1. ©2012. All rights reserved. EB-5 Visas: Investments and New Jobs Kate Kalmykov  kalmykovk@gtlaw.com  www.eb5insights.comkalmykovk@gtlaw.comwww.eb5insights.com Presented by: Kate Kalmykov

2. 1 Overview of the EB-5 Program  Congress created the EB-5 category in 1990  10,000 green cards available to foreign nationals each FY  Two options under the program: □ Individual Investment □ Regional Center (RC) Investment  90-95% of EB-5 petitions filed through RCs

3. 2 How much Capital can be raised?  Depends on job creation  Economist report projects job creation  Divide by 10 = maximum number of investors  Multiply by $1 million or $500,000 = maximum capital raise Overview of the EB-5 Program

4. 3 Regional Center Basics- What are Our Options  Form New Regional Center  Have Project “Adopted” By an Existing Center  Buy a Dormant Regional Center  Pool Individual EB-5 Investors for projects that have sufficient direct employment

5. 4 Regional Center Basics  What is a Regional Center? □ Entity, organization or agency USCIS designates □ Focus on a specific geographic area in the U.S. □ Seek to promote economic growth through increased export sales, improved regional productivity, creation of new jobs, and increased domestic capital investment

6. 5 Regional Center EB-5  Investment may create 10 full time jobs either directly or indirectly  Six-fold increase of USCIS designated RCs in 3 years (over 200 approved)  Main advantages  Indirect employment counts  Investor is geographically mobile  Participation Limited- Investor does not have to be directly involved in the day to day of business operations Overview of the EB-5 Program

7. 6  Basic Requirements for the Job Creating Enterprise □ New Commercial Enterprise □ Benefit the U.S. economy □ Create at least 10 full time jobs for U.S. workers □ Invest $1 million or $500,00 (if in Targeted Employment Area (TEA))

8. 7 Professionals Involved in Regional Center Designation  Immigration Lawyer  Economist  EB-5 Business Plan Writer  Securities/Corporate Attorney  Bank/Escrow Agent  Marketing Firm/Commissioned Agent Regional Center Basics

9. 8 Regional Center Application to USCIS  Business Plan  Geographical area (TEA?)  Operational Plan  Offering Memorandum  Subscription Agreement  Economic Report  Job creation  Marketing Plan  Bank (Escrow Agreement?)  Project preapproval (optional) Regional Center Basics

10. 9 Procedures/Timeline for Regional Center Designation/Exemplar I-526  File I-924, Regional Center Designation Application, with USCIS □ Approximate processing time 9 months but may be longer (premium processing tabled)  Option to file exemplar I-526 for a specific project  Regional Center may begin marketing projects once USCIS approves the I-924  Investors file EB-5 petitions (Form I-526) □ Approximate processing time 7 to 8 months Regional Center Basics

11. 10 When is Money Available to Developer?  Investor must invest 100% (usually $500,000) before I-526 filed  Money can go  To project immediately  To escrow  100% of the funds or a portion is released when investor’s I- 526 is approved  Release can also be triggered upon I-526 filing  So How Long Did That Take? □ RC designation –9 Months I-526 approval – 7-8 Months □ Total – 15 – 17 months (not including time to prepare and submit RC designation or time it takes to find investors) Regional Center Basics

12. 11 What entities are involved?  Regional Center – administers the EB-5 projects  New Commercial Enterprise – investors subscribe to this entity  Job Creating Entity – recipient of the EB-5 funds that creates the actual jobs Regional Center Basics

13. Investors Broker-Dealers/Finders General Partner Pooled Investment Vehicle Administrative Agreement Regional Center Basics: Structure Regional Center Project Company Investment Investment Advisers Act of 1940 Securities Exchange Act of 1934 Securities Act of 1933  Regulation S  Regulation D Anti-Fraud Provisions  Private Placement Memorandum Investment Company Act of 1940 12(g) – 1934 Act

14. 13 Regional Center EB-5s  Tenant Occupancy  Material changes in business plans  Capital investment after job creation/“cause and effect” issues □ Bridge Financing  Timelines/delays Hot Topics

15. 14 Advantages  Developers can count indirect and induced employment opportunities, and not just direct jobs, in meeting the ten jobs per investor requirement.  A particular project within the regional center may be pre-approved by USCIS.  Regional center certification provides an aura of legitimacy or endorsement that may help in marketing to foreign investors.

16. 15 Advantages  Regional center designation is a one- time designation allowing future projects to be marketed without incurring delays.  In addition to funding their own projects, regional centers can profit by funding projects developed by others.

17. 16 Disadvantages  Regional center certification takes a long time.  Regional center certification may entail a significant expense, including hiring an economist, hiring a business plan writer, hiring immigration and securities attorneys and other expenses.  Regional center certification is not the same as approval of any particular regional center project.

18. 17 Disadvantages  Regional center certification is no longer a small, privileged group. Over 215 regional centers have now been certified.  Many regional centers have not been able to attract any investors. Newer regional centers find it difficult to compete in their marketing efforts with long- existing regional centers with a track record of many immigration approvals, some with both I-526 and I- 829 approvals.  Regional centers have ongoing administrative and filing requirements with USCIS in order to avoid de- certification. (cont’d)