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How can an EB-5 projects recruit more EB-5 investors than what was originally intended in the project business plan?

I am an EB-5 regional center operator and I have a project which was originally planned to raise $10M from 20 Investors. My capital raising process was more successful than I expected, Could I increase the total number of EB-5 Investors that my NCE could subscribe? Would this be considered a material change? What other issues might this incur?

Answers

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    Salvatore Picataggio

    Immigration Attorney
    Answered on

    Job creation. It would cut into the planned job creation. Also, it does affect the overall capital stack, which might trigger a material change.

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    Lynne Feldman

    Immigration Attorney
    Answered on

    I would consult with USCIS or make a sub-project.

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    Julia Roussinova

    Immigration Attorney
    Answered on

    Have a consultation with your securities law counsel. Offering documentation may require amendments and notice to current EB-5 investors. An important issue is a sufficient job creation cushion for all EB-5 investors in the project.

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    Bernard P Wolfsdorf

    Immigration Attorney
    Answered on

    You need to consult with a securities lawyer and you need to amend the documents to make sure you have transparency and that you have the consent of other investors to be completely transparent. Of course, having sufficient jobs is a critical aspect.

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    Charles Foster

    Immigration Attorney
    Answered on

    It may require an amendment and/or disclosure on your next I-526 petition.

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    Marko Issever

    EB-5 Broker Dealer
    Answered on

    First and foremost, when dealing with securities law issues, you should always seek counsel from a securities attorney. If your PPM gives you the flexibility to increase the size of the issue, then you could most likely just simply inform your investors. If an amendment is necessary that could put the EB-5 investors in a more "diluted" position from an investment safety standpoint, then you should be very careful. In other words, from a securities law standpoint, there are serious liability considerations. This is certainly not the right platform to discuss that. As for the immigration requirements, the project has to generate enough jobs to make the upsize feasible in the first place. Even if, there are enough jobs that could be allocated to the increased number of investors, your investors could still complain that you are reducing the job creation "buffer" by the upsize. In summary, there are both immigration and securities law considerations. So, you should surely seek serious professional advice.

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    Phuong Le

    Immigration Attorney
    Answered on

    First of all, congrats. You have an enviable problem to have. Second, among other things, you'd have to amend your offering documents and give notice to your previous investors as well. It's unlikely that an increased offering alone would be considered a material change by USCIS, but wouldn't be surprising if they issued a RFE requesting an update on your project's progress/status.

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    Belma Chinchoy

    Immigration Attorney
    Answered on

    A change to the business plan is not a major issue here. Securities law is what you should focus on. Start by looking how the offering docs were drafted. Was an increase in the EB-5 raise contemplated? Then consider the budget. Which capital would the additional EB-5 funds replace? Then discuss with an EB-5 immigration attorney and securities attorneys.

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    Dale Schwartz

    Immigration Attorney
    Answered on

    Do you have a lawyer working with you on your regional center? You are asking lawyers who do not represent you to give you serious legal advice for free, and if wrong, they are subjecting them to serious liability.

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    Russell C Weigel, III

    Securities Attorney
    Answered on

    Not enough info about your circumstance is provided to answer your question, but that is a good thing. You should seek securities counsel privately on an issue like this.

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    Hassan Elkhalil

    Immigration Attorney
    Answered on

    Whatever you do , it is going to take sometimes and you will not be able to finish before the new investment requirement kicks in on Nov. 21, 2019!

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