As previously discussed this Fall, Inspector General Investigations and whistle-blower driven reviews by Congressional Oversight Committees are very commonplace in Washington, D.C. The nomination of Alejandro Mayorkas, the current Director of the USCIS at DHS and the presidential nominee to assume the Deputy Secretary position at DHS, now seems to be more complicated than a typical investigation and it does appear to be having an impact on the EB-5 Regional Center Program. Why? There seem to be many factors at work here.
One significant factor is the highly charged partisan political environment. There is a level of suspicion and distrust between the parties and particularly between the Republican Party and the Obama Administration that we just haven’t experienced before. This has resulted in even more heightened scrutiny of Mr. Mayorkas’ nomination. Indeed, the Inspector General who is conducting the internal investigation of Mr. Mayorkas is himself under review and is the subject of allegations of favoritism.
The recent change in the Senate confirmation procedures for Administration nominees pushed through by the Democrats – the so-called “nuclear option” – eliminating the filibuster, has also heightened the partisanship on Capitol Hill.
Therefore, Mr. Mayorkas continues to face allegations of misusing and unduly influencing USCIS/DHS in the EB-5 Regional Center visa program. This was once again underscored in the November 2013 confirmation hearing of Jeh Johnson, President Obama’s nominee to head DHS and the December 11, 2013 second confirmation hearing for Mr. Mayorkas. During both hearings, the nominees were asked numerous questions about the EB-5 program and Mr. Mayorkas’ role as well as the status of the IG review. Both nominees have cleared the Senate Committee confirmation process – Mr. Mayorakas on a purely partisan vote. Both nominees appear headed for full confirmation by the Senate under the newly revised Senate procedures that merely require a majority vote.
It appears that the heightened scrutiny of Mr. Mayorkas has impacted the normal processing of cases at USCIS and has had a negative impact on those cases that have already be approved for expedited processing. Nonetheless, even with all the hoopla, we believe that the normal procedures should be followed and that the key to a successful and smooth EB-5 process with USCIS is to have a solid case that meets the latest regulatory and advisory guidance. Please see enclosed link for an article Greenberg Traurig has published on expedite requests. http://www.eb5insights.com/2013/05/13/anatomy-of-a-successful-eb-5-expedite-request/
Whatever the current policy and political motivations maybe surrounding the investigations at USCIS and DHS, the EB-5 community should just push forward. The investigations will come to an end and there is a lot of good work to do for Regional Centers and projects involved with EB-5 investment and investors.
Greenberg Traurig Immigration attorney, Ali Brodie, recently returned from China where she gave EB-5 presentations and met with EB-5 investors in both Beijing and Shanghai. She accompanied regional center clients and immigration business consultants to assist in providing legal advice on the I-526 application process to potential investors as part of the services Greenberg Traurig offers to clients on the ground in China. Additionally, she worked with Dawn Zhang and her EB-5 team, including Echo Gao and Jennifer Yu, from the GT Shanghai office and met with investor clients.
MY OBSERVATIONS: China is the world’s largest EB-5 market. The Chinese maintain a robust interest in the EB-5 program, with particular attention to regional center projects that are affiliated with a U.S. municipality and/or in the national interest. With the multitude of projects being marketed in China, investors are doing their own due diligence and are tremendously appreciative of the opportunity to interact with U.S. EB-5 immigration attorneys. There is also growing curiosity regarding the Direct EB-5 (Individual EB-5) program for entrepreneurial Chinese nationals favoring establishment of their own business in the United States.
GT Immigration attorney Kate Kalmykov will serve as a co-panelist at an EB-5 Immigrant Investor Panel and Luncheon entitled “Putting Together the Pieces of EB-5” on December 18th from 12:00 – 2:00 p.m. at the Greenberg Traurig New York Office. Co-panelists include Andy Feinberg of Ackman-Ziff and Genevieve Roman of Extell New York Regional Center, with Jason Gordon of Fidelity National Title as moderator. Topics of discussion include:
- Timelines for Designation and Project Pre-Approval
- Option to Rent a Regional Center
- Comparison of Financing Options
- Suitability for New York
Greenberg Traurig New York Office
200 Park Avenue
New York, NY 10166
To RSVP to this event, please email at GTNYEVENTS@gtlaw.com and indicate if a kosher or vegetarian meal is needed.
