1. ©2012. All rights reserved. Premier Sponsor: SO SOMEONE SAID YOU SHOULD BE A REGIONAL CENTER? EB-5 MECHANICS Steve Anapoell, Greenberg Traurig, LLP Jeff Carr, Economic & Policy Resources, Inc. Kate Kalmykov, Greenberg Traurig, LLP

2. 1 Why is everyone so interested in EB-5 these days? Capital unavailable from traditional sources Foreign investors cheap source of capital EB-5 program previously underutilized

3. 2 Individual EB-5 Investor buys business or starts new business Must be 10 direct W-2 employees Few applications

4. 3 Regional Center EB-5 What is a regional center? 95% of all applications Six-fold increase in 3 years (approximately 180 approved) Main advantage Indirect employment counts

5. 4 Professionals Required for Regional Center Designation Immigration Lawyer Economist EB-5 Business Plan Writer Securities/Corporate Attorney Bank/Escrow Agent Marketing Firm/Commissioned Agent

6. 5 What entities are involved? Regional Center Entity – manager of all projects New Commercial Enterprise – investors subscribe to this entity (Fund) Job Creating Entity – recipient of the EB-5 funds that creates the actual jobs

7. 6 Regional Center Entity Applies to USCIS for designation approval Ongoing administration and compliance responsibilities Markets for investors Due diligence regarding investors source of funds Prepares I-526 packages Markets the region

8. 7 Regional Center Entity Oversight of I-526 filings Obtains signed Subscription Agreements and Escrow Agreements Monitors direct employment Tracking infusion of capital into job-creating enterprise Monitors compliance with business plan and foundation facts in economic report (contd)

9. 8 Regional Center Entity Allocates jobs between investors Prepares annual reporting (Form I-924A) for filing with USCIS Prepares I-829 packages Markets the region Decides on new projects (contd)

10. 9 New Commercial Enterprise Limited partnership (or LLC) Investors make equity investments Invest (equity or debt) in job-creating enterprise

11. 10 Job-Creating Enterprise Development project Borrower in debt approach

12. 11 Recruiting Investors – Securities Laws Overview of Securities Laws Securities Act of 1933, as amended Securities and Exchange Act of 1934, as amended Investment Company Act of 1940, as amended Investment Advisors Act of 1940, as amended

13. 12 Securities Laws Securities Act of 1933 General Statement of law Regulation S Regulation D Disclosure Requirements Recommended use of PPM Compliance with local laws

14. 13 Securities Laws Securities and Exchange Act of 1934 General Statement of Law Definition of Broker Issuer Exemption under Rule 3a4-1 Use of Unregistered Offshore Domestic Finders

15. 14 Securities Laws Securities and Exchange Act of 1934 (contd) Effect of not qualifying for an exemption from Broker- Dealer Registration Civil and criminal penalties Rescission rights (contd)

16. 15 Securities Laws Investment Company Act of 1940 General Statement of Law Is the Issuer an investment company? Available Exemptions

17. 16 Securities Laws Investment Advisors Act of 1940 General Statement of Law Registration (as amended by Dodd Frank) Federal State Anti-Fraud Provisions of Section 206 of the Advisors Act

18. 17 Application to USCIS Project Business Plan RC Business-Operations Plan Offering Memorandum Subscription Agreement Economic Report* Estimate of economic and job creation impacts Definition of regional center geography Marketing Plan Bank (Escrow Agreement?) Project preapproval (optional)

19. 18 Documenting TEA Proof of rural TEA area Non-MSA area per OMB Under 20,000 residents per 2010 Census Proof of high unemployment TEA area Employment statistics Custom TEA (census track aggregation?) State designation letter

20. 19 Operational Plan Regional center overview Strategy Industry focus Business structure Marketing Target market Agents Marketing plan Marketing materials Marketing budget

21. 20 Operational Plan Recruitment of investors Investor screening Investor subscription process Regional center funding Operating budget Source of funds Amounts to be paid by investor for overhead (contd)

22. 21 Operational Plan Administrative oversight Plans for management of regional center Plans for identifying and assessing projects Monitoring projects and job creation (contd)

23. 22 Proposed USCIS Improvements- Mayorkas Proposal Background of proposal Overview of suggested changes in proposal Premium processing/accelerated processing for shovel- ready projects Added expertise (economists; business analysts) Hearing process Timing/Prospects for implementation of proposal

24. 23 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 investors I-526 is approved

25. 24 How much Capital can be raised? Depends on job creation Economist report projects job creation Divide by 10 = maximum number of investors Multiply by $500,000 = maximum capital raise

26. 25 Hot Issues in Regional Center EB-5s Tenant Occupancy TEAs/State Designation Letters Material changes in business plans Capital investment after job creation/cause and effect issues Timelines/delays

27. 26 What are the advantages and disadvantages of creating a regional center?

28. 27 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.

29. 28 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. (contd)

30. 29 Disadvantages Regional center certification may take a lengthy period of time – six months to one year. 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.

31. 30 Disadvantages Regional center certification is no longer a small, privileged group. Over 180 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. (contd)

32. 31 What other options may exist for raising capital under the EB-5 program? Having project adopted by certified regional center Purchasing certified regional center Pooled investment with individual EB-5 petitions