EB5 Investors Magazine Volume 1 Issue 1 | Page 39

The EB-5 Regional Center Program allows groups of foreign national investors to invest personal funds into a U.S. corporation, which in turn will transfer these funds as equity or as a loan to projects that will create a required amount of jobs. As a result, the foreign national investor will receive conditional permanent residency (a conditional green card). This article specifically addresses the practice of representing foreign national investors in the filing of the I-526 petitions for EB-5 Regional Center projects. The most important aspect of this article addresses the practitioner’s dealings with the brokers, or intermediaries, who source the investors for a particular EB-5 Regional Center project. The first step will involve the preparation and filing of the I-526 petition. The second step is the preparation and filing of each individual family member’s applications for conditional permanent residency with the U.S. Consulate or USCIS. The third step involves the preparation and filing of petitions to remove the conditions to permanent residency. First Dealings with Foreign Brokers Most EB-5 Regional Center projects receive the foreign national investor’s funds through foreign brokers. Currently, the majority of foreign brokers are in China, as the Chinese make up most of the foreign investors for the EB-5 Regional Center projects. In most instances, the foreign broker, according to the agreement with the law firm, will pay the attorney’s fees and costs for the foreign national investors. Usually, they will pay for the first two steps. The reason for paying for these steps is that the law firm will prepare not only the I-526 petition but also concurrently prepare for the conditional permanent residency application process under the second step. There are many circumstances which may exist that have brought the law firm in contact with the foreign broker. For instance, law firms and attorneys attend seminars in China as well as the United States. Alternatively, the law firm’s representation of EB-5 Regional Centers has led to introductions to foreign brokers. The foreign brokers, according to the agreement with the law firm, state they are the agents for the foreign national investors, and they have been given authorization by the foreign national investor clients to correspond and review all confidential information and documentation between the law firm and the foreign national investor. Agreements between EB-5 Regional Center Projects and Brokers An agreement may be reached between the EB-5 Regional Center and a broker to source foreign national investors for their EB-5 project. In certain circumstances, the EB-5 Regional Center project will enter into an exclusive agreement with the foreign broker to source all of the foreign national investors that are needed for the entire EB-5 project. The Agreement between the Foreign National Investor and the Law Firm The law firm will also enter into an agreement with the foreign national investors who have been sourced by the foreign brokers. In other circumstances, the EB-5 Regional Center project will enter into an agreement with a foreign broker to source only some of the required foreign national investors to finance their project. The agreement between the EB-5 Regional Center project and the foreign broker will usually state the terms related to finder’s fees and further financial and time obligations. The Specifics of Agreements between a Law Firm, Brokers and Investors The foreign broker will also enter into an agreement with the law firm regarding the sourcing of foreign national investors to the law firm. Under these circumstances, the law firm will be representing the foreign national investors in the preparation and filing of the I-526 petitions, and one-hundred percent of their obligations will be to the foreign national investors. The foreign brokers, in an agreement with the law firm, will set out terms stating that each of the foreign national investors will pay a certain U.S. dollar amount for the three steps of representation and costs. This agreement may appear in one of two different formats. In one format, the amount of attorney’s fees and costs is specifically stated in the agreement. In the other format, the attorney’s fees are not stated, but there is reference to the fact that the law firm will be representing the foreign national investor in regard to the preparations of the three steps, and the attorney’s fees will be paid by a third party (the foreign broker). Each EB-5 practitioner will have to use due diligence in acquiring, from their state bar association, the rules, regulations or codes in respect to the authorization and parameters for the third party paying the attorney’s fees and costs for the foreign investor client. Refund of Attorney’s Fees In most cases, according to the agreement between the law firm and the foreign national investor, the law firm will not refund attorney’s fees if there is a denial of the I-526 or the application for conditional permanent residency. The law firm will have spent a substantial amount of time, advice and expertise in the preparation and filing of the petitions and applications with USCIS or the U.S. Consulate. Continued on page 40 w w w. E B 5 I n v e s to r s . c o m 39