RCBJ Retrospective: A Proven Compliance Platform will be Key to EB-5 Success in 2016

    Proven Compliance

    Last year’s EB-5 media was dominated by negative stories and talk of program reform leading up to the last program sunset date. Proposed reforms were put forth in several draft bills, notably including S.1501 – American Job Creation and Investment Promotion Reform Act of 2015, the draft legislation based on S. 1501, S.2415 – EB-5 Integrity Act of 2015, and H.R. 4530 – EB-5 Integrity Act of 2016.

    The different drafts of proposed legislation contained many controversial items, such as how to define a Targeted Employment Area (TEA) or when the proposed changes would go into effect; however, the legislative drafts also contained many undisputed provisions related to integrity and compliance. On these points, the industry largely agreed and the drafts remained largely consistent. As such, the draft legislation provides a preview of changes in the EB-5 program that will inevitably become law. The EB-5 industry will likely have to adapt to and accept these changes, particularly in reference to new or enhanced compliance or integrity requirements for Regional Centers and their projects and companies. The enhanced integrity provisions include extensive annual reporting requirements and certifications, agent monitoring, and background checks for Regional Center principals/owners, among other requirements.

    Enhanced integrity measures are good for all industry stakeholders, but, it’s only good if the project, and by extension the Regional Center for that project, implements appropriate measures to ensure compliance. The stakes are high. Noncompliance could result in a Regional Center’s designation being terminated and an investor’s immigration petition being denied and investment being lost. Noncompliance by a Regional Center negatively impacts all involved parties.

    The past standard for maintaining compliance is no longer going to be good enough.

    Some key compliance components that Regional Centers will need to focus on moving forward include:

    Ability to pass a USCIS audit – With or without legislative mandate, the USCIS will begin performing site visits to Regional Centers to audit their compliance with the law. For a successful audit, the Regional Center needs to maintain accessible records, including evidence of job creation, amount and use of foreign capital invested, agreements/contracts with promoters, and evidence of policies/procedures in place to ensure compliance with securities laws.

    Ability to meet the annual filing requirements – The proposed legislation includes much more comprehensive annual reporting than the industry has seen in the past. The Regional Center would still be required to report the details of foreign capital infusion and use for job creation, but they’d also be required to provide annual certifications that no one involved with it or its associated companies has been convicted of criminal or civil fraud or violated securities or banking laws or various other criminal or civil offenses.

    The RC would also be required to provide for each New Commercial Enterprise:

    • Accounting of aggregate foreign capital in each project
    • Description of capital being used
    •  Evidence that 100% has been committed to the project
    • Detailed evidence of progress
    • An accounting of aggregate direct jobs created/preserved
    • To the best of the Regional Center’s knowledge, for all fees collected from investors in connection with the Regional Center, New Commercial Enterprise, and Job Creating Enterprise, including loan management fees:
      • Description
      • Accounting of entities received, including promoter, finder, broker-dealer
      • Purpose
    • Material changes to investment or offering documents
    • Certification that the statements are accurate after due diligence

    The USCIS has already taken steps to enhance its compliance oversight over Regional Centers and projects before any legislation is enacted. These include:

    • More than doubling staff in the Fraud Detection and National Security Unit
    • Creating new Regional Center Compliance Unit
    • Developing audit program to increase Regional Center oversight
    • Announcing commencement of interviews of I-829 petitioners, requiring Regional Centers and projects to provide updated information to the USCIS

    The Regional Center would certify that each person involved is a U.S. national or lawful permanent resident; no foreign government entity provided capital to or was directly involved with the ownership or administration of the Regional Center; neither the Regional Center nor anyone associated with it is barred from offering securities; and all parties associated with the Regional Center remain in compliance with securities laws.

    Financial strength of the RC – Under proposed laws, cost of owning a Regional Center is going to increase significantly. In addition to the cost of the additional back-office reporting and recordkeeping, Regional Centers will be forced to fund the incremental efforts of the USCIS, including site visits, by paying considerable annual fees. For groups who operate Regional Centers in multiple states, cost on an annual basis will be substantial. Failure to meet the financial obligations will result in the Regional Center being terminated.