2.0 Ethics hours of CLE Credit Pending
The MetLife Building is located on 45th Street between Lexington and Vanderbilt Avenues or via the escalators in Grand Central Terminal. To assist with building security, please RSVP in order to have your name at the security desk. All guests must check in at the Visitor Center on the mezzanine level. Please bring a photo ID and allow yourself time to get through security.
There seems to be a lot of confusion in the marketplace about who needs to be an accredited investor within the framework of the U.S. securities laws. Within the United States, EB-5 offerings rely on an exemption from registration with the Securities and Exchange Commission that limits the investor pool primarily to “accredited investors,” as that term is defined in Rule 501(a) of Regulation D under the Securities Act of 1933 (the “Securities Act”). This exemption is found in Rule 506 of Regulation D under the Securities Act.
Outside the United States, EB-5 offerings need not be offered or sold to any accredited investor. Rather, the EB-5 offerings need only be made in compliance with applicable foreign securities laws and Regulations S under the Securities Act. Regulation S requires that each investor satisfy the following criteria: (i) the investor is not a “U.S. Person” (defined, in part, to mean any individual that is not a permanent resident of the United States) and is not acquiring the securities for the account or benefit of any “U.S. person”; (ii) both at the time the investor is offered (or offers) to purchase the subject securities and at the time the investor executes and delivers his or her subscription agreement to purchase those securities, the investor is physically located outside of the United States; and (iii) the investor agrees not to engage in hedging transactions with respect to the securities purchased unless in compliance with the Securities Act.
Accordingly, an issuer of securities need not limit the offer and sale of securities to accredited investors if that offer and sale satisfies the requirements of Regulation S. It is good practice to design and conduct the offer and sale of securities to comply with both Regulation S and Rule 506 of Regulation D of the Securities Act to maximize the pool of available investors for your project.
U.S. Citizenship and Immigration Services (USCIS) announced today that revised versions of the I-526, Immigrant Petition for Alien Entrepreneur is now available for use.
The I-526 form is the actual application on which an investor self-petitions for an EB-5 visa. While many in the immigration and EB-5 stakeholder community have submitted comments to the USCIS regarding proposed changes to the form, the revised I-526 form only has minor changes which differentiate it from the previous version. These changes include space for the petitioner to write in his or her Passport Number, Travel Document Number, and Expiration Date, in Part 1. Space has also been added in Part 7 for the petitioner to write in his or her Mobile Phone Number and Email Address. Interestingly, the form still does not require that the investor list the name of his or her dependents or the regional center under which they are investing into the New Commercial Enterprise (Fund). The lack of ability to include dependents on the I-526, as is done with other immigrant applications in other immigrant visa categories, often results in delays once the petition is approved, with having the National Visa Center who processes the subsequent immigrant visa applications generate fee bills for dependent spouses and children.
Please be aware that after December 16, 2013 the old version of the I-526 will no longer be accepted, so investors and agents must make sure that they are using the correct version to avoid a kickback from the USCIS.
Please contact your GT EB-5 attorney with any questions.
Greenberg Traurig, LLP will host the ninth event of the 2013 National EB-5 Finance Seminar Tour in Miami on Tuesday, November 12th. The seminar will expose participants to a unique alternative financing opportunity for projects that lend themselves to the EB-5 immigrant investor program. The seminar includes a panel of attorneys in Greenberg Traurig’s Business Immigration & Compliance practice and will feature several guest speakers, including: Reid Thomas, Executive Vice President of NES Financial; Thom Casebolt, Director of The EB-5 Resource Group, LLC; and Jeffrey B. Carr, President & Economist, Economic & Policy Resources, Inc.
To register for this complimentary event, please email Kate Kalmykov at firstname.lastname@example.org.
We are pleased to announce that the Immigration Practice of international law firm Greenberg Traurig, LLP earned a first-tier ranking from the U.S. News-Best Lawyers 2014 Best Law Firm rankings for Nationwide, as well as the Washington, D.C. and Miami metropolitan areas. The Immigration Practice has consistently been ranked in the first-tier for the past few years. According to the publication, achieving a high ranking is a special distinction that signals a unique combination of excellence and breadth of experience.
For the third consecutive year, Greenberg Traurig has received the most overall first-tier rankings and the most first-tier metropolitan rankings. Additionally, the firm is one of the top 20 firms with the most first-tier national rankings in the United States. To read a firm-issued press release announcing the rankings, please click here.
