Question:
What are the sources of revenue for regional centers? Assuming the Private Placement Memorandum states that the expected return is say 3 percent. Is it legal for the New Commercial Enterprise (NCE) to loan the investors capital to a Job Creating Entity (JCE) at 5 percent and retain the difference of 2 percent for itself after providing the investor with his return?
Answers:
The best advice is to retain an experienced EB-5 attorney who can assist you in setting up an EB-5 compliant project which will legally allow the Regional Center to financially benefit. It is important to offer complete transparency to the investors as to where the percentages are being placed under your circumstances. It seems if according to the PPM, the representation is that the investors will receive 5% then they should receive the 5%.
Regional centers with control of the new commercial enterprises (NCE) fund projects with a mix of EB-5 and non-EB-5 funding (other equity investors, traditional loans, etc.). The percentages vary, and some projects are 100% EB-5 funded. In a loan model (where the NCE loans funds to the JCE), the interest paid by the JCE on the repayment on the loan depends on how the developer or regional center wants to set it up and split among the investors, regional center, or other parties. Immigration attorneys with EB-5 expertise, like our law firm, review these structures from an immigration-compliance perspective, and can coordinate with corporate or business attorneys as well.