Legal Experience& Training
1How Many INDIAN EB-5 Applications does the Lawyer File Each Year? Each Month?
While many lawyers claim experience with EB-5 applications the truth is that most lawyers only file a handful of EB-5 applications each year, if any. Asking how many EB-5 applications your lawyer files each month can be a highly informative question.
2What types of EB-5 Applications does the Lawyer File?
The overwhelming majority of EB-5 cases are Regional Center cases. “Direct” EB-5 cases have different requirements and require lawyers with different experience sets. How much experience does the lawyer have with Direct and Regional Center Cases?
Conflicts of Interest
1Does the Lawyer Accept any Payment from Regional Centers? Or Will They Receive Any Payment From Any Other Party Connected with the EB-5 Investment?
Unfortunately it is still common for lawyers to receive compensation from Regional Centers for referring clients to a Regional Center. The purpose of these payments is to induce lawyers to refer their clients to particular Regional Centers. Your lawyer should ONLY be paid by you and should not be paid referral fees for suggesting particular Regional Centers to you!
2Does your Lawyer Represent the Regional Center on the Project?
A lawyer or their law firm may represent the Regional Center on a project. This is a direct conflict of interest to your representation. The Regional Center is usually the General Partner of the entity established to funnel investors’ funds to the project. That General Partner has legal and other responsibilities to its investors in return for which it receives compensation from the investors. The lawyer for the EB-5 investors in a project needs to negotiate with the Regional Center on behalf of its clients/investors and potentially bring legal action against that Regional Center if things go awry. Some law firms will act both as Regional Center counsel on a project and as law firm to the investors. Our firm’s view is that this creates an unacceptable conflict of interest. Our firm will never position itself in such a compromised position; we believe that lawyers in this position are likely to be subject to disciplinary action and possible disbarment. Ask your lawyer if they, or their law firm are in any way connected to the law firm providing advice to the Regional Center on a project.
3Does the Lawyer Represent the Regional Center on Any Other Matter?
Even if a lawyer does not represent a Regional Center on your specific project they may still represent a Regional Center on other projects. This may also be a conflict of interest for your representation. If a Regional Center is a significant “repeat client” of your lawyer ask yourself how aggressively the lawyer will negotiate against the terms offered by their valuable Regional Center client. If need be would a lawyer who earns large fees from a Regional Center sue that Regional Center on behalf of an investor?
Loan Structure and Lending Risk
1Has the Lawyer Represented Clients in Loan Review and other Structured Finance Matters?
Regional Center EB-5 applications can involve complex Partnership Agreements, Loan Agreements, Subscription Agreements and Inter-creditor agreements. The position of the EB-5 investors as lenders to an EB-5 project directly raises issues of lending and finance law as it would with any other loan or investment. No lender would enter into a loan transaction without having the documents reviewed by an experienced lending lawyer, neither should you. Unfortunately most EB-5 lawyers lack any exposure or training in finance law and as a result may be unable to identify or evaluate certain lending-related risks. Ask you lawyer what their training and experience is with complex structured finance work.
2Will you Need Additional Specialized Legal Representation?
If you are an investor in a Regional Center EB-5 and your EB-5 lawyer does not have meaningful structured finance experience you may want to consider hiring a finance and/or lending lawyer and/or a tax consultant as well. While your EB-5 lawyer will perform some of the basic documentation work and “immigration due diligence”, your lending lawyer will advise you on the loan structure and risks.
3Is the Lawyer an AILA Member?
AILA is the American Immigration Lawyers Association and is the professional association for lawyers that practice immigration law. While there is no legal requirement that immigration lawyers be members of AILA the overwhelming majority of experienced immigration lawyers are AILA members.
4What are the Legal Training, Background and Specializations of the Lawyer?
