot have any major felonies against your personal name. Secondly, you have to have the ability and liquidity to be able to invest — currently a minimum of $500,000 into a specific project. These projects go through rigorous due diligence by both the US immigration department, as well as by the SEC, the Securities and Exchange Commission.
It’s a very highly regulated industry in the US and, certainly, there’s a lot of due diligence that takes place. But for every $500,000 transfer that we receive, we’ve got to be deemed to be to be creating, indirectly, ten American jobs. Typically, we are in either new construction, greenfield projects, or we are in the process of doing a refurbishment of a project, which is where the majority of the job creation takes place. That’s really the two eligibility criteria. So, largely the source of funds is crucial and, secondly, you need to be of good standing.
So, when you say that you need a sufficient source of funds, can you unpack that for us as well? What does that entail exactly?
Yes, in terms of SEC regulations you have to be what’s known as a sophisticated investor, and there are certain criteria. Generally what happens is when somebody is inward bound, they make an enquiry with us, we will send them a questionnaire and that questionnaire unpacks the various eligibility criteria from a financial means. You have to be a high net worth individual. You have to understand the risk components, because there are no guarantees. Unfortunately, we can’t offer any forms of guarantees as that’s a major violation of securities law. You need to understand and unpack the actual investments. We spend a lot of time with our investors so that they specifically understand the nature and type of investment that they’re making so that they clearly understand what the immigration timelines will be and then, thirdly, so that they clearly understand at what point they are eligible for a redemption and payment of their original capital into those projects.
Ultimately, as you say, there’s the opportunity to become a US citizen.
Yes, that is one of the guarantees that we have in all our legal offering documents. If we do not get an investor to the finish line, or to the approval stage where they have been approved for immigrant status and have got their Green Cards in their hands, then their money is fully refundable. To date that has not happened to us because we do a lot of due diligence on inward bound investors. If we don’t believe they’re going to get to that finish line, then there’s no point in us frustrating themselves or ourselves, where we’re raising CapEx for our various projects through the EB-5 investment visa programme. Getting to the finish line is guaranteed.
How many South Africans have taken part in this programme and are you seeing more demand from South Africans?
Yes, to date we’ve assisted over 300 SA families but at the moment, we’re experiencing exceptionally high volumes: on average, we see between six and seven qualified enquiries a day. But from a web activation aspect, we are inundated with web enquiries, on a daily basis. I would also just like to mention that we are not just localised here, in SA. When we launched the EB-5 we saw its popularity in China, so we have office representation in Beijing and Shanghai. Then we have an extensive broker network in the UAE, where we are finding there’s increased demand, both from the UAE and from India. Then we’ve got some satellite operations in South America. It’s a very big business for us and obviously, we raise a lot of CapEx for various projects in and around the US, through this programme.
So you are very much a global business then?
Absolutely, the world and individuals are desperately wanting to become global citizens. So, there’s a huge demand and naturally, whilst I’m biased, immigration or having access to the US without a doubt at the moment is most probably one of the more popular places that people from around the world are seeking to get into.
So, a lot of people will be listening to this and saying to themselves, but there’s a president in the White House at the moment who has been quite anti-immigration. Will that affect the EB-5 program in any way in the future? Or does that programme just continue regardless of whoever is in charge?
An interesting question and, in fact, we’ve seen a surge of enquiries since Trump came into power just because, obviously, he’s going to be overhauling immigration quite comprehensively. Do we see Trump as a potential pitfall or negative impact in respect of EB-5 going forward? No, we don’t. We are expecting an overhaul of the EB-5 program. It’s been on the cards; it’s been before Congress for a long period of time. I think one of the most important issues in relation to EB-5 is that by virtue of its popularity, they are going to be increasing the investment threshold. So, currently, the investment is $500 000 if you’re investing within what’s known as a TEA (Target Employment Area). But we’re anticipating that that investment threshold will be increased to close to a $1m. That’s really because they’re wanting to attract more sophisticated investors who are going to contribute more aggressively to the American economy and who are going to create more jobs for Americans. We are anticipating an overhaul of the programme, but EB-5 will always be in existence. The Trump family themselves have secured historically, in the past, a large number of EB-5 investors into some of the developments that they were responsible for.
So, for those listening to this podcast, who are possibly interested in this programme and finding out more, what is your advice for them to get started with this?
To get started you can reach out and make an enquiry to us. There are no upfront fees involved. I have a dedicated team that are based here, in SA. Typically what would happen is if somebody is remotely interested, they would reach out and make contact with us. We would send them a very basic questionnaire just to check that from an eligibility aspect, that they’re going to meet the minimum criteria. Thereafter, we will schedule a call with myself, just to talk through the very basics in relation to EB-5. We then schedule a call with an immigration attorney, who is based in the US, and we have a whole host of immigration attorneys. We don’t work exclusively with any one immigration attorney. We’ve got immigration attorneys scattered all over the US. We typically will schedule a conference call so that they can, once again, have reconfirmation about exactly what the dynamics are related to an EB-5 process and the timelines.
Then we will generally go into a one-on-one and I spend a fair amount of time engaging with that investor and really making them understand exactly what it is they’re investing in. Bearing in mind, we utilise EB-5 as an emotive aspect to engage with high net worth individuals here. And whilst obtaining a Green Card and eventual citizenship is objective number-one, typically have nurtured a relationship with these investors over a period of time, where they become very close friends. There are a lot of other property transactions that we do in the US that are non-EB5 related. So, we really are looking to nurture a very close relationship and a very close investor relationship with potential people that are seeking access to the US.
Just finally, Stuart, if anybody wants to get in touch with you and your team, what is the best way to go about doing that?
The best way would be to make a direct enquiry onto our website. Our website address is www.americandream-eb5.com and then a for a direct and immediate response from one of my team members, you can email [email protected]–eb5.com and our turnaround time in respect of responses is pretty quick.
Stuart Ferguson, thank you so much for telling us about the EB-5 program and its ins and outs.
Perfect, I really appreciate it and many thanks once again.
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