    While this is a significant increase in the compliance obligations, it serves to bring EB-5 closer to the standards imposed on the management of more traditional fund industries, such as Private Equity and hedge funds. EB-5 is growing up, and going forward, we can expect to see even more consistency in the oversight of this program and other financial industry sectors.

    Just like these other sectors, Regional Centers will need procedures in place to collect information across multiple areas of operation for accurate reporting. They will need to be prepared to institute procedures for continual monitoring of their securities offerings, promoters, and associated businesses to enable timely fulfillment of their annual reporting requirements. Regional Centers will no longer be able to fulfill compliance requirements with a burst of activities come year end.

    The model Regional Centers will seek out compliance experts to help establish compliance policies/procedures in accordance with expected legislation and will also have implemented systems to accurately track and maintain required information long before any change in legislation takes effect. Best practices will lead them to implement a state-of-the-art, technology-enabled compliance platform.

    These increased compliance standards serve to protect all stakeholders and, in particular, investors. Aligning the compliance standards of the EB-5 industry around proven models in other sectors and focusing on protecting the investor is a good thing for EB-5.


    IIUSA Welcomes Cleveland International Fund to the President’s Advisory Council

    PACIIUSA is pleased to welcome Cleveland International Fund to the President’s Advisory Council (PAC).

    Members of the President’s Advisory Council help formulate IIUSA’s core initiatives in government/public affairs, participate in deliberations on both internal and external association policy issues, and are kept abreast of important industry developments on a predictable schedule that includes real-time updates.

    To review the full list of President’s Advisory Council members and learn more about benefits of joining, click here

    PAC Members


    NES Financial Publishes White Paper-Navigating a Changing EB-5 Sector: Data Insights

    NES WP

    How have quota backlogs for Chinese-born investors impacted EB-5 investor markets? How has project distribution shifted in the last year? What are the hottest sectors for EB-5 projects now? How did pending legislation impact EB-5 market growth?

    The second annual NES Financial Navigating the EB-5 Market: Data Insights white paper answers these questions and more with exclusive insights into continued EB-5 market growth, USCIS adjudications and backlog, shifts in investor markets, trends in project distribution, and project and funding data.

    Download Now!  


    IIUSA Updates TEA Mapping Tool with Most Recent Census Data

    IIUSA is pleased to present an updated version our interactive mapping tool, which utilizes the most up to date Census data, that plots the location of over 470 EB-5 projects from a wide variety of industries and located in diverse communities across the U.S. The mapping tool will be an essential tool for industry and policy analysis. The interactive map is a tool for consideration of a specific proposal to reform Targeted Employment Area (TEA) policy. IIUSA created the interactive mapping tool for members and industry stakeholders to use as a tool to help inform a meaningful discussion and consideration of the TEA proposal presented in a hearing before the Senate Committee on the Judiciary on April 13, 2016 by Dan Healy, CEO of Civitas Capital Group, and Director at IIUSA. Further details on the proposal can be found on pages 11-14 of the written testimony.

    Both Congress and U.S. Citizenship & Immigration Services have stated intent on reforming the EB-5 Regional Center Program including TEA policy, making it essential to long term reauthorization of the Program. Whether reform occurs via legislation or regulation, designing effective policy requires clear information and data showing anticipated results from the implementation of new policy – especially on a multi-billion dollar industry like EB-5 that relies on predictability and certainty to achieve the policy goals of job creation.

    Explore Now!

    TEA Map


    USCIS Announces EB-5 Stakeholder Engagement for Thursday, July 28th

    Globe'U.S. Citizenship and Immigration Services (USCIS) announced that its next EB-5 stakeholder engagement will be held in person in Miami, FL on Thursday July 28th, from 1:00 to 2:30pm (Eastern). This engagement is part of USCIS’s ongoing efforts to enhance dialogue with our stakeholders in the program, also known as EB-5.

    During the first part of this engagement, USCIS officials will provide EB-5 program updates. The second part will be a question-and-answer session. We invite you to ask non-case specific questions or provide feedback on the EB-5 program. Participation detials from USCIS can be found below:

    Participation Details:

    You may attend this engagement either in person at the USCIS Miami District Office or by teleconference.

