+1-800-997-1228
Questions & Answers

What are the laws and protocol related to paying a fee for being introduced to EB-5 investors?

I own a start-up company and was recently approached about doing EB-5 investment financing. The consultant, who is from Brazil, has requested a $40,000 fee to introduce me to EB-5 investors. What is the normal protocol for these types of arrangements?

Answers

  • Avatar

    A Olusanjo Omoniyi

    Immigration Attorney
    Answered on

    Caveat emptor, buyer beware, this type of arrangement is not unusual. However, the words of this consultant and his line of business should be seriously investigated before you part with your money. In essence, do you own due diligence before hiring the consultant and investigate whom he is representing whether it is a regional center or any corporate entity.

  • Avatar

    Ed Beshara

    Immigration Attorney
    Answered on

    An experienced EB-5 immigration attorney and an experienced SEC attorney can offer expertise as to when you can legally pay a finder fee. The question is how the offering was made and by who. Usually a Broker Dealer can accept finder fees by introducing investors to the project into the U.S. If the persons or groups sourcing the investors have no connections to the U.S., they may take a fee

  • Avatar

    Stephen Berman

    Immigration Attorney
    Answered on

    I am not aware of any rule from the immigration regulations on this subject, however there may be rules from other agencies relating to this matter that may require more research on your part

  • Avatar

    Vaughan de Kirby

    Immigration Attorney
    Answered on

    You may want to discuss this with your broker-dealer that is licensed with FINRA.

  • Avatar

    John Tishler

    Securities Attorney
    Answered on

    The first step in an EB-5 program is to determine the feasibility of EB-5 as a funding source for the needs of the company. Determining the feasibility of a program requires knowledgeable professionals who have the right to be compensated for their time and expertise. That said, a feasibility analysis should cost significantly less than the amount you state below. To be fair, it seems your consultant was proposing to do more than just a feasibility analysis. My point is that no professionals should do more until an appropriate team of professionals (immigration and corporate/securities attorneys, economist, broker-dealer or marketing consultant) determines that EB-5 is likely to be feasible at a cost of capital and within the time constraints needed. I will add that EB-5 normally does not work well for the working capital needs of a start-up.

Add your comment

Use a Facebook account to add a comment, subject to Facebook's Terms of Service and Privacy Policy. Your Facebook name, photo & other personal information you make public on Facebook will appear with your comment.