[Q] What restrictions are imposed by the U.S. Securities Act or the state Securities Acts in marketing RC EB-5 Projects in U.S.?
[Q] Regional Center EB-5 has many Units for multiple investors. What are the restrictions imposed on the marketing of these Units (spots) to potential EB-5 investors. both within and outside the United States?
I am no expert on the U.S. Securities law, but the below is my understanding. Most, if not all, Regional Center EB-5 projects are offered or marketed to potential EB-5 investors without SEC and/or state registration requirements under either Regulation D or Regulation S exemptions, because such registration requirements are onerous. This means they can be (according to my understanding) offered to potential EB-5 investors as follows:
Within the United States: In reliance upon Rule 506 promulgated by the SEC, to only those persons who are deemed to be "Accredited Investors" within the meaning of Rule 501 promulgated by the SEC. Accredited Investor is defined as any person whom the issuer reasonably believes at the time of subscription to be:
- any natural person whose individual net worth, or joint net worth with that person's spouse, at the time of his purchase exceeds $1,000,000 USD;
- any natural person who had an individual income in excess of $200,000 in each of the two most recent years or joint income with that person's spouse in excess of $300,000 in each of two most recent years, and has a reasonable expectation of reaching the same income level in the current year.
Outside the United States: In reliance upon Regulations promulgated by the SEC, only to those persons who are not "U.S. Persons" within the meaning of such Regulations. U.S. Persons are defined as any natural person "resident" of the United States. "Resident" presumably means who are not physically residing in the United States, and as such, non-immigrants will probably not qualify as "non-U.S. Persons".
Attorney named Jennifer Moseley appears to be very knowledgeable in this area, so we recommend that you talk to her.