Questions and Answers > EB-5 Investments

How are referral fees handled in EB-5 cases?

Can realtors, marketing agents or third party referral sources of EB-5 investors be compensated? If so, what is the way to pay referral fees?

Answers

• Reza Rahbaran

  Immigration Attorney

  Answered on January 20, 2014

  Referral fees are governed by SEC regulations. An experienced SEC attorney would answer your concern best.

• Mahsa Aliaskari

  Immigration Attorney

  Answered on July 9, 2013

  SEC regulations control much of this, you should speak with a corporate securities attorneys regarding when a broker/dealer license is required.

• Shahzad Q Qadri

  RC Creator

  Answered on July 3, 2013

  Referral fees are routinely paid. However, one has to be careful that they do not run afoul of the SEC rules. Several different structures have been used to compensate brokers, contact an experienced attorney before entering into any such arrangements.

• Fredrick W Voigtmann

  Immigration Attorney

  Answered on July 2, 2013

  SEC regulations govern the payment of such fees, which typically cannot be paid in the U.S. unless the person is a registered/licensed financial broker. You should consult with an attorney experienced in SEC regulations if you have specific questions or issues related to the payment of referral fees.

• John Roth

  Immigration Attorney

  Answered on July 1, 2013

  If the 3rd party referral source is operating in whole or in part in the U.S., the referring party may not receive a referral fee (regardless of what it is called) unless they are an SEC licensed broker-dealer. I should say that there are still a few commentators on this question who maintain that there might still be a "finder''s exception" to the broker registration rule, based on some SEC no-action letters and on a decision by a federal district judge last year (SEC v. Kramer), it''s clear that the SEC continues to maintain that "transaction-based compensation" is enough to implicate broker activity and require SEC licensing. In any event, you should certainly consult with a securities attorney before considering any such activity.

• Jinhee Wilde

  Immigration Attorney

  Answered on June 28, 2013

  I understand that all Regional Centers pay a "finder''s fee" or commission to brokers who introduce investors after those investors receive I-526 approvals.

• Philip H Teplen

  Immigration Attorney

  Answered on June 28, 2013

  It depends. The trend is to require all to be done through a registered Broker/Dealer.

• Michael A Harris, Esq

  Immigration Attorney

  Answered on June 28, 2013

  You should speak with a qualified Securities Attorney. More scrutiny is being given to payment of referral fees to U.S. persons who are not licensed broker dealers under U.S. securities laws.

• Mark Ivener

  Immigration Attorney

  Answered on June 28, 2013

  Referral fees can only be paid in the U.S. to licensed broker dealers.