When do project offering documents for an EB-5 project need to be updated?

If there are any material changes (changes that a reasonable investor would consider important or would want to know about), the documents should be updated. Otherwise, if everything is the same, there is no need to update them.

The offering documents should generally only be updated if there are material changes or inaccuracies that need to be corrected. One must get appropriate consent from investors in order to make changes in the terms.

If the new commercial enterprise is a limited partnership, then the EB-5 investors would be limited partners. Under the applicable regulations, a limited partner qualifies as "engaged in the management" of the new commercial enterprise.

The moment there is a material change in the business operations of an EB-5 project, you should take prompt steps to update your private placement memorandum (PPM) that the investors relied on. This will help avoid unpleasant responses from relevant agencies, including, but not limited to, the Securities and Exchange Commission (SEC) and USCIS, particularly before I-829 is filed or as part of the annual filing. The steps you take can forestall any allegation of securities fraud at the SEC, for instance. Also, with regards to the USCIS, there may be investigations if there are signs that the project appears to be failing or any reports of lack of progress that seem to be rooted in your material changes. There is no fixed rule on when to update, however. The frequency of material changes should dictate the interval at which the update should be done. Advisably, consult your EB-5 attorney for further compliance that may be needed.

Clearly you would have to update your EB-5 offering documents when there is any material change. If there is no material change, they would not have to be updated annually.

There are no requirements for updating offering documents. However, if there is a material change to offering documents after an investor subscribes, a disclosure should be circulated to all investors. If the change is material, and occurs after subscription, the investor must be given rescission rights. Ideally, wherever possible, no material changes should be entertained post-execution.

Thank you for your question about the EB-5 investor visa. Project documentation should not be changing if the project has not changed. If the changes are so significant, you may have to file an addendum. It is best for you to consult with an immigration attorney who will gather all of the information and make the respective determinations as to any required amendments.

Generally, offering documents would need to be updated if redeployment is necessary due to retrogression. If the project should be modified or the reality under the business plan needs updating, then the documents should be amended. If you believe documents may need to be updated, it might be prudent to consult with a securities attorney and immigration attorney to determine what, if anything, is needed to be updated and submitted.

While the project should provide an annual report of its progress, it is not necessary to update the offering documents unless any updates change the basis for that offering. If they do, I would question whether the project has undergone material change. You should carefully review with your EB-5 lawyer on what your terminology means and what you need to do.

Generally, they are not updated. There are certain circumstances that would require an update, but certainly not annually.