What will be my role as an investor in an EB-5 project?

This is becoming more important in recent years as older regional center projects are reaching maturity with I-829 approvals in hand. Unfortunately, the answer is not a simple one as it all depends on which regional center and how they have structured the EB-5 project: equity-based or loan-based. If you are invested in an equity-based project, then you are one of the owners and it may be difficult to get your investment out after, say five or six years. If you are in a loan-based one, the argument could be made that it will be easier to get your money back, but it also depends on how that loan was structured to trigger a return and how it was collateralized. Thus, it is very important for you to ask a lot of questions to find out. As the saying goes, "the devil''s in the detail."

If you invest in a regional center project, then you are usually a limited partner in a limited partnership - in which a regional center is a general partner, managing the business of the project. You purchase an interest of a limited partner in the limited partnership in exchange for your capital contribution ($500,000). You generally may not manage the day-to-day operations of the partnership as a limited partner, but you will have a policy-making role and may vote on major business matters, such as liquidating the partnership, changing business purpose, etc. In a direct investment model, you would generally be involved in management and day-to-day operations of a business in which you invest.

There is a recent EB-5 policy memorandum which states clearly the investor''s managerial role. The legal and financial infrastructure will determine whether you are an equity investor or whether you have invested as an equity investor in an entity and then the funds are transferred as a loan to the job creating entity.

The EB-5 investor must be involved in the management of the new commercial enterprise. That means either day-to-day management or if not day-to-day management, then at least advising on policy matters. A limited partner (LP) or an LLC member should meet the requirement. The funds you invest must be at risk (subject to both gain and loss) and must be used in the company for job-creating purposes. If you wish to sell your interest in the company after you receive your permanent green card (two-year condition removed), then that is up to you, and the price you receive will depend upon the market value of your interest at the time you decide to sell. You should have legal counsel assist you in this process and in reviewing all agreements before you decide to invest.

Every project is different and the documents you sign will define your role and ownership interest. Most projects are set up as a limited partnership. You should have an attorney explain what all of the documents you are signing mean on this and other issues.

It totally depends upon the structure of the project and your comfort level. You could be a secured creditor or an equity owner.

This depends on the EB-5 path you take. You will usually have more control with a direct EB-5 project. However, regional center projects are usually structured as loan-based projects. You will not have an ownership interest. There are some equity-based projects out there that will give you fractional ownership. To learn more about which EB-5 path is right for you, contact an EB-5 attorney.

It will depend on your agreement with the developer of the project.

Your status will depend on the terms of the investment. Many projects are structured as Limited Partnerships. You will have an interest in the Limited Partnership which may, in turn, either make a loan to the project or own a share of the equity. The return of your investment will depend on the terms of the exit strategy and the success of the project, but you are unlikely to receive a return of your investment prior to the removal of conditions. As a Limited partner you will not generally be involved in the day-to-day management of the project. Most, but not all EB-5 regional center projects are structured as Limited Partnerships. Some may be structured as Corporations. However, in such a case you would need to be more involved in the management of the project, as a requirement of the EB-5 regulations.

The answer to your question is that it depends on the project.

It will depend on the project into which you invest. The regulations require anything from day-to-day management activities to simply voting on policy matters. If you want more control, you may want to consider a direct EB-5 project. If you do not want as much responsibility, regional center projects often require less. Your money should be entirely at-risk and in no way guaranteed to be returned (though you should also have the opportunity to realize gains on the investment).