EB-5 Uncategorized

EB-5 Updated Investment Cost

The EB-5 Reform and Integrity Act also lays out changes to the EB-5 investment cost.
The new cost is effective March 15, 2022, and will be adjusted by inflation every 5 years based on the Consumer Price Index for All Urban Consumers (CPI-U).

Investment TypeBeforeAfter
Minimum Investment$1,000,000$1,050,000
Targeted Employment Area Investment Amount$500,000$800,000
High Employment Area Investment Amount$1,000,000N/A

These values are given in US Dollars.

A Target Employment Area is either (at time of investment):

  1. A rural area, or
  2. A high unemployment area.

Source: USCIS

Estate and Trust News Uncategorized

Tax Planning I: Charitable Remainder Trusts

With the Biden administration in power, an increase in taxes may be coming fast. The impact may be on many areas, for example, income tax, capital gain, estate tax, etc. Therefore, proper planning is more relevant than ever. This series reviews some common tax deferral strategies. One such strategy available in many states, including Ohio, is the charitable remainder trust.

In essence, a charitable remainder trust (“CRT”) is a trust that is funded by an individual (“donor”) during life. The CRT makes distributions to a non-charitable beneficiary, which can be the donor or the spouse, for life or a term up to 20 years. After that, any remaining property may pass to one or more charities. The tax benefit is that when you fund the trust, you can claim a charitable income tax deduction equal to the present value of the remainder interest (subject to applicable limits on charitable deductions). Your annual payouts from the trust can be based on a fixed percentage of the trust’s initial value — known as a charitable remainder annuity trust (CRAT). Or they can be based on a fixed percentage of the trust’s value recalculated annually — known as a charitable remainder unitrust (CRUT). CRUT may be preferable for some people because it allows the income to keep up with inflation. Also, a donor can make additional contributions.

The IRS requires that the present value of the remainder interest must be at least 10% of the initial value of the trust assets. This determination is made at the time the assets are transferred (it’s an actuarial calculation based on the trust’s terms).

The benefits of a CRT are:

  • Fixed income for life
  • Avoid capital gains tax on the sale of your appreciated assets
  • Charitable income tax deduction for remainder portion of your gift

An example (illustrated at Ohio State University website)

Susan, 75, wants to make a gift to The Ohio State University Foundation but would also like more income in the future. Susan creates a charitable remainder unitrust with annual lifetime payments to her equal to 5% of the fair market value of the trust assets as revalued annually. She funds the trust with assets valued at $500,000.

Susan receives $25,000 the first year from the trust. Subsequent payment amounts vary each year depending on the annual valuations of the trust assets. She is eligible for a federal income tax charitable deduction of $299,845* in the year she creates and funds the trust. This deduction saves Susan $95,950 in her 32% tax bracket.

*Based on a 1.2% charitable midterm federal rate. Deductions and calculations will vary depending on your personal circumstances.            

Charitable Remainder Trusts requires careful planning. Before you act, contact us or your trusted attorney/CPA to discuss your options.

Firm News Uncategorized


In 2021, we successfully litigated 4 cases, winning favorable outcomes for our clients. CV-19-925835 and CV-20-930311 were two companion cases in Cuyahoga Common Pleas Court filed by a plaintiff against our client, a defendant.  CV-19-925835 was filed on November 26, 2019. Plaintiff alleged breach of two contracts. Based on evidence, we quickly filed counterclaims against the plaintiff and a third-party complaint against plaintiff company’s owner. Evidence showed that the lawsuit was frivolous. More appalling, Plaintiff filed second suit against our client on March 3, 2020 with similar claims.

Plaintiff filed numerous motions to distort, delay and/or disrupt the cases, most of them were meritless. In a short period of one year during the global pandemic, a total of 46 motions/briefs were filed (21 in CV-19-925835 and 25 in CV-20-930311), not to mention many other documents, pleadings, and hearings.  This was extraordinary. Yet, our defense team defeated and dissolved all these baseless motions.

In the end, Plaintiff ran out of gas and tricks. On March 26, 2021, Plaintiff voluntarily dismissed all claims against our client in these two cases. Thus, our client triumphed and was satisfied with our representation.

