Articles Tagged with EB-5

AdobeStock_360784031-300x200Registration of securities is a legal requirement that costs investment funds time and money. It is important to stay compliant with all applicable securities laws, so if registration is not financially or logistically feasible, be sure that you have a recognized exemption from the registration requirement. These exempt offerings are designated as “EB-5” under United States securities laws. EB-5 is also a designation used for the visa a foreign investor must obtain in order to invest in an EB-5 fund. EB-5 investments are also called private placements or unregistered offerings. Learn more about some of the common legal issues that arise with EB-5 offerings, as well as how investors and offering companies can protect themselves from financial and legal liabilities in relation to them.

Relying On Exemptions From Registration From Securities Laws

SEC Rules 504, 505, and 506 establish exemptions from the registration requirement for certain securities. These rules specify how much equity may be sold by an offering entity in a twelve-month period, how much money may be raised, and whether the investors must be accredited in order to maintain the offering’s eligibility for exemption from the registration requirement. These rules also specify the manner of advertising that may be used for the offering. Each of these rules provides specific legal guidelines that must be met exactly. Failure to meet the exemption requirements can subject a business to fines, penalties, legal liability, and administrative requirements (such as limits of offering securities in the future).

eb5-300x200The EB-5 program is a citizenship program that was established in 1990. It was designed to stimulate the American economy by attracting foreign nationals to work and invest in the United States. The EB-5 program can benefit employees and investors by creating a path to obtain citizenship. It can also benefit businesses by allowing them to act as “regional centers” that offer investment opportunities in new commercial areas.

Qualifying Employees for the EB-5 Program

The path to citizenship for individuals is usually based on either (1) a family relationship with a U.S. citizen or lawful permanent residence, (2) humanitarian grounds such as asylum, or (3) employment status with a company engaging in business within the United States. Within the employment category, there are many different options for visas and citizenship. The EB-5 program is designed for investors, not employees, but there are many other options for obtaining lawful immigration status for your employees. Visit the USCIS website to learn more about employment visas for your workers.