An EB-5 offering package can depend on the project but for regional center investments often includes a subscription agreement, and private placement memorandum (PPM), and escrow agreement.
A subscription agreement is the contract that allows the investors to join partnership or a limited-liability company.
The PPM will is a summary of necessary risk disclosures, as well as all the entities involved in the offering, the type of the investment, fees being paid, and any the conflicts of interest and the independent professionals used to mitigate such conflicts. It may also include an arbitration clause to for dispute resolution.
There is no EB-5 program requirement for a PPM but U.S. securities laws apply, complete disclosure in offering documents is a best practice to avoid issues or litigation later later on.
An escrow agreement is made between the EB-5 project manager and the EB-5 investors and outlines the terms by which an independent escrow agent will manage the EB-5 project escrow account to ensure that the EB-5 capital be is properly released only at certain points in time and used only for pre-determined reasons.
