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Advice To EB-5 Issuers After Closing

Law firm Greenberg Traurig has written an advisory piece detailing an EB-5 issuer’s obligations to its investors after closing. The starting point is to closely review the New Commercial Enterprise (NCE) Agreement which points out the actions and obligations owed to the EB-5 investors.

Some of the typical obligations include the provision of all relevant documentation for a petition to USCIS, the right to inspection of NCE books and records, and voting rights of investors concerning many significant issues, such as redeployment. Project updates, changes to immigration law, and regional center changes should all be shared with the USA Investor visa applicants regularly.

In the case of a material change that was not addressed in the offering memorandum, investors may have a right to rescind their investment. Generally, the following events would require a supplement to investors: material change to the scope or nature of the project, material change to ownership structure, use of EB-5 investor funds other than as communicated in offering documents. EB-5 investors should be notified of any change that could impact their petitions.

The law firm reminds issuers that “every EB-5 project is a living, fluid, and ever-changing organism” with “events and contingencies that you cannot control or contemplate.” To that end, the NCE agreement should be written with both specificity and flexibility to accommodate future changes.Read the Greenberg Traurig blog

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