While the EB-5 Immigrant Investor Program continues to offer significant opportunities, a flurry of litigation, more scrutiny by lawmakers, and an uptick in regulatory activity point to increased risks for EB-5 stakeholders. Whether you are a professional working with an EB-5 regional center or a developer borrowing EB-5 funds or starting your EB-5 deal — or a senior lender or a strategic institutional investor in a project funded through EB-5 financing — you need nimble and experienced counsel.
Mintz Levin knows the EB-5 landscape and SEC requirements. We also know the challenges in the EB-5 marketplace.
Cybersecurity threats, SEC investigations, FCPA (Foreign Corrupt Practices Act) vulnerabilities, and increased immigration enforcement are urgent areas for regional centers, broker-dealers, and issuers to consider in deal planning and execution. Working closely with you, our attorneys will provide you with counsel on all aspects of your EB-5 deal. In this climate of increased enforcement, having experienced counsel steer due diligence and oversee material disclosures in your offering is more important than ever before.
The firm’s national EB-5 practice brings together legal talent across several fields, including corporate and securities law, litigation, immigration, lending, employment, real estate, data security, and environmental law. With dedicated counsel by your side, you can reduce your risk significantly. Our experienced EB-5 attorneys will look out for your interests from the early planning stages and help you manage any legal challenges that arise. We will also help you anticipate what’s around the corner so you are prepared to overcome the unexpected. We help our EB-5 clients achieve their goals, one deal at a time and with the customization and planning integral to any sound financing transaction.
What is the EB-5 Program?
USCIS administers the EB-5 Immigrant Investor Program, which was created by Congress in 1990 to stimulate the US economy through job creation and capital investment by foreign investors. Under a pilot immigration program first enacted in 1992 and regularly reauthorized by Congress, certain EB-5 visas also are set aside for investors in Regional Centers designated by USCIS based on proposals for promoting economic growth. Foreign investors may secure permanent residence status through the EB-5 Program.
What are the core requirements of the EB-5 Program?
First, EB-5 investors must invest in a new commercial enterprise, which means any for-profit activity formed for the ongoing conduct of lawful business including, but not limited to:
- Sole proprietorship
- Partnership (whether limited or general)
- Holding company
- Joint venture
- Business trust or other entity, which may be publicly or privately owned
Under the law, this definition includes a commercial enterprise consisting of a holding company and its wholly owned subsidiaries, provided that each such subsidiary is engaged in a for-profit activity formed for the ongoing conduct of a lawful business. There are also provisions for investing in a troubled business, but most EB-5 investment projects are undertaken for new commercial enterprises.
Second, each investor must invest, on an at-risk basis, either $500,000 or $1 million into a new commercial enterprise. The investment amount depends on where the new enterprise is located. Investments in a Targeted Employment Area (TEA) may be at the $500,000 level. Under the Immigration and Nationality Act, a TEA is defined as an area that, at the time of investment, is a rural area or an area experiencing unemployment of at least 150% of the national average rate.
Third, for each EB-5 investor who wishes to qualify for a green card, the new commercial enterprise needs to create 10 new jobs for US workers. For EB-5 projects that are under the umbrella of a USCIS designated Regional Center, the job creation may be indirect. Indirect jobs are those jobs shown to have been created collaterally or as a result of capital invested in a commercial enterprise affiliated with a Regional Center. A foreign investor may use the indirect job calculation only if affiliated with a Regional Center.
- Our Corporate & Securities Practice works with clients through all stages, from initial formation and financing, to strategic alliances, private financings and public offerings, and mergers and acquisitions
- One of the largest corporate immigration practices in the United States
- Completed over 300 private placements since 2010, with an aggregate deal value of approximately $3 billion
- Completed more than 90 debt transactions since 2010, with an aggregate deal value of over $7 billion
- National reputation as a go-to firm for high-stakes litigation sealed by numerous significant victories
Areas of Focus
- FCPA compliance
- Data privacy and security
- Crisis management
- Securities litigation and SEC investigations