In most countries simply obtaining a law degree and passing the bar examination is insufficient for obtaining a license to practice law. Most countries have a requirement that lawyers receive substantial post-bar exam experience in order to have a license to practice law on an unsupervised basis. Clients are generally unaware that in most U.S. States there is no practical training requirement in order for a lawyer to obtain a law license. Once a U.S. lawyer obtains a law degree and passes the bar examination he or she is allowed to assist EB-5 clients on an unsupervised basis. Given that neither the bar exam syllabus nor the academic syllabus at most US law schools contain any reference to the EB-5 program it is possible that a lawyer assisting EB-5 clients has never received any training specific to handling EB-5 cases. EB-5 lawyers at Davies & Associates have received post-bar examination training at some of the world’s largest law firms and are well equipped to assist clients.
5Country Specific Experience: Is a Lawyer aware of the Unique Issues in Your Country?
The EB-5 program has a number of requirements that raise country specific issues. The paramount concern is tracing the EB-5 investor’s source of funds. The ways in which funds can be lawfully earned in many countries and what is and is not acceptable local practice can and does vary. Knowledge of local law and practice and the USCIS attitude to those specific country issues is sometimes indispensible. As a firm that employs experienced EB-5 lawyers who are also licensed to practice law in other countries, Davies & Associates is well equipped to deal with this issue. In certain countries Davies & Associates maintain a local presence staffed with lawyers who are able to assist directly with country specific issues.
1Does your Lawyer Understand the Business Plan?
The central piece of a Direct EB-5 application is the business plan. While immigration lawyers are not licensed financial advisors our firm believes that it is completely impossible for a lawyer to competently file an EB-5 application without a very solid knowledge and understanding of the business plan and the client’s business. The lawyer needs to explain to the U.S. government how the business plan satisfies the legal requirements for I-526 and I-829 approval. Davies & Associates has EB-5 lawyers with over fifteen years of legal practice experience who hold MBA degrees from major universities, such as the Wharton School of Business. Some of our EB-5 lawyers also have experience advising on business plans and business issues with major global consulting firms.We visit our clients to ensure we understand their business. Does yours?
2Does Your Lawyer Understand the Regional Center’s Economic Models?
Regional Centers employ economic models to predict job creation. The job creation models come under intense scrutiny from USCIS BOTH at the time the initial I-516 is filed AND two-to-three years later when form I-829 is filed. If you are applying through the Regional Center program the approval of your green card depends on the long-term validity of the economic model applied. While lawyers are not economists and are not equipped to prepare an economic model nor to criticize the theory behind an economic model, EB-5 lawyers should have sufficient understanding of the economic model used by a Regional Center so that they can appraise you of the risks in your application.
1What is the Scope of Work that Your Fee Covers?
The full scope of work for an EB-5 visa includes: 1. All legal immigration work related to the I-526 and I-829 forms including drafting, organizing and filing the forms and supporting documentation 2. Source of Funds Assessment 3. Loan/Structures Finance Review 4. Legal review and assessment of the Partnership Agreement, Subscription Agreement and all Loan Documents for immigration risks 5. Corporate review of the Private Placement Memorandum for legality and consistency with the other deal documents Different law firms have different processes for handling EB-5 applications. These different process results in very substantial variations on terms of the time spent on each project. In addition, some lawyers accept part of their payment from the Regional Center. This clearly impairs a lawyer’s impartiality and creates an unacceptable conflict of interest.
1Who may apply for EB-5?
Anyone can apply for an EB5 visa who is not disbarred from entering United States. There are no language or educational qualifications required. An applicant should have lawful and explainable source of funds.
2How long does it take for an EB-5 applicant to get a conditional green card?
It takes around 12 to 16 months to get a conditional green card from the date of filing of the application for conditional green card (form I-526).
3What is the minimum amount of investment required?
For investments in areas other than “targeted employment areas,” the minimum amount of investment is $1 million. Investments in “targeted employment areas,” including approved regional centers, can qualify with a minimum of $500,000.
4What is a “targeted employment area?”
A targeted employment area is a rural area or a geographical area that has experienced unemployment at a rate of at least 150% of the national average rate.
5Must the entire amount of the investment be made at the time of applying for an immigrant visa?
The entire amount of the investment need not have been made at the time of applying for an immigrant visa. However, the investor must prove availability of the funds and an actual commitment of the required amount of capital. Investor must also produce a business plan explaining how the funds will be invested and jobs created.