We also defended our clients in two other cases and obtained measurable success. 20CV000003 is a civil case in Lake County Common Pleas. This was another highly contested case (if not more) which involved the same entity in the above two Cuyahoga cases (plaintiff there). Approximately 53 motions/briefs were filed in one year. Types of motions filed by this entity (third party defendants here) included, but not limited to:

  • Motion to disqualify defense counsel
  • Motion to reconsideration
  • Motion for extension of time
  • Motion to compel discovery
  • Renewed and amended motion to disqualify
  • Motion for protective order
  • Motion to strike
  • Motion to dismiss
  • Substituted motion to strike
  • Motion for non-prejudicial dismissal under doctrine of forum non conveniens
  • Motion to continue
  • Motion in limine
  • Motion for leave to file sur-reply

We defeated all these motions and obtained a favorable outcome for the client.

The fourth case was in Cleveland Height Municipal Court where our client, a defendant, prevailed after the trial. Case number is CVI2001426.

Big or small, plaintiff or defense work, we handle the cases with the highest level of care, professionalism, and skill. If you have a business dispute, please contact us for help. 

© 2021 Copyright by Lei Jiang LLC. All rights reserved.

News Uncategorized


On January 8, 2021 Ohio Governor Mike DeWine signed into law the Ohio Revised Limited Liability Company Act (the “New Act”). The New Act completely replaces the existing Ohio Limited Liability Company Act (Chapter 1705 of the Ohio Revised Code) with new Chapter 1706 of the Ohio Revised Code. The New Act significantly updates Ohio’s LLC law, providing increased opportunities and flexibility. This could make Ohio a potential favorable home for an LLC.

Effective Date is April 12, 2021. Applicable date is January 1, 2022.

Important Changes:

• Default Nature: The New Act emphasizes that its contents are generally “default” provisions — applicable only to an LLC that has not adopted an operating agreement with contradicting terms. This gives business owners and investors greater flexibility to design an LLC.

• Flexible in Governance Structure: The New Act allows an LLC to be managed by a member or a manager. This allows an LLC to set up a governance body more akin to that of a for-profit corporation or partnership, such as a board of directors or an oversight committee.

• Ability to Eliminate Fiduciary Duties: The New Act permits an LLC to limit or eliminate entirely all fiduciary duties of members, managers, and officers. The only non-waivable fiduciary duty is the implied covenant of good faith and fair dealing. This has many implications in structuring and liabilities.

• Penalties for Failure to Perform: The New Act permits an LLC to set forth specified penalties and consequences in its operating agreement that will apply if a member breaches the operating agreement or upon the occurrence of a certain event. Business owners should take note of this drafting flexibility as it allows them to contractually penalize certain actions and maintain control.

• Ability of Operating Agreement to Confer Rights to Person Without Economic Interest.

• Series of Limited Liability Companies: This is a drastic change. The New Act allows an LLC to establish “series” in which the assets of each series are protected from claims against and liabilities incurred by another series or the LLC as a whole. This aspect is very useful in the context of investment funds.

• Protections Against Creditors of Members: The New Act also allows an LLC to protect itself from any claims by creditors of a member, including situations where a creditor claims a security interest in a member’s interest in the LLC.

Please contact Lei Jiang law firm to ensure the best protection accorded by the law as a result of these changes.

© 2021 Copyright by Lei Jiang LLC. All rights reserved.

Business Firm News Uncategorized

2020 Business Valuation – A Recent U.S. Case

The U.S. Department of Labor recently prevailed in a district court of Virginia case involving multiple Employee Stock Ownership Plan (ESOP) valuation issues.

The case involved allegations that the selling shareholder, who was also a fiduciary of the employee stock ownership plan, as well as the bank hired to represent the ESOP as an independent fiduciary, breached their fiduciary duties by allowing the plan to overpay for the shareholder’s stock.

The district court issued a lengthy ruling on the case which addressed multiple common valuation practices such as normalization adjustments, discounting, capitalization rates, and proper look-back periods for the purposes of capitalization. For example, the Court found that:

  • The conclusion of value was strikingly close to an initial estimated value that had been floated by ESOP counsel and advisors at the inception of the transaction;
  • The appraisal was performed on a controlling basis even though the seller/owner and his wife were still going to be two of three ESOP co-trustees and occupy two of three company director seats;
  • Almost of all of the appraiser’s assumptions, including his capitalization rate, fluctuated significantly relative to previous appraisals that he had performed on the company and all in a direction towards a conclusion of higher value;
  • The appraiser did not obtain financial projections or prepare his own and get management buy-in and the appraisal utilized only a capitalized cash flow method to the exclusion of a discounted cash flow method(discounted cash flow method); and
  • The ESOP trustee raised many concerns with the draft appraisal but did not follow through and then went ahead and agreed to a purchase price before reviewing the final appraisal.

