Interviewer: Well, now moving on to rich folks, and some of the challenges that they might face. South Africans with at least about $500,000 to spare can now immigrate, open businesses and/or send their children to Ivy League universities of the United States. All this by investing in the Dunkin Donuts franchise via LCR Capital. Rogelio Caceres, LCR Capital’s Co-Founder joins me now to tell us more about this. Rogelio, thank you so much for your time today.
Rogelio: Good morning.
Interviewer: Explain to us how exactly this fund works, 500,000 capital injection into Dunkin Donuts and I get a green card.
Rogelio: Yes. Well, it’s part of the program called the EB-5 Investment Visa program. The program has been around since 1990 and since then, hundreds of thousands of investors from all over the world have obtained US residency by creating jobs in America. This simply put, it’s the fastest and simplest way to get a green card.
Interviewer: Well, you do need a significant amount of capital to work with. But what are the terms and conditions here because it’s certainly not just handing over this money and then expecting things to work out perfectly over a long term?
Rogelio: Absolutely. It’s a $500,000 investment into a new American business. If that investment creates and sustains 10 American jobs, the investor, his or her spouse and any children up to the age of 21, all obtain green cards. Also, the investors globally invest through regional centers, firms like ours that have the federal license to operate in this industry, and what we’ve done is transformed this relatively unknown immigration program into a standardized financial investment vehicle. In our case, we pull that capital together into geographically-focused investment funds that lend capital to partially finance the building of new Dunkin Donut stores around the United States.
Interviewer: What are the lead times that we’re talking about here? So timeframes that might be allocated.
Rogelio: Right now, according to USCI estimates, which is the immigration service in the US, from the moment of investment to the moment of obtaining a green card is around 18 months. Our investment funds are five-year funds, so the typical investor will make his capital injection into our fund, whether it’s a Florida-based fund, or a Texas-based fund, await the 18-month timeline and then obtain their green cards and be able to move freely to the US, enjoy all the benefits of the green card and what the green card that provides.
Interviewer: Is the safe fund that’s unique to South African investors or open to other peers on the continent and, more importantly, what’s the comparison being like with some of our global counterparts?
Rogelio: Well, the program has been around since 1990, like I mentioned, but it’s been relatively unknown but starting in 2009 after the global financial crisis has really when it exploded in growth. From a base of about 300 investors, sorry, $300 million of capital to now over $7 billion of capital each year flowing into the US through this program, primarily it has been a China-focused program.
Most of our peers have been focused in the China market and LCR is one of the few that saw opportunities elsewhere. In countries like Brazil, countries like India, now South Africa, to really introduce this proven immigration option to the country to be able to explore and obtain residency through it.
Interviewer: Would this be open to investors elsewhere on the continent too, Nigeria, perhaps another frontier markets on the continent?
Rogelio: Absolutely. The requirements are very simple and straightforward. There’s five requirements. $500,000 investment into a new American business. The money must be of legal origin. The background check on each investor to ensure that they have not committed any terrorist acts and things of that nature. It must be an at-risk investment so it cannot be in government bonds or things of… that had that guaranteed end. It must create those jobs. It is a job investment program.
Interviewer: Rogelio, for some viewers, perhaps this sounds a bit too easy and they might be scratching their heads wondering if Trump does come into power in the next elections, you know, could this be influenced or changed from a policy and regulation perspective?
Rogelio: Well, in Washington, politicians, Republicans and Democrats rarely agree on much typically in Washington, but this program has broad bipartisan support. It’s being reauthorized by seven presidents since its inception and last time it was up for reauthorization, 100 senators to zero voted to reauthorize it. So it’s a quite popular program. It brings foreign direct investment to create American jobs. It brings the best and brightest from many parts of the world and we think there’s a great opportunity to introduce it here and we’ll be hosting seminars around the country, including here in Johannesburg, in Cape Town and Durban at the office of Grant Thornton. So if folks are interested in learning about it, we’d be more than happy to introduce it to them.
Interviewer: Key question, if investors do decide to divest and remove their capital from this particular fund, what are the consequences? Losing the green card perhaps?
Rogelio: No, there’s one condition on whether or not this green card is a permanent green card and that is, does it create those American jobs? Once the capital comes back, typically in year five, that capital can be used as they see fit.
Interviewer: And I take it, there’s a website as well for further details because it’s quite an interesting proposal you have on the table.
Rogelio: Yes, I’m happy to plug it. It’s greencards.co.za. And happy to meet with folks that are interested in learning more about the program.
Interviewer: Thank you so much for your time today, Rogelio.
Rogelio: Thank you very much.
Interviewer: A pleasure speaking to you and providing alternatives, say, instead of having to find someone to marry you in the US, he has an alternative on the table. That was Rogelio Caceres who’s the Co-Founder of LCR Capital Partners and giving us perspective there on the investment opportunities also available in the US. But that’s how we wrap up our view of Power Lunch for today here with a South African focus. You can get a quick update on many of our interviews on our websites, cnbcafrica.com coupled with additional business and financial news. But stay tuned. When we come back from the break, we take a look at what’s happening on the West African markets on Power Lunch West Africa.