On Sep 11 2014 by H. Ronald Klasko

Marketing and Compliance: Additional Services for Our EB-5 Clients

The two core elements of our law firm’s EB-5 practice are well known to our clients and our readership.

This includes our EB-5 regional center and project team, which works with regional centers and project developers in structuring EB-5 projects and preparing regional center designation applications, exemplar petitions and templates for EB-5 projects. In doing so, we serve as the quarterback of a team that includes an EB-5 economist, EB-5 business plan writer, and EB-5 corporate and securities lawyer, as well as an escrow agent and often a market study firm.

Our EB-5 team also includes an investor group, which works with investors in preparing lawful source of funds and path of funds documentation, preparing and filing I-526 petitions and assisting with the conditional immigrant visa process.

Less well known are two other aspects of our full service EB-5 practice. Our EB-5 compliance group works with regional centers and project developers “from cradle to grave” in all aspects of EB-5 compliance. This aspect of our practice is critical to regional centers and project developers, as well as to investors, since it relates to the ability of the regional center to remain in compliance with USCIS laws and policies and the ability of project developers to be in a position to meet the needs of investors in the critical condition removal process. A group of lawyers, paralegals and auditors works with our clients to develop the necessary databases relating to investors and projects; obtain access to software or otherwise develop systems to track the flow of investment funds from escrow to the new commercial enterprise and from the new commercial enterprise to the project. We also develop systems to monitor and audit all of the necessary inputs to prove job creation at the I-829 stage, including direct jobs, construction expenditures, revenues, and other inputs included in the economic report. In doing so, we train in house staff and review documentation, often on a monthly basis, with the goal of having all documentation necessary by the time of each investor’s condition removal filing. This ongoing compliance enables us to prepare the condition removal template on a timely basis and without dealing with unanticipated or emergent issues. If the project is not on track or has materially changed from the original business plan, we know of the issues at an early stage and are able to develop alternative legal strategies to maximize the chances of condition removal without problems.

An important part of our EB-5 compliance practice is working with regional centers and project developers to adopt “industry best practices” in areas such as investor relations, staffing, budgeting, project review and monitoring, tracking condition removal dates, record keeping, insurance, conflicts and dealing with agents, among others. We also work with regional centers on preparation for and filing of the annual I-924A compliance report.

Another critical part of the EB-5 process for our regional center and developer clients involves the process of finding agents overseas to market to investors. We made a decision that, while services in this regard are critical to our clients, they are not really legal services. As such, we decided to provide these marketing services through a separate entity of which I am a principal. EB-5 Market Connect is the marketing service available to our clients. It is in the business of matching EB-5 projects with migration agents overseas. Our full-time employee creates an ongoing database of agents based on categories such as preferred size of project; preferred industries; geographical areas preferred; compensation structure; capital stack requirements; types of acceptable escrows; job cushion requirements; timelines for acquiring investors; and other categories. The company prepares a marketing strategy for the project, introduces the project to targeted agents, and negotiates the terms of a contractual arrangement between the client and the agent. More recently, EB-5 Market Connect has expanded its product line to include matching projects with regional centers.

These are two examples of how our law firm’s EB-5 practice has expanded to meet the needs of our clients for full service, life cycle representation. Because of the increasing demand for these services, we will be hosting a seminar focusing on marketing and compliance in the near future. Stay tuned for details.