EB-5 Legal Issues
William A.
Price, wprice@growthlaw.com
EB-5 Program
• 10,000 visas per year available
without reference to national quotas
• Minimum investment required is $1
mi...
EB-5 Statistics, 2005-12
Applications

2005 2012
322 6041

Approvals

179

3677
EB-5 Benefits
• Conditional Visa On Initial Approval
And Investment
• Permanent visa for self, spouse, and
children under ...
EB-5 Requirements
• Basic Program: $1 million minimum
investment, 10 jobs directly created
• Regional Center “Pilot” Progr...
EB-5 Process
• Initial application with I-526: 16 month
wait for decision even after package
complete, conditional visa if...
EB-5 Fees
• I-526: Lawyer time, economic impact
study (with business plan), realtor
and other professionals, and
Departmen...
Follow-On Employment
• Note that EB-5 investment creates an
employer, which can apply for
admission of additional persons
...
Securities Law Issues
• Full Investor Disclosure, Updated:
“All Issues Material To Investment”,
Or Securities Fraud (10b-5...
Securities Documentation
• Accredited Investor Questionnaire
(and proof funds are legally
gained, investment suitable for
...
Company Documents
• Articles of Organization (create entity)
• Bylaws, Operating Agreement, Other
Internal Agreements ($$
...
Other Necessary Deals
• Franchisor/Franchisee disclosures and
agreements/conditions, if applicable
• Real estate ownership...
EB-5 Taxation Questions
• US Residents taxed worldwide on all
income, whatever source, applies to
all conditional and perm...
EB-5 Problems
• Deceptive Promoters: Note recent Cook
County economic development where
centers never built
• Problem loca...
William A. Price
Attorney at Law
www.growthlaw.com
wprice@growthlaw.com
Tel/Fax 1-800-630-4780

ANY QUESTIONS?
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Eb 5 program legal issues

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Legal and practical issues for developers, consultants, and realtors who work with EB-5 and other entrepreneurs seeking US visas by making qualifying investments in new or rescued US businesses

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Eb 5 program legal issues

  1. 1. EB-5 Legal Issues William A. Price, wprice@growthlaw.com
  2. 2. EB-5 Program • 10,000 visas per year available without reference to national quotas • Minimum investment required is $1 million if not through a regional center serving an economically depressed population/$500,000 if through a center • Decision Times Are Long: 16 months as of September 2013
  3. 3. EB-5 Statistics, 2005-12 Applications 2005 2012 322 6041 Approvals 179 3677
  4. 4. EB-5 Benefits • Conditional Visa On Initial Approval And Investment • Permanent visa for self, spouse, and children under 21 if job and other conditions still in place after 2 years • Return On Investments If Investment Produces Profits • US Citizen if permanent resident 5 years
  5. 5. EB-5 Requirements • Basic Program: $1 million minimum investment, 10 jobs directly created • Regional Center “Pilot” Program: $500,000 minimum investment in “Targeted Employment Area”, 10 jobs directly or indirectly created (e.g., each mfg. job may result in 3 more community jobs)
  6. 6. EB-5 Process • Initial application with I-526: 16 month wait for decision even after package complete, conditional visa if approved • Permanent visas if jobs and investment happened per approved I526, I-829 application possible after 2 years • I-924 is application to become a regional center
  7. 7. EB-5 Fees • I-526: Lawyer time, economic impact study (with business plan), realtor and other professionals, and Department of State application fee of $1,500 • I-829: Lawyer and certifying accountant or other professional fee plus Department of State application fee of $3,750 plus $85 biometric
  8. 8. Follow-On Employment • Note that EB-5 investment creates an employer, which can apply for admission of additional persons under employment categories (H1-B or L1) or business visitor categories (Miscellaneous, includes B-1 business visitor, F1-OPT Optional Practical Training, 01-A Extraordinary Ability/Achievement)
  9. 9. Securities Law Issues • Full Investor Disclosure, Updated: “All Issues Material To Investment”, Or Securities Fraud (10b-5 or state) • Limited Exceptions To Public Offering Registration: Accredited Investors, Regulation D and JOBS Act apply • Persons Selling Must Be BrokerDealers if receive contingent compensation, or officers of company
  10. 10. Securities Documentation • Accredited Investor Questionnaire (and proof funds are legally gained, investment suitable for investor(s)) • Subscription Agreement (control, reporting, and return rights of investors and promoters, Reg D reports after sale) • Disclosure Documentation: financial, legal PPM or Prospectus
  11. 11. Company Documents • Articles of Organization (create entity) • Bylaws, Operating Agreement, Other Internal Agreements ($$ contributions, management rights , tax duties, agency authority) • Membership Interests/Shares
  12. 12. Other Necessary Deals • Franchisor/Franchisee disclosures and agreements/conditions, if applicable • Real estate ownership or leasing documentation, including building/zoning • Supplier and Customer contracts, credit terms • Loans or other financing, if appropriate
  13. 13. EB-5 Taxation Questions • US Residents taxed worldwide on all income, whatever source, applies to all conditional and permanent residents • Entity level tax is possible • If bank accounts and other corporate interests outside US, reporting to IRS • Tax Treaties May Reduce entity taxes, specify where taxed
  14. 14. EB-5 Problems • Deceptive Promoters: Note recent Cook County economic development where centers never built • Problem locations: TSA’s not high job creation places, market risk for all products and services • People: Operators need supervision, reporting, and encouragement/training, or replacement
  15. 15. William A. Price Attorney at Law www.growthlaw.com wprice@growthlaw.com Tel/Fax 1-800-630-4780 ANY QUESTIONS?

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