In January of 2015, Nevada Congressman, Mark Amodei and Colorado Congressman, Jared Polis, introduced legislation to make the EB-5 program permanent and allow for job creation through foreign capital investment. With the program set to expire in September of this year, the congressmen recognized the tremendous economic benefit and opportunity that the EB-5 program (or immigrant investor category) has to our nation’s future. Additionally, the bill titled American Entrepreneurship and Investment Act of 2015, would address Target Employment Areas, transparency and streamline the program’s processing times.
While the program has experienced some opposition, the often sited downfalls of the program are erroneous. In order to properly educate the public and participants about the program, the Nevada State EB-5 Regional Center has compiled the following fact cards:
The EB-5 program is a highly regulated employment-based permanent residence application that takes years to complete. The initial application requires detailed proof of investment in a qualified project. It also requires evidence of an investment of either $1,000,000 USD or $500,000 USD and the creation of 10 jobs for U.S. workers. Moreover, EB-5 applicants go through a rigorous vetting process to demonstrate that their source(s) of funds is(are) lawful and that those funds can legally be invested into qualified projects.
An investor can NOT simply purchase entry into the United States. In fact, every investor is carefully screened and must meet a lengthy list of requirements. If, and only if, approved the investor is issued a “conditional green card.” The same in-depth review of the project and the investor’s background is conducted two years after the conditional status is granted to ensure the individual eligibility for the EB-5 immigrant investor category is intact.
All employment-based immigrant applicants undergo detailed and extensive background checks that are conducted by multiple government agencies in efforts to ensure full and legal compliance with the EB-5 Program. The first steps are done through the U.S. Department of Homeland Security (DHS)/U.S. Citizenship and Immigration Services (USCIS) or the U.S. Department of State (DOS), or both. Beyond this, investors are subjected to fingerprinting, fund verification, security checks to identify any criminal, fraudulent activities and/or improper use of “sensitive technology,” and many other processes to identify possible illegal activities before being given a “conditional green card.”
In addition to the investment requirements and stringent screening processes, the total number of investors gaining legal entry and immigration must comply with the annual limit of 10,000 set by the USCIS. This set number of EB-5 (employment-based immigrant categories) visas does not allow participants to jump ahead of traditional applicants.
All EB-5 securities offerings are treated as traditional securities offerings. There are no EB-5 program-specific exemptions to U.S. or state securities laws. Whether you are selling a limited liability company or limited partnership interests to raise equity for a local investment, all state and federal securities laws apply and the persons responsible for preparing the documentation, including the Private Placement Memorandum (PPM), should take reasonable steps to confirm that the information included is completely accurate and does not misstate or omit facts that would be considered material to an investor’s decision to invest.
Federal and state securities laws require the issuer of securities to provide prospective investors with full, fair, and complete disclosure of all “material” facts about the offering, the issuer of the securities, and the issuer’s management personnel, business, operations, and finances. Each investment opportunity may be dependent on various securities laws including: (i) the Securities Act of 1933, as amended, and state “blue sky” laws regarding the offer and sale of securities; (ii) the Investment Company Act of 1940, as amended; and (iii) the Investment Advisers Act of 1940, as amended, and state equivalents.
Unlicensed brokers and finders and other introducers of foreign capital investment are regulated by the EB-5 Program and the securities laws. Entities raising capital from investors seeking a visa under the EB-5 program should consult with legal counsel to ensure that they are complying with all applicable securities laws. These entities must also comply with relevant foreign securities laws and should evaluate whether introducers of capital (commonly referred to as “finders” or “broker-dealers”) must comply with the broker-dealer registration requirements of the Securities Exchange Act of 1934.
The EB-5 Program works diligently to prevent fraud within the program and uphold our nation’s security efforts. Both the U.S. Department of Homeland Security (DHS) and the U.S. Department of State (DOS) have a variety of resources, the delegated authority, and the regulations in place to monitor, review, and investigate any potential criminal or fraudulent activity that might be perpetrated by an EB-5 investor. Likewise, the SEC along with the Federal Bureau of Investigation (FBI) and the DHS, have existing tools in place to deal with fraud, criminal activities, and security threats that may be perpetrated by investors, entities that offer investments, and Regional Centers.
In summary…the simple facts about the investors participating in the Nevada State EB-5 Regional Center:
- Investment of either $1,000,000 USD or $500,000 USD and the creation of a minimum of 10 U.S. based jobs.
- Proof of lawful investment.
- Stringent background check: Multiple government agencies participate in the background check, investment verification and more.
- Currently, the USCIS grants 10,000 visas a year and the immigrant entry is not to exceed 10,000.
- EB-5 investment opportunities must follow traditional securities laws and processes.
- Brokers, finders and broker-dealers must comply with various securities laws.
- Preventing fraud and upholding national security is paramount.
For more information about becoming an approved project/company developer or foreign capital investor, contact the NVEB-5 Regional Center at:
Toll Free: 855.498.6360