Q & A REID THOMAS — BY STAFF
the EB-5 business until then had failed . But that changed recently with the failure of Signature Bank , a well-known bank in EB-5 . When Signature failed , it set off alarms for many people . Regional centers are certainly aware of the importance of protecting their investors ' funds . However , EB-5 investors should ask the projects they ' re considering investing in how their funds are protected .
Do EB-5 investors understand what happens with their money when they transfer to a U . S . bank ?
The reality is that EB-5 banking in the U . S . is difficult . EB-5 touches , in many respects , all the hot buttons that a regulator would deal with . That said , EB-5 overall is relatively small . There are only 10,000 visas a year . And so , for a bank like JP Morgan or Citibank , that ' s a very small opportunity for all the complexity it entails . It ' s hard for them to consider entering this space . Before RIA , there were some bad actors in the EB-5 space , making many banks nervous . As a result , very few banks will accept EB-5 funds . Of the 8,700 , there might be three or four who will consistently do it with any regularity , and those banks are all small . What must the EB-5 services industry understand about the role of deposit management ? The point to all of my colleagues in regional centers and law firms is that when a bank changes its policies , it dramatically impacts the project and the legal documents created and puts the investors at risk . In EB-5 , when money moves , how it moves , and where it goes is critically important from a timing and audit perspective . Changing what has been cast in stone in the original structure can be difficult and risky for investors . But there are solutions that provides flexibility to deal with changes that banks make without adversely affecting the project status , the audit trail , or other things .
Ensuring Funds are Protected In Compliance With Federal Banking And Eb-5 Regulation
What is Ampersand and how does it approach the current EB-5 banking landscape ? Ampersand focuses on deposit management and aligns what
depositors are looking for with what banks can offer , be it a great interest rate , safety , and protection of their deposits , or increasingly aligning with a depositor ' s value . We can act as an escrow agent , which helps investors protect their funds while subscribing to projects . We also de-risk the EB-5 deposits rom the banks . If banks change their policies or minds about being in EB-5 , we can be flexible without negatively impacting investors or projects .
What makes Ampersand stand apart from the competition ? We separate the deposit administration from the banks themselves . We have built a network of banks or a syndicate of banks . Unlike others , who might be a single bank trying to take EB-5 deposits , we have relationships with hundreds of banks in our network . We separate ourselves by being an escrow agent , taking investor funds , and deploying them across that network .
We divide the deposits into $ 250,000 increments and spread them across the bank network so that the funds are always safe because the complete protection of the U . S . government backs them . We deposit $ 250,000
In EB-5 , when money moves , how it moves , and where it goes is critically important from a timing and audit perspective
for each investor in a bank , and depending on the size of the deposit , we will use three , four , or more banks to ensure its perfect protection .
How is Ampersand helping their clients answer the fund question for the EB-5 investor ? We provide full transparency to the investor and the NCE of exactly where their funds are at all times . We have an online portal should the investor wish to log in and see that , but that continues beyond there . Once the funds are in the NCE , they must move to the Job-Creating Entity ( JCE ), where we can be the dual control co-signatory on the movement of the funds , which the RIA requires .
Many people don ' t remember that a lot of redeployment is still ongoing . With the new rules , there will be less of this , but historically , there have been many redeployments of funds from a project to a bank and then needing to be redeployed again . So , whatever funds are at a bank , we can ensure that they are protected and provide the necessary transparency and reporting .
Is there a difference between escrowing for a full EB-5 investment vs . a partial investment ? We administer the funds , whether they come in partial investment amounts or total investment amounts . It only determines how many banks we would need to spread deposits across . For us , it ' s just part of our standard administration , so it doesn ' t make it harder either way . Partial payment is happening increasingly . Where many investors are investing , it ' s coming in partially until they accumulate the total amount . There ' s no issue there ; it ' s compliant and OK .
Would you like to point out anything particular about the compliance required by the EB-5 visa program ? I was very involved in the design and implementation of the RIA rules . Getting this program back on a great trajectory has been fundamental . I love EB-5 because I ' m an immigrant myself . What EB-5 does for families of investors around the world is to provide a great opportunity . The program should not be subject to bad actors , but it should work in the way it ' s intended : keeping it safe for investors to benefit everybody . I ' m very happy to see how the RIA works .
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