EB-5 for Colleges and Universities

On August 11, 2016, USCIS published new processing times for I-829 petitions. The news is not good for EB-5 investors. USCIS is now taking in excess of 21 months to adjudicate I-829 petitions. This means that EB-5 investors may wait more than one or even two years for final approval of an I-829 from USCIS. The delays are unconscionable.

For those less familiar with EB-5 terminology, the term I-829 refers to the form number of the petition that an EB-5 investor files within 90 days of the expiration of his or her conditional green card status. An investor’s I-829 is supported by proof that, among other things, there has been sufficient job creation to support his or her green card case. At the I-829 stage of the process, an investor must also evidence that his or her investment has been sustained. For thousands of investors, what should be a relatively ministerial process of verifying facts has turned into a bottleneck. Continue Reading I-829 Delays Reach All-Time Record: Thousands of EB-5 Investors in Limbo at USCIS

There is speculation on the Hill that lawmakers will not take on reforming or improving the EB-5 Program until January 2016. But don’t think for a second that lawmakers will simply pass an extension of the Program and indefinitely shelve refashioning EB-5. Last month, the General Accounting Office (GAO) published a report on the Program (Immigrant Investor Program: Additional Actions Needed to Better Assess Fraud Risks and Report Economic Benefits). Congress is reading this report, which is a 58 page “gotcha” on EB-5. With recent SEC actions targeting EB-5 fraud, the EB-5 industry is at a point of inflection. Continue Reading GAO Report on EB-5 a Possible Blueprint for Lawmakers and New Legislation

There is some interesting but overlooked news on the EB-5 front.

In a letter to a broker-dealer dated August 26, 2013, FINRA (Financial Industry Regulatory Authority) confirmed that the suitability rule (Rule 2111) applies to FINRA members making investment recommendations to foreign nationals in connection with the EB-5 Investor Visa Program. This guidance has sweeping implications for broker-dealers that market securities in connection with EB-5 projects. Broker-dealers interested in marketing securities for EB-5 projects now have interpretive guidance on their obligations regarding the applicability of the suitability rule when advising foreign investors. This is the first substantive guidance that FINRA has issued in connection with the EB-5 program.  If you are a broker-dealer and interested in marketing EB-5 securities to foreign investors, you need to understand this guidance and how it applies to your obligations in an EB-5 private offering. Continue Reading FINRA provides guidance on immigration due diligence to broker-dealers in EB-5 offerings

Universities and colleges seeking to start commercial ventures should consider raising capital through the EB-5 program. If you are a university or college and you are considering building a new student union or a stadium as a for-profit venture, EB-5 financing may be a practical option for you. The EB-5 program could also be used to fund a technology licensing enterprise to commercialize new innovations, or to finance an incubator for emerging businesses.

What is the EB-5 program?

USCIS administers the EB-5 Immigrant Investor Program, which was created by Congress in 1990 to stimulate the U.S. economy through job creation and capital investment by foreign investors. Under a pilot immigration program first enacted in 1992 and regularly reauthorized by Congress, certain EB-5 visas also are set aside for investors in Regional Centers designated by USCIS based on proposals for promoting economic growth. Foreign investors may secure permanent residence status through the EB-5 program.

What are the core requirements of the EB-5 program? Continue Reading EB-5 Funding: A Possible Financing Option for Commercial Ventures Undertaken by Colleges and Universities