How are brokers and consultants involved in the EB-5 process?
Are brokers (or consultants) typically used in the EB-5 process, or should the investor go directly to the Regional Center? What risks are there in using a broker/consultant to help in the EB-5 process and application?
Investor can decide if they want to go to a broker/consultant, an EB-5 attorney or regional center directly. If an investor goes to a broker/ consultant, the investor should make sure that this person is properly licensed in selling the investment unit to potential investors. Investor should be aware of that some brokers/consultants are working for commission and their opinions may be biased. However, investors are encouraged to consult qualified independent financial analysts or professionals regarding the investment and conduct sound due diligence of the investment.
I think it is a waste of time to go to a broker, if you are smart person and can understand fiances. You are just as capable of picking a viable program as a sales person!
You do not need a broker or any consultant for the EB-5 process other than an immigration lawyer to prepare the immigrant petition and visa applications. Brokers (or consultants, or agents) are used in the EB-5 process to market certain Regional Center projects.
The benefit of using one of these brokers is that they have information on multiple, different regional centers and could provide comparisons of various regional centers on how they performed in the past and pros and cons of different regional centers. If the brokers/consultants are trustworthy, they could provide valuable information on how to choose the regional center from over 225 regional centers that were approved by the USCIS. The risk of dealing with these brokers/consultants is that these brokers receive ‘finder’s fees’ for introducing or referring investors to the regional center. Because these ‘finder’s fees’ is significant amount, some unscrupulous brokers only introduced those regional centers that promised to pay more fees to them.
Thus, the information the brokers may provide to the investors may not be entirely objective or unbiased. Therefore, each investor should double check the facts, particularly about the approval track record, with the regional centers and perhaps should get a second opinion from an immigration lawyer who does not take fees from these regional centers.
Migration Brokers assist Regional Centers in locating investors. Consultants usually assist Regional Centers in locating Migration Brokers.
Regarding brokers, an investor should either contact a United States broker who is registered with the SEC or a foreign broker who is licensed in the appropriate jurisdiction where that foreign broker transacts business. This is to help insure that the broker is held to a standard of ethics regulated by the SEC or the licensing territory, thereby protecting the investor. An investor may properly go through a registered/licensed Broker or contact a Regional Center directly in order to make an investment. From a securities law perspective, there are minimal risks in using a registered or licensed broker, however using an unregistered or unlicensed consultant could have disastrous effects for the issuer and the project.
Neville M Leslie
Brokers are quite often used but you need to do your own due diligence. Many brokers are only concerned about the commissions they can make.
Foreign National Investors either will choose to invest in a particular Regional Center through their own due diligence or through the services of a Broker ( consultant or intermediary) advising the investor about the viability of a particular project. It is essential that an EB-5 Regional Center project advise the Brokers that they are required to comply with SEC regulations in accurately representing the true facts of the project.Brokers may have entered into a written agreement with the Regional Center to represent the regional center to attract investors, and therefore there has to be accurate representations about the EB-5 project and the supporting documentation such as the economic report showing the required job creation.
Brokers and consultants are usually used because regional centers or issuers don''t know the investors. Typically, a good broker/consultant can be helpful (think, for example, a broker for buying a home). On the other hand, many of them are not good. If you go to a regional center directly, you might be able to cut out the broker (and ask for his/her fees to be discounted to you perhaps), but you''d lose the experience and insight a broker might have.
There is no need for a broker/consultant. Often investors would like to retain an immigration law to file the applications with the immigration service, and only an attorney can represent the investor before the immigration service.
My recommendation is that the investor should go directly to the Attorney. I certainly recommend against going directly to the Regional Center. Investor should definitely have his/her own independent attorney that is NOT associated with the Regional Center. Whether you find your attorney thru an agent or broker that is a different matter. But again starting with an attorney and not going through an agent/broker is the best because you would not be paying any broker’s fees and it is always the attorney that will look after your interests and is bound by American Bar Associations.
I think the investor should contact the regional center directly.
Brokers fulfill a legitimate function in helping investors completer necessary exit documentation in certain countries. Otherwise, brokers exert a negative and harmful influence on the overall process. Going direct is generally preferable for both the Regional Center and the investor''s attorney as well.