This case reminds us that (1) much discussions were needed to justify the departure from previous yearly valuations and big rise of stock value, (2) an impartial review of the valuation results might have red flagged the flaws, (3)  the fiduciaries would have been wise to remember that fiduciary duties imposed by ERISA are “the highest known to the law” and any decisions made in fiduciary capacity should have been made with an “eye single to the interests of the participants and beneficiaries.” (4) a genuine negotiation with respect to the purchase price should be conducted.

Lei Jiang Law Firm handles many aspects of business transactions. For questions, please contact us.


Cases at Cleveland Immigration Court

In August and September 2019, Lei Jiang Law Firm accepted six immigration bail cases and defended these clients in the Cleveland Immigration Court. These six clients were all Chinese women. They were detained by the USCIS in July 2019 when the FBI, Ohio Bureau of Investigation, and local police raided multiple illegal massage parlors. Police have not charged them with any wrongdoing. The police did not charge them with any wrongdoing.

These six women came from New York and worked at a local massage parlor. They were all Asians with limited financial resources and did not speak English. Some of the women did not have any money, so our law firm provided our legal services for free. ‘Even though our legal services were free, we provided them with our consistent standard of high-quality service. We visited them in prison many times to better understand their specific situation, collected information, provided advice, and called other social workers to give them the necessary assistance. Some of them said they were tricked into coming to Ohio. Therefore, we also hired professionals in human trafficking to help them.

In court, attorney Lei Jiang successfully won the minimum bail for each lady. Thanks to our efforts, all six women were released and reunited with their families. But our work didn’t stop there. We continued to help them by providing them with useful information, connecting them with non-profit victim protection organizations in New York, and more. We were very grateful we could help them when they were in a desperate situation.

It’s not easy being an immigration court lawyer these days. US laws change quickly, the current climate is anti-immigration, and the courts are rarely sympathetic to immigration cases. Although such bail cases are not within the main business scope of our law firm, we maintain our original intention – to help those in need, to speak out for the disadvantaged, and to hold ourselves to the highest standards.

For legal issues, please contact us.


Can L-1A and EB-1(C) be an alternative to EB-5?

As the waiting time for EB-5 investment immigration is getting longer and longer, more and more people choose to apply for L-1A visa. However, it should be noted that L-1A is a non-immigrant visa, which means that this type of visa can only be used by the applicant and his family to live in the United States for a certain period of time. The L-1A visa is applicable to Chinese companies sending their managers or executives to the US branch to manage business or set up a branch.

Basic Requirements for L-1A Visa:

  • Overseas companies hold more than 50% of American companies.
  • In the three years before submitting the application, the applicant has held a management position in an overseas company for at least one year.
  • Applicants need to hold a management position in a US company.
  • If the U.S. company is newly established or previously inactive, the applicant’s L-1A visa is only valid for one year. If the U.S. company has a mature business, the L-1A visa is valid for up to three years.
  • The L-1A visa is renewable for a maximum period of seven years.
  • For applicants on the L-1A visa valid for one year, the EB-1(C) can only be filed after successfully obtaining a two-year extension of the L-1A visa. Applicants for the three-year L-1A visa do not have this restriction.
  • Dependents are granted L-2 visas and can apply for work authorization.

Unlike EB-5, L-1A has no stated minimum investment requirements. But generally, around $200,000 is needed to ensure success. If you set up a new company, applying for L-1A must have a business plan describing how the applicant will plan to develop the business in the United States, as well as forecast business income and the number of employees, and how the initial investment will help the new American company achieve its goals.

If it is a one-year L-1A visa, renewal is often difficult because the new company only has one year to develop the business. The risk of denial of an L-1A renewal application increases if the company is unable to achieve revenue, profitability, and/or employee plans. If the renewal application is denied, the L-1A visa holder and their family members must leave the United States immediately and can no longer seek a U.S. green card through EB-1(C). The adverse impact on life and business of a sudden departure from the United States will be huge. Those who consider the L-1 pathway often do not pay enough attention to these risk factors.

