EB5 Investors Magazine Volume 5, Issue 2 - Page 14

economic problems in the two countries, and a resultant increase in crime rates, says Rogelio Caceres, co-founder of LCR Capital Partners, which sources 47 percent of its EB-5 investments from Latin America. “The biggest driver has been the unfortunate macroeconomic and security concerns these two countries have faced,” Caceres says. Brazil’s former president, Dilma Rousseff, was ousted in May 2016 for allegedly manipulating government accounts, and the country has since been hit by a second presidential corruption scandal, an economic downturn and soaring crime rates. Venezuela, meanwhile, has endured hyperinflation, a dramatic increase in violent crime and ongoing clashes between protesters and government security forces. Mexico, previously one of Latin America’s most important EB-5 players, accounted for only 57 visas in fiscal 2016, the country’s lowest tally since 2011. That’s a trend that could continue, Caceres says, with some Mexicans thinking twice about relocating to the U.S. in the wake of the 2016 election. “There’s been a Trump effect,” Caceres says. “There’s a strong sense of national pride and populism that’s affected business and immigration. We’ve seen a downturn in that country.” Other Latin American countries have historically contributed relatively few EB-5 investors, although last year both Argentina, with 36 approved visas, and Colombia, with 35 visas, contributed significantly more EB-5 investors than in previous years. 13 EB5 INVESTORS M AGAZINE SEEKING ALTERNATIVE MARKETS TO CHINA The surge in Latin American EB-5 activity is partly due to a shift in focus from EB-5 brokers and agents, who are seeking alternatives to the crowded Chinese marketplace, says Dennis Slater, principal of the Florida EB-5 Regional Center, which now sources more than a third of its capital from Latin America. “When China put the brakes on, they had to go somewhere, and Brazil and Venezuela were the most likely areas,” Slater says. “There’s a heavy concentration of marketing effort in Latin America right now.” So far, much of the outreach has focused on building awareness of EB-5 programs, which weren’t well-known in Latin America until recently, says Caceres. “Awareness is key,” he says. “You can’t grow a market without awareness, and there’s no existing agent network in these countries.” Agents and brokers have had to develop relationships not just with investors, but also with lawyers, tax specialists, and wealth-management consultants in the region. “It’s a lot of hard work, but it’s paid off quite substantially,” Caceres adds. It’s true that relationship-building is critical for EB-5 professionals looking to Latin American markets, says Rodrigo Azpúrua, the Venezuelan-born CEO of Riviera Point Development Group, a south Florida EB-5 developer. “South America is about people,” Azpúrua says. “Building that relationship and word-of-mouth is the key to growing