Question:

Investments made through the EB-5 program should not be construed as being passive in nature. In fact, USCIS regulations require petitioners/investors to not only be actively involved in management or policy-making, but investors must also supply evidence that they are or will be actively involved in the management of the new commercial enterprise (day-to-day or through policy). More specifically, the regulations at CFR § Sec. 204.6(j)(5) state that petitioners must show:
(i) A statement of the position title that the petitioner has or will have in the new enterprise and a complete description of the position’s duties;
(ii) Evidence that the petitioner is a corporate officer or a member of the corporate board of directors; or
(iii) If the new enterprise is a partnership, either limited or general, evidence that the petitioner is engaged in either direct management or policy making activities. For purposes of this section, if the petitioner is a limited partner and the limited partnership agreement provides the petitioner with certain rights, powers and duties normally granted to limited partners under the Uniform Limited Partnership Act, the petitioner will be considered sufficiently engaged in the management of the new commercial enterprise.

A question arises, however, as to what the implications are regarding the apparent contradiction of the investor’s need to participate actively as per above, and wording in the Uniform Limited Partnership Act, adopted by most states in the US in which, according to Section 302:

"A limited partner does not have the right or the power as a limited partner to act for or bind the limited partnership. In this respect a limited partner is analogous to a shareholder in a corporation; status as owner provides neither the right to manage nor a reasonable appearance of that right."

Additionally, Section 302 also states:

"The phrase 'as a limited partner' is intended to recognize that… the partnership agreement may as a matter of contract allocate managerial rights to one or more limited partners."

If a regional center's investors, therefore, are limited partners, the regional center logically needs to grant the investors certain rights to participate in management or policy in order to satisfy all EB-5 program requirements as well as Limited Partnership Act legislation. Some ways to approach this may include allowing investors to vote or have a say on certain issues like decisions about leadership or perhaps other key policy decisions.

In the end, a given regional center's specific approach and solution with regard to investor activity/passivity may vary according to its own particular situation and location and should be reviewed in detail with an attorney.

To see which states have adopted the Uniform Limited Partnership Act please, refer to: http://www.nccusl.org/Act.aspx?title=Limited%20Partnership%20Act.

On paper, the answer is "no". In reality, the answer is "usually, except by choice otherwise". IF working alone or in a group not affiliated with a Regional Center, the EB-5 investor is likely to be more actively involved in the job creating commercial enterprise. IF affiliated with a Regional Center, the EB-5 investor is usually afforded the simple basic rights as described in the Uniform Limited Partnership Act [ULPA] (a model Act adopted in many states and widely accepted as the best and most authoritative approach to Limited Partnership Agreements). ULPA is specifically accepted for EB-5 purposes by regulation at 8 CFR 204.6(j)(5)(iii). Basically, you need "voting rights" as to policy decisions affecting investments and the direction of the business, i.e, the "Investment Group's Choices for Investment".

If the investor is a Limited Partner, then the investor’s required management activity and responsibility is minimal and it is generally considered a passive investment.