Note: This is a guest blog from JTC Americas, the leading provider of fund administration services to the EB-5 industry.
Since the passage of the EB-5 Reform and Integrity Act (the “RIA”) in March, Regional Centers have scrambled to understand the new requirements that the legislation imposes on our industry.
Going forward, TEAs will be designated differently. Minimum investment amounts will be higher. Job creation requirements will be stricter. And new forms and higher fees will be required of both Regional Centers and EB-5 investors.
But perhaps the most significant changes, for Regional Centers, will take place behind the scenes: the RIA’s integrity measures mean RCs will now need to provide an unprecedented amount of reporting, with harsh penalties for violations or oversight.
It isn’t all doom and gloom, however. We believe these changes will have a lasting, positive impact on our industry, and that legislation such as this was inevitable — even necessary if EB-5 investment is to mature and thrive in the coming decades. But there will be some growing pains in the short term.
To address the EB-5 industry’s need for clear and practical information surrounding these changes, we have recently published a new white paper, “The New Era of EB-5: Navigating the Reform and Integrity Act of 2022.”
This paper is intended to help Regional Centers confidently meet the RIA’s requirements. It contains sections on:
- New compliance requirements: security of funds reporting; recordkeeping and audits
- Changes to TEA definitions, minimum investment amounts, job creation limits and reserved visa numbers
- The RIA’s clarifying of redeployment options
- New rules for promoters
- And more…
Of particular interest is the paper’s discussion of the choice Regional Centers now face in how they track and report their financials. Professional, third-party fund administration has been an industry best practice for some time now, but the RIA actually makes this a requirement—unless Regional Centers meet the criteria for a waiver. In this paper, the pros and cons of fund administration vs. seeking a waiver are discussed in depth.
We invite you to download and read the paper, and to reach out to us at JTC Americas with any questions you may have. Together, we can successfully navigate this evolution in EB-5 and, as an industry, emerge stronger than ever before.