1. Does the direct investment shorten the time for the I-526?
Robert Divine: Not inherently. It is conceivable that direct I-526s will end up getting adjudicatingfaster than regional center petitions were getting adjudicated if Congress does not renew theregional center legislation, but no one knows.
2. Can we make a $500,000 investment now?
Kurt Reuss: “Yes. USCIS has officially recognized the validity of the Behring case legal decision torevert to $500,000.
You can start your own direct business right now; additionally, we are performing due diligence ondirect investments and will be sharing on August 1st. If you want to be included, fill out a customerform; if you prefer to have call, schedule a call.
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?
Jay Rosen: It all depends on the particular facts and circumstances. In most cases, the EB-5 investoris still a passive investor and therefore the offering is a sale of a security under U.S. securities laws. Inthose cases, as a general rule, you want the investor to complete an accredited investorquestionnaire. If the investor is located and marketed to offshore, you may not be required to confirmthat the investor is accredited.
That being said, however, as a practical matter, you want to make sure the investor is sophisticatedand has the financial experience in financial matters to evaluate the merits of making this financialinvestment and, in fact, has the wherewithal to make such a financial investment. And so, from acorporate/fiduciary standpoint alone, requiring an investor to sign an accredited investorquestionnaire is almost always best practices.
I am happy to discuss this further if you like. Call me anytime.Tel: 305.428.4526 | Cell: 786.385.9983, jay.rosen@saul.com | http://www.saul.com/
4. A direct investment doesn't work at all for construction job creation?
Robert Divine: Correct.
5. So essentially real estate development is dead until if or when the Regional Center Program gets re-approved?
Rupy Cheema: 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.
6. Please explain the 'escrow account' possibility (mainly timing and duration) with EB5 direct investment.
Robert Divine: I’m not sure what you mean. The rules on making only partial investment at theoutset are less than clear, and it is a risky practice.
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?
Robert Divine: You need an entirely reworked deal structure.
8. .Change of laws and regulations are usually not retroactive. However, why is the RC expiration seemingly killing all pending cases?
Robert Divine: Great question. There might be litigation about this if regional center legislationnot renewed.
9. In direct investment EB-5 projects, do the investors have to actively involved with the new venture, rather than passive investors?
Robert Divine: The rules about “management of the enterprise” are no different under the RegionalCenter Program and direct EB-5.
See 1:15:25 in the webinar recording for our discussion on this matter.
