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How to facilitate EB-5 funds transfers for Vietnamese investors

As we have seen previously, investors who have the necessary capital can make their way to permanent residence in the United States through the EB-5 Program. And in this context, Vietnam is among the countries with the most interest in this method of obtaining a Green Card, but there are some complexities that we will analyze in the article.

In relation to the EB-5 Program and obtaining Green Cards under this method, one area that has always been a problem for Vietnamese investors – especially with the larger investment amounts – is remittances, or profits that investors send to your country of origin.

With this, the challenges in transferring investment funds from Vietnam to the US have increased, mainly due to currency exchange and transfer restrictions.

“While Vietnam has always been one of the largest EB-5 markets, it is well understood that there are a number of banking and currency restrictions that need to be navigated carefully,” said Phuong Le, partner at KLD LLP.

Vietnamese law regulates the export of its currency abroad. But investors generally transfer funds through lending institutions and must show evidence of deposits for their EB-5 petition. And a lending institution requires an affidavit stating that the funds were transferred from the Vietnam investor to the EB-5 investment in the US.

Jennifer Hermansky, a shareholder in Greenberg Traurig, LLP, said investors should always discuss options with their local advisors in Vietnam. In addition, he explained that many investors have been able to use currency transfer agents in Singapore and Australia, or family members to help transfer funds.

“It is very important that the EB-5 petition contain a clear trail of the funds and a clear explanation of the transfer methods,” Hermansky said. “USCIS must be able to determine that the same funds that were legally obtained are the same funds transferred to the US.”

Challenges and Solutions for Vietnamese EB-5 Funds Transfers

EB5 United’s Brennan Sim acknowledged that transferring funds from Vietnam for his projects has always been a challenge. This is because they have had difficulties transferring money directly to the project’s escrow accounts.

“To overcome this, we have found that the most effective solution is to open US bank accounts for our investors,” Sim said. “In this way, investors can transfer funds to the US account and then transfer them to the project’s escrow account. This approach has succeeded in streamlining the transfer process and ensuring that the funds reach their intended destination.”

Phuong Le, for his part, explained that when they work with their investors, the three problems they encounter center around liquidity, currency restrictions, and an ongoing anti-corruption campaign.

In this sense, he expressed that Vietnam is currently involved in a conflict against corruption where politicians and businessmen are imprisoned and stripped of their assets, which has caused the urgency to solve these problems.

“Although real estate had been through the roof, what we see now is difficulty applying for loans to sell a house or finance an EB-5 investment,” Phuong Le said. “We see rates crawling north of 14% or 16%. This stifles the ability of many people to easily sell a home or borrow enough funds to make an investment of over $800K.”

In addition, Phuong Le assured that they cannot transfer funds as banks tighten transfers due to “increased regulatory scrutiny due to anti-corruption purge and KYC/compliance issues.”

RIA Impact on EB-5 Investments

As we saw in another article, the EB-5 Integrity and Reform Act of 2002, which was re-enacted in March 2022, brought with it several changes to the EB-5 visa program.

“Under the RIA, the issue of the routing of funds and the transfer of funds is front and center; It clearly states that an investor must identify the persons involved who are responsible for transferring or exchanging an investor’s funds,” Phuong Le said.

For his part, Hermansky revealed that the RIA requires that all third parties that assist in the transfer of funds be identified and that the new USCIS forms also have that requirement.

“USCIS has been more stringent in reviewing currency transfer methods,” Hermansky said. “It is very important that the EB-5 petition contain a clear trail of the funds and a clear explanation of the transfer methods so that USCIS can evaluate the same legally earned funds that were transferred to the US.”

While the RIA has created more hurdles in the EB-5 process, Brennan Sim says it doesn’t appear to have an impact on foreign wire transfers.

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