6When must the employment be created?
The required 10 jobs must be created within the two- year period immediately following the investor becoming a permanent resident.
7Can I use retained earnings as investment for EB5 visa?
Retained earnings from the business based on which application has been filed do not qualify as eb5 investment.
8Can I use the money gifted by a parent or other relative for an EB-5 investment?
Whole or part of the EB5 investment can be a gift from parents or other relatives. It is important to document the source of the gift.
9What is a "conditional" Green Card?
A conditional Green Card is a temporary Green Card valid for two years received upon approval of I-526 application. An EB-5 investor first receives a conditional card before he/she is able to receive a green card without conditions. It is a mechanism put in place to verify that the investment is actually made and jobs are created and sustained.
10What are the conditions for removal of conditions (I-829) approval?
1. Evidence that the entrepreneur invested the requisite amount of capital. 2. Evidence that the entrepreneur sustained the investment in that enterprise throughout the period of conditional permanent residence. 3. Evidence that the entrepreneur's investment created or can be expected to create, within a reasonable time, 10 full-time jobs for qualifying employees.
11Where are EB-5 regional centers located?
EB-5 regional centers must be located in the United States and they must have a physical address. When a regional center receives its designation, there is a geographic scope, in addition to the industry scope, for any EB-5 project contemplated by the regional center.
12When does the period for continuous residence for naturalization begin?
When you first enter the United States as a conditional permanent resident.
13What documents must I prepare to process my investor Green Card petition?
This is a case specific question. Documents vary based on the source of funds of an applicant.
14What are the ways an EB5 investment can be funded?
There are many ways in which EB5 investment can be funded. These include but are not limited to gift from relatives or friends; sale of property; secured loans; inheritance; court ordered damages; liquidation of systematic investment portfolios, mutual funds, stocks and shares; sale of a company etc.
15What portion of an EB-5 investment can be loan proceeds?
The entire amount of investment can come from loan proceeds as long as the collateral is well-documented and you prove the lawful source of funds to purchase the collateral. Also, you must be personally and primarily liable for the loan.
16Where can employees in an EB-5 business be located?
The location of the job creating entity should be in a TEA, but traveling employees should be acceptable as long as they are based at the JCE site.
17How many projects do EB-5 regional centers offer?
There is no restriction on regional centers on the number of projects they can have at a given time. Some regional centers have more than one project.
18When is the U.S. residence of an EB-5 investor guaranteed?
Your U.S. residence vests permanently upon the approval of the I-829.
19Does the Child Status Protection Act apply to the EB-5 program?
Yes. According to USCIS, “CSPA allows the time a visa petition was pending to be subtracted from an applicant for permanent residence’s biological age so that the applicant is not penalized for the time in which USCIS did not adjudicate the petition.
20What is the process for applying for EB5 visa?
USCIS APPLICATION PROCESS 1 File Form I-526, Petition by Alien Entrepreneur 2 Upon approval of Form I-526 petition, either: • File Form I-485, Application to Register Permanent Residence or Adjust Status, with USCIS to adjust status to a conditional permanent resident within the United States, or • File DS-230 or DS-260, Application for Immigrant Visa and Alien Registration, with the U.S. Department of State to obtain an EB-5 visa for admission to the United States. Upon the approval of the I-485 application or upon entry into the United States with an EB-5 immigrant visa, the EB-5 investor and derivative family members will be granted conditional permanent residence for a two-year period. Removing Conditions • File Form I-829, Petition by Entrepreneur to Remove Conditions, 90 days before the two-year anniversary of the granting of the EB-5 investor’s conditional resident status (Green Card). • List only the conditional resident’s address on Form I-829. If USCIS approves this petition, the conditions will be removed from the EB-5 applicant’s status and the EB-5 investor and derivative family members will be allowed to permanently live and work in the United States. Courtesy USCIS Website: https://www.uscis.gov/working-united-states/permanent-workers/employment-based-immigration-fifth-preference-eb-5/eb-5-immigrant-investor-process