0. 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

1. Overview of the EB-5 Program
Why are real estate developers, private equity funds, and other businesses so interested in EB-5?
Capital unavailable from traditional sources
Cheap source of capital

2. How much Capital can be raised?
Overview of the EB-5 Program
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

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

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

5. Overview of the EB-5 Program
Regional Center EB-5
Investment may create 10 full time jobs either directly or indirectly
Ten-fold increase of USCIS designated RCs in 3 years (over 350 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

6. Overview of the EB-5 Program
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))

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

8. Procedures/Timeline for Regional Center Designation/Exemplar I-526
Regional Center Basics
Procedures/Timeline for Regional Center Designation/Exemplar I-526
File I-924, Regional Center Designation Application, with USCIS
Approximate processing time 9 months
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 months

9. When is Money Available to Developer?
Regional Center Basics
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
Released when investor’s I-526 is approved

10. What entities are involved?
Regional Center Basics
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

11. Intersection of Securities Laws and the EB-5 program
Investors
Securities Act of 1933
Regulation S
Regulation D
Anti-Fraud Provisions
Private Placement Memorandum
Broker-Dealers/Finders
Pooled Investment Vehicle
Securities Exchange Act of 1934
Investment Company Act of 1940
12(g) – 1934 Act
General Partner
Investment Advisers Act of 1940
Regional Center
Administrative Agreement
Project Company
Investment

12. Organizational Structures and Investment Options
New Commercial Enterprise generally formed as an LP or LLC
Key Issues
Role of Investor
Terms of investment

13. Organizational Structures and Investment Options
What type of investment model will work for your project?
Loan Approach
NCE lends the money to the job creating enterprise/project.
Generally includes an annual return to the investor.
Equity Approach
Asset based investment of funds in either real property development or operating businesses.

14. Securities Laws EB-5 and Securities Law
Financing Secured from investors + Success dependent on management by others = A Security
What an investor receives in return for investment (a limited partner interest or LLC membership interest is a security)
Goals of Securities Laws
Adequate disclosure
Prevent Fraud
The Securities Act of 1933
Qualifying for Exemptions to registration
Private offering (Reg D)
Non- U.S. person (Reg S)

15. What are the advantages and disadvantages of creating a regional center?

16. 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.

17. 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.

18. 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.

19. Disadvantages
(cont’d)
Regional center certification is no longer a small, privileged group. Over 350 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.