Foreigners Invest Greenbacks in Return for Green Cards
Saturday, December 8, 2007
At a recent conference in Rockville, where Chinese business owners mingled with local entrepreneurs, Timothy Milbrath stood out.
Wearing rainbow Mardi Gras beads, the gregarious retired Air Force colonel was herding conference-goers to his trade-fair booth to deliver an unusual pitch: invest in his fund to rebuild New Orleans and get a green card in return.
"So many of our immigration policies don't make sense, but this does," said Milbrath, co-founder of NobleOutReach.
Through a little-known visa program that connects international fortunes to depressed economies around the country, Gaithersburg-based NobleOutReach has set out to rebuild parts of New Orleans through investments from wealthy foreigners seeking a gateway for immigration.
The visa program, known as the EB-5 immigrant investor pilot program, is a relatively small one. It reserves 3,000 visas a year for foreign investors who put at least $500,000 into one of 17 projects around the country, all designed to stimulate troubled local economies. One project involves a dairy-farming business in South Dakota, another an ethanol production plant in Texas. There's a project focusing on tourism, technology and trade in Pittsburgh and another that centers on professional business service companies in Milwaukee.
In exchange for their investments, the foreigners receive whatever dividends result from the projects and green cards for their immediate family.
In NobleOutReach's program, which began last spring, money raised by immigrant investors will be used to develop office buildings, hotels, restaurants and medical clinics in New Orleans. So far, the fund has attracted about 50 investors from South Korea, China, Britain and the Middle East, according to the company. Nothing has been built, but with a 30-year contract with the city of New Orleans, NobleOutReach hopes to invest about $100 million in projects that it says could create thousands of jobs.
During the recent get-together in Montgomery County, local business leader Duc Duong was among many who stopped by NobleOutReach's booth to hear about details of the visa program. He was joined by Ying Chen, a real estate agent with Long & Foster, who talked to Milbrath about introducing her investor contacts from China to the fund. Once they were here, she figured, she would try to sell them houses.
"There are many, many people in China with wealth. The problem is that they don't have the quality of life that they want in China, particularly with education for their children," said Duong, who serves as the local chairman of an Asian American technology business group known as Monte Jade.
The EB-5 pilot visa program grew from a program that critics called the "million-dollar visa," because it granted permanent residency in return for $1 million in direct business investments. The U.S. Citizenship and Immigration Services restructured the program in 2002 after problems arose with fraud and abuse by investors. Under a pilot effort, investors no longer have to serve as day-to-day managers of the projects. The revamped program operates more like a mutual fund and leaves managing the work to others. The pilot offers immigrants the same green-card benefits for half the investment, and the money is directed into regional centers, such as New Orleans. As under the old program, each investment must create 10 local jobs.
"After the problems of the program in the late 1990s, the program grew into disfavor by immigration lawyers and investors. But now with new revisions and regional centers, it makes much more sense and is stirring more attention," said Raj Singh, an immigration attorney in Rockville who is helping a client from Pakistan with large real estate holdings in Dubai apply for the pilot program.
In fiscal year 2007, which ended in September, 779 people applied for the visa program, double the 389 who applied in 2006. The greatest number of investors have come from South Korea, China, and Britain.