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Mexican Investment in America

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Mexicans investing in America

Premium content from Austin Business Journal by Cody Lyon, Staff writer

Date: Friday, October 21, 2011, 5:00am CDT

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Cody Lyon
Staff writer – Austin Business Journal
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The call came into Texas Franchise Connection not long ago. On the other end was a 19-year-old young man from Mexico who needed to invest $5 million of his family’s money in America before he turned 21.

If he can find a restaurant or retail franchise that suits him — and there are many having trouble finding franchisees with capital — the EB-Investment Visa program could allow him to become a permanent resident relatively easily.

It’s exactly the scenario Austin-based Texas Franchise Connection is counting on happening more in the future. The company is trying to excel in steering Mexican investment money toward American franchises and real estate.

Permanent residence is possible for commercial enterprise investors if the enterprise benefits the U.S. economy, according to the U.S. Department of Citizenship and Immigration Services. The minimum investment is $1 million, and 10 jobs must be created. That amount falls to $500,000 if the investment is made in a rural area or an area with high unemployment.

As of August, the Department of Citizenship and Immigration Services estimates the EB-5 program has created 41,070 jobs and $2.1 billion of capital nationwide since its 1990 inception, said Timothy Counts, a department spokesman.

Franchisor Bill Roberts, owner of Texas Family Wings LLC in Pleasanton, hopes some of that capital finds its way to his company.

He recently bought the Texas development rights to Hurricane Grill and Wings, a 65-unit family sports bar and grill based in Florida, and wants to grow the chain quickly here.

Despite the supposed availability of Mexican cash, Roberts has yet to firm up commitments. Still, he has faith that groups such as Texas Franchise Connection will guide investors and franchisees to his business.

“There is a severe disconnect between investors and the opportunity [because Mexican] investors have had to keep under the radar screen in order to not become a target of violence and corruption in Mexico,” said Greg Stanislawski at Texas Franchise Connection.

He said it is almost impossible to approach individuals directly, that his company had to foster relationships with allies to be deemed a reliable source for investment opportunity here and across the state.

Despite the sensitivity, some said the capital has tremendous promise in Texas.

“We have the largest population, favorable job growth, dynamic opportunity, but there’s one problem: Banks aren’t providing any capital,” said Bob Honts, owner and manager of Texas Lone Star Enterprises LLC, an EB-5 center in Austin approved by the Department of Homeland Security to serve the entire state.

His government-affiliated organization said it has EB-5 investment opportunity in varied industries, including assisted living facilities, hotels, housing developments, and hospitality and tourism.

Beyond any flow of capital, some experts compare the exodus of wealthy Mexicans to migrations of the past.

“When Castro said this would be a new Havana, that turned out to be Miami,” said John Butler, professor at the University of Texas’ McCombs School of Business and president of the IC2Institute.

Butler also teaches an MBA program in Mexico City. One day, a student showed up with two business ideas and about $6 million in worth.

“She picked up and left, moved, bought a house in Austin,” Butler said.

Obtaining one of 10,000 EB-5 visas issued annually usually takes about eight months.

That’s relatively quick, but calls are being made to streamline it even more because developers and other business professionals work on shorter time lines.

“There is a tremendous amount of capital out of Mexico looking for business opportunity in the United States,” said Mehron Azarmehr, an Austin-based immigration lawyer who has had an office in Monterrey, Mexico, since 1990. “I’d estimate around 90 percent of that capital is looking at Texas.”

Once a month, he crosses over and gives special EB investment visa presentations at the Club Industrial in Monterrey, counseling wealthy individuals and families about opportunities in Texas.

Much of the impetus for investing in America stems from the violence feared by wealthy Mexicans, he said.

“It’s gotten to the point that it’s not safe to succeed in business in Mexico,” said Nayeli Gallegos, director of economic development programs at the Greater Austin Hispanic Chamber of Commerce.

The chamber has set up a program offering education on immigration laws and tax strategies, and information on business incubators in Austin.

“When we get questions about investment opportunity, we give them a list of Austin chamber members who are looking for investors,” Gallegos said.

Meanwhile, Azarmehr marvels at the shift in immigration patterns from Mexico.

“Traditionally, it was the workers looking to move here,” he said. “Now, it’s the ruling class.”

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Written by codylyonreporter

January 28, 2012 at 1:17 am

Posted in Uncategorized

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