2016 New York EB-5 & Investment Immigration Convention Hot - PDF document

2016 New York EB-5 & Investment Immigration Convention Hot Immigration Issues for Regional Centers and Developers in EB-5 (Advanced Track) Dawn Lurie, Polsinelli, PC Joseph McCarthy, American Dream Fund, Inc. Ronald Fieldstone, Arnstein & Lehr, LLP Rogelio "Roy" Carrasquillo, Fox Rothschild, LLP Moderated By: Christian Triantaphyllis, Foster, LLP Compliance, Monitoring and Due Diligence Regional Centers must develop due diligence procedures and Best Practices • For Owners, Projects, Project principals, affiliated entities • For Securities Compliance • For project selection and project monitoring including investor funding and use of proceeds Prepare for Site Visits and more robust reporting • Funding • Accountability Regional Centers must be properly funded and staffed

Redeployment Structuring in a compliant way • Is “at risk” a requirement and what is “at risk” for redeployment? • Different timing requirements for distribution to third country nationals vs. Chinese nationals • Redeployment in other real estate transactions; disclosure on offering documents; verification of collateral and valuations. • Redeployment in marketable securities and strategies related thereto. • Consideration of Investment Advisor Act of 1940 compliance. • Escrow considerations Guarantees Completion Guaranty • What is it and how does it affect the EB-5 offering? Loan Repayment Guaranty • What is it and how is it EB-5 compliant? • Who is guaranteeing? Guaranty of Refund upon I-526 or IV Visa Denial • Is this EB-5 Compliant? • Insurance • At what stage? • Bad Boy” Guarantees • Environmental Indemnifications

Bonds as EB-5 Investments Should an EB-5 Project resemble a bond offering? Type of Bond Matters • Matter of Izummi “At - Risk” Issue • General Obligation Bonds vs. Revenue Bonds • Other Risks and Considerations Common RFEs and Response Strategies Project Related RFEs • Investment returns – both a risk of loss & chance of gain • Structuring of Administrative Fee Individual Investor Related RFEs • Indebtedness Issue • Congress has articulated that vetting lawfulness of source of funds is a high priority • Fraud Detection; Site Visits including in China; USCIS discussions in Guangzhou Take away point: the Project needs to review the filings

Responding to a Notice of Intent to Terminate 54 regional centers terminated • Over half of all terminations occurring in 2015 and 2016 Inactivity vs. Illegal Activity • Inactivity: USCIS may terminate a regional center’s participation in the Immigrant Investor Program when the regional center fails to: • Submit Form I-924A on an annual basis; or • Promote economic growth as required, such as job creation, or increased domestic capital investment • Regional Center must be provided 30 days from receipt NOIT • If the NOIT response is successful, USCIS will notify the regional center through a Notice of Reaffirmation • If USCIS decides to terminate the regional center, a Notice of Termination is issued • A terminated regional center may appeal the decision Responding to a Notice of Intent to Terminate Cont’d Timing of Regional Center existence: 2013 or before • Template NOITs The regional center’s I -924A filings do not • report any EB-5 capital investment or job creation for the last several fiscal years • report any pending or approved I-526 or I-829 petitions demonstrating investments associated with the regional center • indicate that it has conducted activity that serves the purposes of the EB-5 Program since obtaining its regional center designation

Review of Websites for Compliance with Federal Trade and Securities Laws U.S. Securities and Exchange Commission Issues – Under Rule 506(c) , a company can broadly solicit and generally advertise the offering, but still be deemed to be undertaking a private offering if certain requirements are met Website • Location and Marketing Immigration Law Compliance Disclaimer This presentation outline and the presentation itself are for general education purposes only and are not intended to provide specific guidance or legal advice about what to do or not to do in any particular case. You should not rely on this general information to make decisions about specific immigration matters. If you are not yourself a lawyer, you should seek the assistance of an immigration lawyer to help you resolve these issues. Thank you.