The most noteworthy changes to the EB-5 Regional
Center Program through this Act would have been significant increases in the amount of capital necessary to invest in
the United States and to file an EB-5 petition, limitations
on the immigrant investors who can apply, new provisions
requiring compliance with U.S. Securities laws, limitations
on the sources of funds for investment, the creation of an
EB-5 integrity fund, and the redefinition and substantial
restriction of ‘targeted employment areas.’
Premium and Timely Processing:
Under the Immigrant Investor Pilot Program, a qualified
EB-5 regional center investor was required to submit a
$6,230 filing fee for the I-924 petition. Under the proposed
Act, this filing fee would be increased by $10,000—making
the new filing fee $16,230, in addition to the increase in the
minimum capital for investment in the regional center.
Premium Processing would be available, for the first
time, for the expeditious processing of immigrant investor
petitions for a $1,000 fee, subject to adjustment.
In addition to the filing fee payments, each regional center
petition would also be required submit a $2,000 integrity
fund fee.
Limitations on Who Can Apply:
In general, any individual wishing to participate as an
investor under the Regional Center Program proposed in
this Act would be required to pass a background check to
verify that they do not have any criminal or civil violations
involving deceit within the previous ten years, any civil
violations resulting in a liability in an excess of $1 million-
involving fraud or deceit, or a crime resulting in a conviction
with a term of imprisonment of more than one year.
Any person subject to a final order of a State securities
commission or the SEC, or another similar body, based on a
violation of any law or regulation that prohibits fraudulent,
manipulative, or deceptive conduct, or bars the person from
association with an entity regulated by such as commission,
engaging in the business of securities, insurance or banking
would not be eligible for admission.
Finally, any person who has engaged in the trafficking of any
illicit or controlled substance, espionage, sabotage, intellectual
property theft, money laundering, terrorist activities, facilitating human trafficking and human rights offenses, or violation
of any regulations regarding foreign financial transactions
would not be eligible for admission.
The Secretary would retain the authority to suspend or
terminate the designation of any regional center, or participation under this program, of any new commercial enterprise
or job creating entity that knowingly engages a person in
violation of the program based on the aforementioned bars
to eligibility.
Compliance with Securities Laws:
The United States has jurisdiction over the purchase or sale
of any security offered or sold by any regional center or any
party associated with a regional center. A regional center and
affiliated parties would not be precluded from offering or
selling a security pursu ant to Regulation S under the Securities
Act to the extent that the offering or selling is in compliance
with the regulation.
Participating regional centers would be required to
provide certifications that, after a due diligence investigation,
determine that the regional center is in compliance with the
securities laws of the United States, and has implemented
policies and procedures internally to ensure its continued
compliance with those laws. Regional centers would be
required to reissue this certification annually.
Where regional centers have violated securities regulations,
the certifier for the regional center would describe the
noncompliance and the actions taken to remedy the noncompliance. The Secretary would then maintain the discretion
to suspend or terminate the regional center’s designation, or
impose sanctions.
Effective Dates:
Effective upon the date of enactment, the amount of capital
necessary to invest in a regional center project in a targeted
employment area (previously $500,000) would be increased to
$800,000, and $1 million for non-targeted employment areas.
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