David began practicing law in South Africa in 1970 before
immigrating to the United States with his wife and two young
children, where he took the California bar in 1979. David has
been active in EB-5 since its inception in 1990 and was in the
U.S. Senate meeting where the EB-5 legislation was proposed
and debated by Senators Kennedy and Biden.
He subsequently filed one of the first EB-5 cases in history by
meeting with the client in Taiwan and teaching the consular
office about the new law. Today, his firm represents high-networth clients, including Fortune 500 companies and mid and
small cap companies, startups, actors, performers, athletes,
engineers and pharmacists seeking visas and green cards. His
own practice concentrates on EB-5 cases of all types, assisted by
his EB-5 team of about 20 people.
Given his history and expertise, we wanted to ask David a few
questions to get an expert’s insight into the EB-5 Program.
EB5 Investors Magazine Staff: We would like
to ask you about recent challenges facing the EB-5 Program,
especially the recent Chicago case.
David Hirson: It is an unfortunate situation where, according to the allegations, the people behind the program made
serious misrepresentations. USCIS works very closely with the
SEC, and as a result, SEC froze all the accounts of the business,
as well as those of the individuals.
STAFF: How do you think this will affect the program overall?
DAVID: It has already had a chilling effect on some of the
investors as they no longer have the same level of confidence in
the system. They should have confidence because there are very
good programs that have great track records, and even some new
ones which are very, very strong, and it will be a matter of time
before confidence in a country like China is restored to prospective investors. However, investors have not stopped investing
under the program. They are just asking more questions.
EIM: Where do you see the program being in five years?
DH: I see it expanding, thriving, reaching the quota, and
succeeding in getting Congress to increase the 10,000 quota
number sometime in the near future
STAFF: Can you please address the potential cap on Chinese
visas?
DAVID: The EB-5 visa category allocates 10,000 visas in each
government fiscal year, commencing Oct. 1 and ending on Sept.
30. Of these 10,000 visas available, no single country may get
more than seven percent of the total visas. As a result of the low
numbers from other countries, the U.S. Department of State
has allocated almost 6,000 visas to Chinese nationals. Please
bear in mind that each qualified family member, in addition to
the principal investor, takes up one visa.
fiscal year ending on Sept. 30, 2013. This warning was subsequently revised so that it is unlikely that China will reach the
cap in the 2013 fiscal year. However, DOS predicts that China
will probably reach its cap in the 2014 fiscal year. This could
mean, in a worst-case scenario, that 700 visas will be available
to China. I am of the opinion that given the history of the allocation of visa numbers, this is an extremely unlikely outcome.
Therefore, an estimate is that China will be able to receive approximately 6,000 visas in 2014. This figure will increase if the
number of visas from other countries remains low.
STAFF: What are the biggest challenges facing investors?
DAVID: Some of the biggest challenges facing investors include:
• Proving the lawful source of funds
• Concern as to the sustainability and viability
of the project so that the conditional residence
can be converted into permanent residence
• Ensuring that the project completes what
is shown in the Business Plan
• Taxation of the worldwide income of green card holders
• The amount of time the investor and/or the investor’s
family must remain in the United States to preserve the
residence status and not be deemed to have abandoned
this status. This issue is usually alleviated by obtaining a
re-entry permit for a two year validity period, allowing
the investor and/or the investor’s family to remain
outside of the United States for up to two years.
STAFF: