EB5 Investors Magazine "Top 25 issue" Volume 9 Issue 1 | Page 24

once more been returned to DHS under a more restrictive qualifying definition of TEAs .
8 . RESERVED VISAS : The post-Act offering will also need detailed and nuanced disclosures related to reserved visas and , in certain circumstances , priority processing of EB-5 petitions for projects located in rural areas . The Act sets aside certain reserved visas each fiscal year and the US State Department has , as a result of the Act ’ s guidelines , starting in the May 2022 Visa Bulletin , created new fifth-preference visa categories where available visas during a fiscal year are distributed as follows : 20 % are allocated to projects that are located in rural areas , 10 % for projects in high unemployment areas ( most TEAs that are not rural would qualify ), and 2 % for infrastructure related projects . Any unused visas from such reserved categories would carry over from one fiscal year to the next fiscal year ; however , unused visas thereafter would no longer carryover . With specific respect to just the rural projects , the Act outlines a requirement that USCIS “ prioritize the processing and adjudication of petitions ” associated with such projects . 1
9 . FUND ADMINISTRATION : The amendment must
also address the requirements for fund administration oversight or require annual audits . The Act has established strict parameters surrounding the NCE ’ s maintenance and oversight of the EB-5 capital . The Act first requires that separate accounts be created for the EB-5 capital at the NCE level . It is unclear if this requirement also extends to the JCE , in a situation where the NCE and the JCE are unrelated . In addition , except as waived below , the NCE is also required to retain a Fund Administrator , which meets certain qualifications and is unrelated to the NCE , its management or the JCE and related affiliates . The Fund Administrator must be an attorney , accountant , registered investment advisor or broker dealer , or is authorized deemed qualified . The Fund Administrator is required to also be a joint signatory on the separate account and must make available the information related to the transactions of the account and the maintenance on a periodic basis to all investors in the NCE . In the event the NCE , and possibly the JCE , perform an annual audit under GAAP standards , the requirement for Fund Administration is not applicable . Therefore , as part of the amendment of the Offering documents , the EB-5 Issuer must carefully think through this requirement to ensure it is in compliance .
10 . COMPLIANCE : The Act also substantially increased Regional Center compliance obligations , including ( a ) annual audits and related recordkeeping functions ; ( b ) annual filings ; ( c ) securities compliance related certifications ; ( d ) Regional Center ownership requirements ; and ( e ) annual fees . As a result , the EB-5 Issuer must closely work with the Regional Center to ensure that such entity is capable of complying with the terms and conditions of the Act .
11 . JOB CREATION REQUIREMENT : The Act now also outlines that the job creation requirement may be satisfied with up to 90 % indirect job creation . This means that up to 10 % of the required number of jobs must be satisfied by direct job creation . Fortunately , the Act notes that accepted economic methodologies for counting direct jobs are permitted , as opposed to an assumed requirement that the 10 % job creation must be related to W2 jobs . In addition , where direct jobs stem from construction activity that is less than two years in length , such jobs could now be deemed direct jobs with