Creative Marketing Methods for Raising EB-5 Capital Within the United States
With the growing competition for capturing the attention of potential EB-5 investors already in the country , capital seekers will need to strategically plan how to best reach this market through campus seminars , targeting existing H-1B holders and give presentations to wealthy groups of tourists .
By Mike Xenick and Dominick Mondesir
The evolution of the EB-5 transactional process continues to develop , becoming more complex due to the limited number of EB-5 investors and the ever-increasing supply of quality EB-5 projects . The ability of developers , sponsors , issuers and regional centers to quickly raise desired levels of EB-5 capital will need to become more acute due to the fierce and growing competition in the industry and the ever-growing retrogression challenges that face EB-5 investors from China .
Typically , EB-5 groups have exclusively relied on the Regulation S exemption utilizing foreign finder / agents to raise EB-5 capital strictly offshore from non-U . S . residents . While this is the industry norm and has worked for decades , the challenges noted above and the very divisive issue of immigration in general right now under the Trump administration have created an immediate need to target new ( non- Chinese ) markets and the introduction of creative marketing methods for raising EB-5 capital . Let ’ s highlight how EB-5 groups effectively and legally can raise EB-5 capital directly from non-resident aliens in the U . S ., including those on alternative H and F visas .
VEHICLE TO RAISE EB-5 CAPITAL WITHIN THE UNITED STATES
In order to be compliant with U . S . securities laws , the most effective avenue for EB-5 groups to market and solicit EB-5 securities within the U . S . is through a registered , licensed and experienced U . S . securities broker-dealer ( BD ) in good standing with SEC and FINRA . To accomplish this , nonbroker-dealer groups may : purchase an already existing BD ;
"... There are approximately 750,000 Indians on H-1B visas in the U . S . who are stuck in EB-2 or EB-3 backlogs ..."
affiliate themselves with a BD ; seek their own BD registration ; or use the services of an established BD within the EB-5 industry . BDs have served a critical purpose for the last 85 years in the U . S . capital markets , owing a duty of independent due diligence on projects and professional determination of suitability of EB-5 investors for each respective investment a BD represents . As BDs are registered with the SEC and are members with FINRA , they are accountable to FINRA to protect the interests of EB-5 investors , whether the investors are actual clients of the BD or not .
Marketing your EB-5 project successfully within the U . S . requires a BD to conduct extensive due diligence on the principals and management team associated with each offering and independently verify all information in the project offering documents . It also requires them to review all marketing materials , including websites , presentations , project brochures and project teasers for compliance with U . S securities laws and ensure the information agrees with other information contained in the offering documents .
Also , a BD must ensure the individuals or employees of the BD soliciting / offering your EB-5 transaction to prospective EB-5 investors hold the appropriate securities licenses at the firm and have a proprietary onshore network and comprehensive marketing plan to effectively market your project .
Registered representatives involved in the origination , structuring , execution , solicitation , subscription and funding of an EB-5 transaction are required by law to hold FINRA series 79 or 7 , 82 & 63 securities licenses . Additionally , BD principals must devise and implement FINRA-compliant written supervisory procedures for their registered representatives to follow ,
35 EB5 INVESTORS MAGAZINE