    • Visit our registration page
    • Enter your email address and select “Submit”
    • Select “Subscriber Preferences”
    • Select the “Event Registration” tab
    • Provide your full name and organization, if any
    • Complete the questions and select “Submit”

    If you wish to attend in person, please indicate so in your subscriber preferences when selecting your method of attendance. Please note that seating is limited, so we encourage you to register early.

    Once we process your registration, you will receive a confirmation email with additional details.

    To submit non-case specific questions before the engagement:

    If you have any questions regarding the registration process, or if you have not received a confirmation email within two business days, please email us at the same address.


    U.S. Department of State Issues July Visa Bulletin Cutoff Date Remains Unchanged for Mainland China

    The U.S. Department of State – Bureau of Consular Affairs released its Visa Bulletin for the month of July 2016 (View PDF). The bulletin revealed a cutoff date February 15, 2014 for Mainland-China born visa applicants. The cutoff date remains unchanged from the June bulletin.

    As of July 1, Chinese investors who filed their I-526 petitions before February 15, 2014 will be eligible to schedule interviews with Department of State Consular offices and be issued conditional immigration visas to enter the U.S. or apply for adjustment of status if they are already in the U.S.

    Action dates for other countries remain current, allowing qualified applicants from other parts of the world to move forward with obtaining their EB-5 visa.

    United States Department of State Bureau of Consular Affairs July 2016 Visa Bulletin

    july visa bulletin


    Join IIUSA at the 2016 SelectUSA Investment Summit!

    Select USAIIUSA is proud to be an exhibitor at this year’s SelectUSA summit the premier event dedicated to promoting foreign direct investment (FDI) in the United States.

    This year’s Summit theme is “The Innovation Advantage” and will showcase investment opportunities from every corner of the United States for global investors. Participants will find the practical tools, information, and connections they need to move investments forward. We welcome investors of all sizes, including established multinationals, small or medium-sized enterprises, and high-growth startups. The United States is incredibly diverse, and the Summit brings that diversity together into one building: any company can find the people, the resources, and the market it needs to be successful.

    The SelectUSA Investment Summit is the highest-profile event dedicated to promoting foreign direct investment (FDI) in the United States. This signature event provides an unparalleled opportunity to bring together companies from all over the world, economic development organizations from every corner of the nation, and other parties working to facilitate business investment in the United States. Featuring senior government officials, C-Suite business executives, and other thought leaders, each summit focuses on a timely theme related to the U.S. investment environment, industry trends, and new opportunities.

    Learn More 


    Advertisements for RCBJ Q2 Issue Due Next Friday!

    RCBJ Header

    Advertisements for the Q2 Issue of the Regional Center Business Journal are being accepted through Friday June 24th!

    As a valued IIUSA member, we hope you have found IIUSA’s quarterly publication, The Regional Center Business Journal (the “RCBJ”), to be your primary source for EB-5 industry news, in-depth analysis and strategic market insights.

    This is the final call for advertising in our Q2 edition of the RCBJ, which are due by next Friday June 24th. Click here to view IIUSA’s Media Kit with ad specifications.

    Article topics in the Q2 issue include:

    • Forging industry consensus to build a lasting engine of economic impact through advocacy, education, and self-regulation
    • Return of capital and redeployment
    • Preparing for site visits and audits
    • Third-party control of funds
    • SEC actions/receiverships
    • Job creation formulations
    • Intercreditor agreements
    • Fee increase analysis
    • An much more!

    If you would like to have your company’s advertisement viewed by a targeted audience of over 10,000 EB-5 industry professionals including project sponsors, Regional Center operators, attorneys, consultants, economists, foreign intermediaries and potential investors, reserve your ad today!

    RCBJ Graphic

    Advertising Rates

    Ad Rates

    *Only IIUSA Members are eligible to purchase advertisement space in the Regional Center Business Journal. All sales are final, non-transferable and non-refundable.

    The RCBJ reflects IIUSA’s dedication to ensuring our members and the public are well-informed about the latest EB-5 Regional Center industry news and trends, while highlighting the successful regional economic development and U.S. job creation occurring all across the country thanks to the EB-5 Regional Center Program.

