commercial enterprise ’ s ( NCE ) decision to rely on GAAP audited financial reporting instead . Much of the current discussion relates to cost , ongoing oversight and subsequent reporting requirements when making a decision as to which option a NCE should utilize ; and
WHAT TO CONSIDER WHEN DRAFTING EB-5 OFFERING DOCUMENTS POST- RIA
Investor roles : Describing the treatment of pre-RIA and post- RIA investors in the same NCE and the structural issues related thereto . Such considerations go well beyond the fact that a NCE might have investing members who have invested at differing investment amounts of potentially $ 500,000 , $ 900,000 and now $ 800,000 investors for projects located in ongoing targeted employment area ( TEA ) eligible projects ;
Sustainment Period : The ongoing interpretive confusion surrounding the definition of “ Sustainment Period ” whether it relates to completion of two years of conditional residency by an EB-5 investor ( which has been the standard for a number of years ) or some other configuration . Such interpretation is especially critical such that a NCE can properly project loan maturity dates and determine whether or not its EB-5 investors would be subject to redeployment ; Promoter compensation : Ensuring that the offering documents include detailed disclosures on all fee based compensation to third party promoters and finders and to the extent the Form I-956F includes a general disclosure of such fees to the relevant RC , the NCE must be sure to amend the EB-5 investor disclosure on a case by case basis so that the EB-5 investor will acknowledge the relevant compensation details that are specific to such sale of membership / partnership units in the NCE ;
Job creation priority : How to allocate job creation allocation priority – would it be on the basis of the Form I-526E petition filing dates , approvals thereof , start of conditional residency , filing of the Form I-829 petition or approvals thereof ;
Risk factors : Given the current high demand for rural projects , preparing relevant risk factors that are unique to projects located in rural areas irrespective of the underlying project ’ s asset class ;
Related to the risk factor disclosure , the Form I-956F requires that the NCE specifically cite to the specific portions of the offering documents detailing all relevant risk factors that EB-5 investors would be exposed to following investment in the NCE ;
Wait time : Disclosing ongoing uncertainties related to processing times for Form I-526E petitions and related and subsequent investor filings thereto ; Subscription Agreement : The need to completely update the Subscription Agreement to provide for the Subscriber ( EB-
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