In addition, if not done properly, the process from L-1A to EB-1(C) to green card can cost much more than the cost of EB-5, whether in terms of US government processing fees or in terms of the overall capital investment of the L-1A corporation. This point is often overlooked or downplayed. This is because there are four steps for L-1A transfer to a green card, and only three steps for EB-5 investment immigration. More steps means higher risk and higher capital. This is a point often overlooked by people considering the L-1 pathway.

However, as long as Chinese EB-5 applicants still face a long waiting list, L-1A/EB-1(C) will be a faster option for a Chinese to enter the United States. But this process is often more difficult than expected, so working with an experienced U.S. immigration lawyer from the very beginning, making a good strategic plan, and doing due diligence are the keys to success. If you are interested in applying for an L-1A visa, please contact Lei Jiang Law Firm.

Phone: (440) 835-2271.


WeChat: leijiang_lawfirm1.

Business Firm News Real Estate Uncategorized

Media Report of Zheng, et al. v. SouFun, et al.

On August 23, 2015, Ms. Zheng and several others, as representatives of a class, filed a class action at U.S. District Court Northern District of Ohio against the biggest online real estate investment portal in China SouFun Holding Ltd. and SouFun International Ltd.

The complaint alleged fraud, violation of Ohio Deceptive Trade Practice Act, violation of Ohio Consumer Sales Practice Law, violation of Ohio real estate law, unjust enrichment, and breach of fiduciary duty. Lei Jiang Law Firm represents Plaintiffs and the class.

Since this was a case involving international parties, the service was a challenge because it must go through Hague Convention service of process. Plaintiffs successfully perfected the service through Hague Convention.

Major Chinese media in China and the U.S. and have reported on this case. The case is being closely watched by many due to the ever increasing trend of Chinese investing in the U.S. and global real estate.

For a report from the People’s Daily, the official media, click here.
Reports from the biggest Chinese media (in Chinese) QQ, SinaSOHUNETEASE.
Reports from the biggest U.S. Chinese media (in Chinese) USChinaPress中金在线.

Firm News Uncategorized

Another Criminal Case Dismissed

One more criminal case against our client was dismissed on September 16, 2016. The case 2016 CRB 661 involved a charge of prostitution. Such charge, if established, would destroy the client’s life since she is a young woman.

We are committed to maximizing the chances of winning your case, even when it means beating the odds. In this case, prosecution claimed to have video and undercover police as witnesses. But after careful review of the evidence, we believed that the case was not as strong as the prosecution would have liked us to believe. After negotiation, the prosecutor dismissed the case against our client. Our client was thrilled.

If you are facing criminal charges, please contact us. The initial consultation is free.

EB-5 News Uncategorized

Proposed EB-5 Legislation

To keep the government running, the Congress has just approved another stopgap continuing resolution, which means that the EB-5 program will remain for most of 2016. However, it has been widely anticipated that legislation in some form will be enacted shortly to renew and reform the Program.

The current EB-5 program, which offers a family-sized set of green cards to foreigners who directly invest $1 million, or invest $500,000 into targeted employment areas (“TEAs”), has been very popular among Chinese investors in recent years.

Under the proposed legislation, once passed, the minimum investment amount in rural and high-unemployment areas would be increased from $500,000 to $800,000. For the investment projects that already had I-924 and I-526 approvals, they will enjoy a 60-day grace period. Thus, if investors submit the application within 30 days of the effective date of the new legislation, the investment amount is $600,000; between the 31st day and the 60th day, the amount is $700,000; and starting the 61st day, the amount will be adjusted to $800,000. Investment to non-TEAs will be adjusted to $1.2 million.

Also, the new legislation will redefine what constitutes the TEA. TEA designation will be tightened up. Further, the new legislation will allot a certain number of visas to different investment categories, such as 2,000 visas for projects in rural areas and 2,000 visas for people who invest $1 million, while the total number of visas remains the same.

Finally the new legislation will require more disclosure regarding how the capital is being utilized, and investors’ source of funds. The current EB-5 program has been under fire when 35 Chinese investors who lost nearly $20 million in South Dakota’s EB-5 program sued the state for fraud.

Although investors can be relieved for now, changes are likely to come. Our firm will monitor closely of any development. Let’s sit tight and wait for what is coming. Please contact us for any EB5 questions.

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