    With articles written by experts from across the IIUSA membership and curated by iEditorial Committee, the RCBJ’s offer EB-5 stakeholders comprehensive and up-to-date information on a
    wide variety of industry topics divided into the following sections:

    • Advocacy/Government Affairs
    • Education/Research
    • International Perspectives
    • Membership Information

    No matter what role one plays in the EB-5 industry, the RCBJ is designed to keep them informed. In addition to being shipped in hard copy all over the world, the Journal is available digitally in mobile/tablet friendly formatting. To review all 12 previous issues of the RCBJ, click here.

    Advertising in the Regional Center Business Journal


    Advertising in IIUSA’s quarterly Regional Center Business Journal provides you with the necessary exposure to build, enhance, and maintain your brand by opening doors to business relationships with key individuals within the EB-5 Regional Center industry.

    Your advertisement will be viewed by a targeted audience of EB-5 industry professionals including project sponsors, Regional Center operators, attorneys, consultants economists, foreign intermediaries and potential investors Other recipients of the Regional Center Business Journal include federal, state, and local (county/city) government offices, including Congressional Offices, from across the U.S.

    We hope your company will consider advertising with IIUSA in Q2 and throughout 2016. Should you have any questions, please feel free to us directly at info@iiusa.org.


    IIUSA Welcomes New President’s Advisory Council Members

    LeaderMembers of the President’s Advisory Council (PAC) help formulate IIUSA’s core initiatives in government/public affairs, participate in deliberations on both internal and external association policy issues, and are kept abreast of important industry developments on a predictable schedule that includes real-time updates.

    IIUSA is pleased to welcome three news members to the PAC Torres Law P.A., Wright Johnson LLC and Hollywood International Regional Center.



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    Become an IIUSA Program Champion Today!

    Now you have the opportunity to be recognized as an IIUSA Program Champion – in addition to earning up to 50% off membership dues – for referring partners, clients or other EB-5 industry participants who are not yet IIUSA Members to join the association. For example, to reach the President’s Advisory Council ($30,000 contribution) a company can now allocate referral credits to cover portions that they do not pay themselves…Learn More



    CDFA Announces Agendas for Summer School!

    Summer School

    Council of Development Finance Agencies (CDFA) Summer School
    Register Today!

    Early Bird Rates Expire July 8, 2016

    CDFA Summer School is a week long series of courses presented by the CDFA Training Institute. Held the week of August 8-12, CDFA Summer School will offer five different training courses at the Renaissance Baltimore Harborplace Hotel in downtown Baltimore, Maryland.

    These courses qualify for the CDFA Training Institute’s Development Finance Certified Professional (DFCP) Program. Participants may register for one, two, or three courses during CDFA Summer School. Complete three courses, and you will have fulfilled half of the requirements for the DFCP Program. Join us in Baltimore, and start down the road to personal and professional advancement today.

    During CDFA Summer School, the following sessions will be covered:

    • Fundamentals of Economic Development Finance: Understanding Development Finance & the Toolbox, Bedrock Tools, Targeted Tools, Investment Tools, Access to Capital Lending Tools, Federal Support Tools, and Implementing the Development Finance Toolbox.
    • Intro Bond Finance Course: Why Bond Financing?, The Basics of Bond Finance, The Partners Involved, Types of Tax-Exempt Bonds, Issuing Bonds – The Rules, Structuring the Deal, and Bond Financing Case Studies.
    • Advanced Tax Increment Finance Course: Understanding Your TIF Statute, Model TIF Policies, Guidelines, and Procedures, TIF and the Capital Markets, Performance Monitoring & Managing Active TIF Districts, TIF Feasibility Analysis and Underwriting, TIF and the Project’s “Capital Stack”, and Case Study.
    • Intro Tax Credit Finance Course: Introduction to Tax Credits, Historic Preservation Tax Incentive Program, Low-Income Housing Tax Credit Program, State Tax Credit Programs for Economic Development, New Markets Tax Credit Program, and Tax Credits in Combination with Other Tools.
    • Advanced Bond Finance Course: Market Update, Who Buys Bonds?, Credit Enhancement, Refundings, Negotiating Professional Fees, Regulatory Update, Arbitrage, Rebate, and Calculating Yield, Interest Rate Swaps, and Leveraging Resources.

    Learn More