The modernization of the Chinese economy has created unprecedented number of wealthy individuals. Many are them are interested in immigrating to other countries especially the United States for educational, business, and other opportunities.
For a foreign investor to participate in the U.S. EB-5 immigrant visa program, he or she must invest either US$500,000 or $1,000,000 in a U.S. enterprise and create 10 full-time job opportunities. However, the Chinese government has a $50,000 annual limitation on currency transfers on its citizens. Traditionally, to invest in the U.S. EB-5 program, a Chinese investor would ask 10 or 20 friends to each receive and convert the Chinese equivalent of US$50,000 or $1,000,000, and then transfer the funds to a bank outside of China. The funds would then be grouped together again outside of China before they are invested in either an EB-5 Regional Center or direct investment program.
However, this process of funneling funds outside of China has proven to be quite complicated and inconvenient; also, it is not always easy to find "friends" to act as conduit to transfer money for foreign investments. As a response to this situation, some Chinese national banks started some pilot “youhuitong” programs which would allow unlimited transfers of funds to overseas in a single transaction. The bank usually charges a certain percentage of the total remittance as processing fee. The bank also profits from the fluctuations of the foreign current exchange rates. Because of the convenience of this type of youhuitong programs, they have quickly become very popular among EB-5 investors.
On July 10, 2014 the official state broadcasting TV channel in China, the China Central Television network (CCTV), recently issued a report on these "youhuitong" money transfer programs, accusing some banks of acting inappropriately in providing services to help wealthy Chinese citizens to convert large sums of currency and transfer them abroad to invest in the U.S. EB-5 investor immigration program. Although the report has been withdrawn since then, the banks have temporarily suspended the youhuitong unlimited-transfer programs.
Some U.S. and overseas commentators and media speculate that the CCTV report was politically motivated. Because of the demand for the EB-5 investment visas has been on the rise in recent years, it is possible that this type of "youhuitong" programs will re-surface again later on to facilitate investors to transfer funds to overseas countries for investment purposes.
For a foreign investor to participate in the U.S. EB-5 immigrant visa program, he or she must invest either US$500,000 or $1,000,000 in a U.S. enterprise and create 10 full-time job opportunities. However, the Chinese government has a $50,000 annual limitation on currency transfers on its citizens. Traditionally, to invest in the U.S. EB-5 program, a Chinese investor would ask 10 or 20 friends to each receive and convert the Chinese equivalent of US$50,000 or $1,000,000, and then transfer the funds to a bank outside of China. The funds would then be grouped together again outside of China before they are invested in either an EB-5 Regional Center or direct investment program.
However, this process of funneling funds outside of China has proven to be quite complicated and inconvenient; also, it is not always easy to find "friends" to act as conduit to transfer money for foreign investments. As a response to this situation, some Chinese national banks started some pilot “youhuitong” programs which would allow unlimited transfers of funds to overseas in a single transaction. The bank usually charges a certain percentage of the total remittance as processing fee. The bank also profits from the fluctuations of the foreign current exchange rates. Because of the convenience of this type of youhuitong programs, they have quickly become very popular among EB-5 investors.
On July 10, 2014 the official state broadcasting TV channel in China, the China Central Television network (CCTV), recently issued a report on these "youhuitong" money transfer programs, accusing some banks of acting inappropriately in providing services to help wealthy Chinese citizens to convert large sums of currency and transfer them abroad to invest in the U.S. EB-5 investor immigration program. Although the report has been withdrawn since then, the banks have temporarily suspended the youhuitong unlimited-transfer programs.
Some U.S. and overseas commentators and media speculate that the CCTV report was politically motivated. Because of the demand for the EB-5 investment visas has been on the rise in recent years, it is possible that this type of "youhuitong" programs will re-surface again later on to facilitate investors to transfer funds to overseas countries for investment purposes.
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