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However, it is likely that the growing number of successfully
admitted Latin American immigrants under EB-5 will spur a
moderate increase in the flow of new applicants.
Focus on the larger countries
Scale is important to achieving the goals of an EB-5 marketing effort: Establishing a qualified network of immigration
consultants, licensed local security dealers and agents will be
time consuming. Furthermore, the high due diligence cost of
becoming familiar with the immigration, taxation, regulatory
and cultural aspects can only be justified in larger markets.
Brazil, the largest country in Latin America with more
than 200 million people and over 225,000 millionaires, is the
most attractive country in Latin America for projects trying
to raise EB-5 capital. In contrast with its fast GDP growth
of 7.5 percent in 2010, Brazil’s GDP has contracted in three
of the last four quarters. The looming challenges of recently
re-elected president Dilma Rousseff, including a rising trade
deficit, high inflation and a rise in extreme poverty, may result
in new attempts to micromanage the economy. This economic
uncertainty should produce a new wave of EB-5 applicants and
perhaps reverse the overall decline of Brazilian emigration to
the United States that began several years ago. Despite these
trends, the migration of wealth from Brazil will continue to be
dampened by the complexity and high costs of taking capital
out of the country.
Mexico, which has over 150,000 millionaires out of a population of 120 million, represents another large source for EB-5
candidates. With a more open economy that is highly linked
to the United States, the motivation to emigrate may reflect
safety concerns rather than an immediate preoccupation with
the economic outlook. The recent events surrounding the
disappearance and massacre of 43 students in Iguala, Guerrero,
involving organized crime and members of the local government
and police, has left President Enrique Pena Nieto with egg on
his face. This tragedy, together with other recent, high-profile
violent crimes, has provoked political discontent, including
demonstrations and public demands for Nieto’s resignation.
These events are a reminder of the frailty of the Mexican political system and present a strong argument for increased interest
in the EB-5 program among wealthy Mexicans.
Other countries with troubled economies, such as Argentina;
unpredictable political environments, such as Venezuela;
or growing and alarming crime rates, such as Honduras and
Guatemala, are examples of ready audiences that can be very
receptive to the prospect of immigrating to the United States.
Conclusion
Mass access to the wealthy in Latin America will remain
limited and time consuming. Security concerns and periodically
shifting economic conditions will continue to motivate the
wealthy in the region to consider immigrating to the United
States. By the same token, cultural and family ties, together
with the economic success of many of these economies, will
dampen the acceleration in the number of EB-5 applications.
Factors such as a local presence or strong relationships with
local partners, a good understanding of the local culture, a
recognizable brand and the availability of EB-5 projects in cities
well known to Latin Americans will be key factors in the success
of any EB-5 capital raising initiative in the region.
★
Milton Chacon
Milton Chacon is senior managing director at
Newmark Grubb Knight Frank and a securities
principal at BGC Partners. Mr. Chacon oversees
Newmark’s operations in Latin America and it’s
valuation and advisory division. Mr. Chacon is
also spearheading NGKF’s efforts to help clients
raise debt and equity in the EB-5 space.
Latin America seeking
Initiative
EB5 Investors Magazine is actively
to expand its attorney database to cover
Central and South America. We are
looking to list qualified Spanish and
Portuguese speaking attorneys and
consultants. Please contact us to be
listed in our upcoming directory.
Email info@eb5investors.com
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EB5 INVESTORS MAGAZINE