EB5 Investors Magazine Volume 6, Issue 1 | Page 36

Creative Marketing Methods for Raising EB-5 Capital Within the United States

With the growing competition for capturing the attention of potential EB-5 investors already in the country, capital seekers will need to strategically plan how to best reach this market through campus seminars, targeting existing H-1B holders and give presentations to wealthy groups of tourists.
By Mike Xenick and Dominick Mondesir

The evolution of the EB-5 transactional process continues to develop, becoming more complex due to the limited number of EB-5 investors and the ever-increasing supply of quality EB-5 projects. The ability of developers, sponsors, issuers and regional centers to quickly raise desired levels of EB-5 capital will need to become more acute due to the fierce and growing competition in the industry and the ever-growing retrogression challenges that face EB-5 investors from China.

Typically, EB-5 groups have exclusively relied on the Regulation S exemption utilizing foreign finder / agents to raise EB-5 capital strictly offshore from non-U. S. residents. While this is the industry norm and has worked for decades, the challenges noted above and the very divisive issue of immigration in general right now under the Trump administration have created an immediate need to target new( non- Chinese) markets and the introduction of creative marketing methods for raising EB-5 capital. Let’ s highlight how EB-5 groups effectively and legally can raise EB-5 capital directly from non-resident aliens in the U. S., including those on alternative H and F visas.
VEHICLE TO RAISE EB-5 CAPITAL WITHIN THE UNITED STATES
In order to be compliant with U. S. securities laws, the most effective avenue for EB-5 groups to market and solicit EB-5 securities within the U. S. is through a registered, licensed and experienced U. S. securities broker-dealer( BD) in good standing with SEC and FINRA. To accomplish this, nonbroker-dealer groups may: purchase an already existing BD;
"... There are approximately 750,000 Indians on H-1B visas in the U. S. who are stuck in EB-2 or EB-3 backlogs..."
affiliate themselves with a BD; seek their own BD registration; or use the services of an established BD within the EB-5 industry. BDs have served a critical purpose for the last 85 years in the U. S. capital markets, owing a duty of independent due diligence on projects and professional determination of suitability of EB-5 investors for each respective investment a BD represents. As BDs are registered with the SEC and are members with FINRA, they are accountable to FINRA to protect the interests of EB-5 investors, whether the investors are actual clients of the BD or not.
Marketing your EB-5 project successfully within the U. S. requires a BD to conduct extensive due diligence on the principals and management team associated with each offering and independently verify all information in the project offering documents. It also requires them to review all marketing materials, including websites, presentations, project brochures and project teasers for compliance with U. S securities laws and ensure the information agrees with other information contained in the offering documents.
Also, a BD must ensure the individuals or employees of the BD soliciting / offering your EB-5 transaction to prospective EB-5 investors hold the appropriate securities licenses at the firm and have a proprietary onshore network and comprehensive marketing plan to effectively market your project.
Registered representatives involved in the origination, structuring, execution, solicitation, subscription and funding of an EB-5 transaction are required by law to hold FINRA series 79 or 7, 82 & 63 securities licenses. Additionally, BD principals must devise and implement FINRA-compliant written supervisory procedures for their registered representatives to follow,
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