Navigating the geographically specific difficulties of the EB-5 process can be particularly tricky for Investors in the Middle East. Domestic policies such as currency remittance limits and free trade zones, as well as United States trade restrictions, are some of the most common difficulties that Middle Eastern investors may face. Below is a discussion covering key issues facing Middle Eastern investor and the ways that Greenberg Traurig, LLP can help guide the investor toward pursuing a successful EB-5 investment.
- Office of Foreign Assets Control General Licenses for Iranian EB-5 Applicants. Iranians have historically constituted a large proportion of the EB-5 investors coming from the Middle East. Nevertheless, the economic embargo that the United States has imposed on Iran presents unique difficulties for any Iranian national looking to invest in the United States through the EB-5 program. Up until recently any Iranian investors have had to apply to the Office of Foreign Assets Control (OFAC) for an investor specific license authorizing them to invest money in the United States. However, an executive order issued in October 2012 authorized OFAC to issue general licenses to Iranians wishing to invest their money in the United States through the EB-5 program. This change has reduced processing time for Iranian investors, but these investors should still be aware of the requirements that must be met in order to be approved for the license and to invest in the United States. The immigration team at GT includes seasoned OFAC professionals equipped with a knowledge base that allows them to successful guide their clients through the OFAC license application process.
- Office of Foreign Asset Control Licenses for Syrian EB-5 Applicants. Syrians, much like Iranians, are required to obtain a license through OFAC in order to invest in the United States through the EB-5 process. However, unlike Iranians, Syrian investors must still apply for specific licenses in order to invest in the United States. The OFAC professionals on GT’s immigration team can Syrian investors in this area.
- Currency Restrictions in India and the Impact on EB-5 Investments. In an attempt to restrict outflow of the Rupee, the Indian Government has reduced the limit for remittances made by resident individuals from $200,000 to $75,000. While this does not preclude an Indian investor from investing in the United States through the EB-5 program, it can certainly create added headache for an Indian citizen hoping to exchange his or her money for US dollars to invest in the United States. In addition, the process used to exchange Rupees for U.S. Dollars will need to be documented to show lawful source of funds. GT has extensive experience dealing with these types of currency restrictions, and can help Indian investors in documenting their source of funds.
- Transfer of Funds to the U.S. from Certain Middle Eastern and North African Countries. Some Middle Eastern and North African countries have imposed restrictions on the export of currency to avoid currency flight during times of economic turmoil. Many times Investors that live in countries with these restrictions utilize the Hawala system to secure the funds necessary for their investment. In the simplest terms, the Hawala system consists of a system of brokers who will receive funds in the Investor’s native currency, and then exchange them for US Dollars in another country to facilitate the export of funds required for overseas investment. GT’s immigration team can advise Investors using Hawala systems on how to document source of funds for compliance with EB-5 requirements.
- Free Trade Zones. When the investor’s residence or business is located within a free trade zone—as is the case in some Middle Eastern countries—personal and business tax records are often unavailable. GT’s immigration team advises investor located in these free trade zones on the best practices for documenting lawful source of funds in the absence of tax filings.
For a PDF version of the above text, please click here.
EB5Investors Magazine has profiled four attorneys from Greenberg Traurig, LLP in its list of the “Top 25 Immigration Attorneys in the EB-5 Industry.” Kate Kalmykov, Steve Anapoell, Genna Garver and Jennifer Hermansky were selected by industry stakeholders, investors and attendees of the 2013 Southern California EB-5 Conference, according to the publication’s website. The same edition of the magazine includes a feature story on Immigration Practice Co-Chair, Laura Reiff.
To read the feature article and attorney profiles, please click here.
GT would like to remind our regional center clients to submit their I-924A annual compliance filings on or before December 29, 2013. The I-924A is used to demonstrate a Regional Center’s continued eligibility for the Regional Center designation granted by the United States Citizenship and Immigration Service (USCIS).
Each designated Regional Center must file the form within 90 days after the end of the fiscal year to report its activities between October 1, 2012 and September 30, 2013. Filing the I-924A timely is critical for center’s to be considered complainant and remain eligible. As of November 2010, the failure to file within the requisite time period can result in an EB-5 Regional Center’s termination by the USCIS.