EB5 Investors Magazine Volume 2 Issue 2 | Page 22

Continued from page 19 The funds to be invested should not be able to be viewed as supporting future development or later phases of the project, but must be directly and integrally tied to a project created by the pooled funds held by the enterprise. Likewise, the evidence of job creation needs to be tied to the number of jobs associated with the specific commercial development of the project. In reality, the structure and description of a large-scale hospitality development project that involves the use of pooled investment funds should be expected to generate the evidence necessary for an investor to document the type of at-risk investment in a new commercial enterprise that is required for EB-5 approval. Conclusion The “at risk” discussion offers a direct foil to immigrant investor programs in other countries, where in many cases, the return of the investment is guaranteed. The very elements of investment “at risk” that have caused investors to be cautious of EB-5 have actually proven to be an advantage. The EB-5 program in the United States has avoided all of the vices that caused the halt of the Canadian program. The EB-5 program compels the investors to invest “new money” into mostly privately owned new commercial enterprises, the investment is placed at risk and the return of the funds or a portion of the funds cannot be guaranteed in any form. The funds are invested into job-creating and economic development initiatives. Such a structure mitigates the government’s risks in underwriting 20 the projects and conducting due diligence, leaving the project assessment and due diligence to the private sector. Investment “at risk” and the actual capital commitment are legal safeguards to attract new foreign investment to the United States, allowing the EB-5 program to provide alternative financing to high-risk and low-return privately-owned projects that otherwise may not be funded. ★ Mona Shah Mona Shah has over 17 years of experience in immigration law, with extensive hands-on proficiency in EB-5 law and practice. She has founded major regional centers and has assisted many regional centers and investors in navigating this complex, nuanced, and constantly changing area. Mona’s substantial litigation background includes her representation of clients in courts nationwide. Mona has authored numerous publications and has spoken extensively on EB-5 both in the United States and overseas. Yi Song, Esq. is an attorney at Mona Shah & Associates focusing on EB-5 and securities law. She is also admitted to practice law in New York and People’s Republic of China. She has authored published articles on EB-5 financing and securities law. She practiced tax law in China and has experience in class action securities litigation cases. Yi is a graduate of Georgetown University Law Center in Washington, D.C. Yi Song E B 5 I n v e s to r s M ag a z i n e