Panelist contact information w/ links
Rupy Cheema, Due Diligence Analyst
Robert Divine, Immigration Attorney
Jay Rosen, Securities Attorney
Bernard Rojano, Business Plan Writer
Kurt Reuss, Securities Broker and founder of eb5Marketplace
1. "Does a direct investment shorten the adjudication time for the I-526?"
"Not inherently. It is conceivable that direct I-526s will end up getting adjudicated faster than regional center petitions were getting adjudicated if Congress does not renew the regional center legislation, but no one knows." — Robert Divine
2. "Can we make a $500,000 investment now?"
“Yes. USCIS has officially recognized the validity of the Behring case legal decision to revert to $500,000.
You can start your own direct business right now; additionally, we are performing due diligence on direct investments and will be sharing on August 1st. If you want to be included, schedule a call." — Kurt Reuss
3. "Will direct projects that are one-offs still need to verify that a U.S. person is an 'accredited investor' or an overseas person is a 'sophisticated investor'? Does this change if the investor is only purchasing a franchise from a franchisor?"
"It all depends on the particular facts and circumstances. In most cases, the EB-5 investor is still a passive investor and therefore the offering is a sale of a security under U.S. securities laws. In those cases, as a general rule, you want the investor to complete an accredited investor questionnaire. If the investor is located and marketed to offshore, you may not be required to confirm that the investor is accredited.
That being said, however, as a practical matter, you want to make sure the investor is sophisticated and has the experience in financial matters to evaluate the merits of making this financial investment and, in fact, has the wherewithal to make such a financial investment. And so, from a corporate/fiduciary standpoint alone, requiring an investor to sign an accredited investor questionnaire is almost always best practices.— Jay Rosen
4. "A direct investment doesn't work at all for construction job creation?"
"Correct." — Robert Divine
5. "So essentially real estate development is dead until if or when the Regional Center Program gets re-approved?"
"No. Construction jobs won’t qualify. But resulting operational jobs would qualify, like, for example, with the development of a hotel or assisted-living facility." — Rupy Cheema
6. "Please explain the 'escrow account' possibility (mainly timing and duration) with EB-5 direct investments."
"I’m not sure what you mean. The rules on making only a partial investment at the outset are less than clear, and it is a risky practice." — Robert Divine
7. "We have a recently approved I-924 exemplar under the Regional Center Program. In order to take on direct investors, do we need a new business plan?"
"You need an entirely reworked deal structure." — Robert Divine
8. "Change of laws and regulations are usually not retroactive. However, why is the regional center expiration seemingly killing all pending cases?"
"Great question. There might be litigation about this if regional center legislation is not renewed." — Robert Divine
9. "In direct investment EB-5 projects, do the investors have to be actively involved with the new venture, rather than be passive investors?"
"The rules about “management of the enterprise” are no different under the Regional Center Program and direct EB-5.
See webinar recording at 1:15:25 (time) for our discussion on this matter." — Robert Divine
10. "Any specific examples anyone has had with direct or pooled direct? What form did they take? How much hands on involvement is required? What's the timing from idea and funding stage to receiving an I-526 approval?"
"We cannot map out a general deal; every situation is unique. A one-on-one with any of our panelists is a good starting point but expect to incur a consultation fee." — Rupy Cheema
11. "What about Targeted Employment Areas (TEAs)? Are they still valid with direct investment?"
"TEA requirements are the same for direct vs. regional center investment. What has changed is invalidation of the 2019 regs, so instead of HUA (High Unemployment Area) 'bulls eye' rules with USCIS making the decision under 2019 rules, the prior regs, now reinstated, require a state agency letter designating a HUA unless Department of Labor data shows the entire county or MSA (metropolitan statistical area) as an HUA." — Robert Divine
12. "Is the $500,000 number a requirement or can a direct investment be for a larger amount? Would 10 employees at $50,000 per year qualify for a $500,000 investment?"
"$500,000 has always been only a minimum. The hypothetical is too simplistic for any accurate answer." — Robert Divine
13. "Who does the due diligence? Is it a 3rd party or government agency?"
"Government agencies do not perform due diligence, they only review petitions to confirm program compliance. EB5 Diligence was established specifically to provide third-party due diligence." — Rupy Cheema
14. "If 2 or more investors invest $500,000 each, does this require employees to be multiplied? Forexample, 2 Investors = $1,000,000 and the number of employees = 20?"
"Each investor must create 10 new jobs for U.S. workers with no duplication of
counting regarding other investors. Investors can agree on any allocation order for jobs." — Robert Divine
15. "Regarding the NCE and JCE in the direct EB-5 context, would the panel recommend using a business plan writer to explain that the JCE job creation capital funding hascome from EB-5 investors?"
"A professional business plan is highly recommended unless the required jobs
already have been created." — Robert Divine
16. "If I live in Canada and have the USD $500,000/$900,000, how do I source an opportunity?Who do I call? What timelines would I be looking at coming from a place like Canada?"
"Contact eb5Marketplace for your options. We can help investors from anywhere in theworld." — Kurt Reuss
17. "If I’m working a project (stand-alone vacant restaurant) to redevelop into a 2 or 3-tenant restaurant/retail at $4M or less, would I have to structure 12 months for EB-5 I-526s or partnerwith an EB-5 broker that has ready-approved investors to invest?"
"I’m not completely clear on question. Click here to discuss." — Kurt Reuss
18. "I invested $500,000 on January 2019. I was informed that US Congress did not renew the EB-5program at the end of June. What is my status?"
"See our alerts about this." — Robert Divine
19. "Can I use convertible/redeemable preferred stock for the investor?"
"Too complex a question for this venue. For a professional consultation, call my office at 423-752-4416." — Robert Divine
20. "How long do you think we can market the $500,000 direct investment?"
"No limit. Question is when the law supporting regional center arrangements gets renewed, which I predict will be between September and December 2021." — Robert Divine
"If you’re speaking to when the $500,000 minimum will increase, no one knows for sure, but many believe that an increase will be tied to regional center reauthorization. And I anticipate that might happen as early as September 30th." — Kurt Reuss
21. "If I as an NCE have a SEC Title III crowd-funding offering in play, can the content 'Plan anddisclosures' be used for the EB-5 plan and documentation — just adjusted for EB-5 factors?"
"This is a complicated question that requires specifics. Schedule a call." — Kurt Reuss
22. "Does investing in a tech startup or oil wells count towards EB-5?"
"It could if it meets the various requirements." — Robert Divine
"We have EB-5 investments in many different sectors. Schedule a call to learn more." — Kurt Reuss
23. "Can you typically combine EB-5 Investor with SBA program capitalization to use EB-5 investormoney in order to acquire a business?"
"Too complex for this venue. For a professional consultation, call my office at 423-752-4416." — Robert Divine
LEGAL DISCLAIMER: The information provided in this webinar is general information and should not be interpreted as legal or financial-professional counsel. Specific legal or financial advice can only be given to you directly by a professional with full knowledge of your particular situation.