Calling All Aliens
In 1991, when the U.S. Immigration and Naturalization Service introduced a program to reward foreigners who invest in small companies by granting them green cards, most people thought there would be a rush of activity. (To qualify, aliens must invest $1 million or more in a small company, or $500,000 in one located in a high-unemployment or rural area, for at least two years; the investment must generate 10 or more jobs.) Under the law, up to 10,000 such permanent-resident visas can be issued each year. To date, however, only about 1,000 companies have raised money in this manner. "It's been totally underutilized," says Paul Schmidt, a partner at Fragomen, Del Ray, and Bernsen in Washington, D.C.
While there are significant hurdles to identifying and negotiating with private investors oceans away (not the least of which is distance), Schmidt and other lawyers familiar with the program say there are smart things you can do to improve your chances of success:
Network strategically. If your first impulse is to hire a matchmaker or place advertisements in foreign newspapers, save your money, says Teri Simmons, who heads the immigration department at Arnall Golden & Gregory, in Atlanta. It's far better, she says, to network with foreign trade associations, economic-development officials, or ethnic business groups. Prospects you meet through them (who must document that their funds were earned legally) will probably be more valuable.
Define the opportunity. "To many people, a green card isn't worth $1 million," Schmidt maintains. So pitch the investment as an attractive business opportunity. A good start, offers Simmons, is to compose a one-page letter describing your business, the investment opportunity, and the terms you would consider. (It should always be translated into the language of the person you're trying to tap.) If that piques someone's interest, she says, send a more detailed business plan.
Show flexibility. Under the rules, the INS won't formally approve an investment until after it's been made. That can spook prospects who fear they'll lose their money. To reassure investors, Simmons suggests, set up an escrow account, which would allow them to get their money back. Recently, she negotiated a deal on behalf of an Asian investor so that his daughter was the person who got the green card. "Gifting is very big," Simmons says. -- Phaedra Hise