EB-5 Reform and Integrity Act

EB-5 Reform and Integrity Act of 2021

For the last two to three years we waited, our competitors disappeared or moved into other areas of investment banking, our competition died, and we waited, doing other types of business, while we waited for the new regulations. Now we shall accept FIVE special EB-5 clients to do compliance work for and SEC oversight.

Here is our review of the regulations: Part one of two.

A key amendment is that if the required jobs are not all created at the time of filing the Form I-829, investors will have ONE additional year to create the remaining jobs. If the additional year is needed, the investor’s capital also must be invested during that time.

An e-mail account will be maintained for case-specific inquiries as well as for general program information.

Sanctions for failing to submit, knowing submission of untrue facts, or failure to conduct itself in accordance with its designation will subject a regional center to fines, temporary suspension, permanent bar, or termination of consideration.

The EB-5 Reform and Integrity Act of 2020 was introduced in December 2020 and now has noteworthy changes.?Petitions filed on or after enactment without retroactive impact on pending investor petitions. The EB-5 Regional Center Program in order to prevent fraud and to promote and reform foreign capital investment and job creation in communities.

Attestations confirming compliance with “good actor” provisions in will also be required.

When construction is expected to last under 24 months, all direct construction jobs are excluded. The total number of direct jobs is to be multiplied by the fraction of 24 months the construction activity lasts and must total at least 25% of the required job creation.

Regional centers are asked to file business plans for specific projects, or an exemplar application on Form I-924. Importantly, the business plans need not be approved before investor petitions may be filed.

Required in the application, including material investment risks, any material litigation, and information regarding fees paid by the regional center, new commercial enterprise, or any issuer of securities to agents, finders, and brokers involved in the offering. Investors may request copies of annual statements and receive portions relevant to their investment.

A promoter is precluded if the person (1) has committed a crime or offense involving fraud, (2) is subject to an adverse order by a financial regulator, (3) would be barred under U.S. immigration inadmissibility. laws, or (4) has been listed, disciplined or reprimanded for reasons including fraud. Regional centers may be terminated.?

NCEs or JCEs can be debarred for knowingly involving a noncompliant person or failing to provide or knowingly providing false information.

Compliance with securities laws. The Integrity Act specifies that required compliance with securities laws relates to using commercially reasonable efforts to monitor and supervise compliance with the securities laws and not to the potentially broader obligation that stated to confirm compliance with the securities laws in the 2020 Version and earlier draft legislation. This change represents another important advancement. Remember you are selling EQUITY.

DHS to prescribe rules and standards for direct and third-party promoters (including migration agents) to oversee the promotion of EB-5 offerings. The rules and standards may include: registration with USCIS, certification of compliance with subparagraph (H)’s bona fides requirements, guidelines for accurately representing the visa process to investors, and guidelines describing permissible fee arrangements under securities and immigration laws.

Investors will be required to include in petitions a disclosure reflecting all fees and other compensation.

paid to any person including agents, finders, or broker-dealers to the extent not identified in the business plan.

The new rules require business and tax records or similar records to be filed with form I-526, including tax returns of any kind filed during the past SEVEN years (or another period determined by the DHS) by or on behalf of the investor. Note that gift donor’s records will be required in gift cases.

?For more information or to become one of the select FIVE selected represented by our firm, contact Robert Whyte at 310-935-1518 Ext 101

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Thank you to Carolyn Lee and the IIUSA for the information contained herein.?