opportunities consistent with the terms of the NCEs ’ operating / limited partnership agreements . Of course , it is crucial that NCEs work with securities and immigration attorneys to ensure that any actions related to redeployment of the EB-5 proceeds are in conformity with the terms of USCIS policy and the NCE ’ s operating or limited partnership agreement . At minimum , being a fiduciary for the EB-5 funds , the NCE ’ s manager or general partner should provide appropriate notice to the investors .
An easy way to think about this is knowing that the investors subscribed to the NCE based on representations made in the offering documents related to the initial project . Following repayment , the NCE cannot simply redeploy the funds into another asset class that the investors have no knowledge of , irrespective of whether such redeployment conforms with the Policy Manual .
Consent from a majority of investors may be required prior to the redeployment . There are a host of other related issues , such as the term of the new investment , the projected returns on such investment , the risks inherent in such investments , the viability and potential for loss of the investment , etc .
Without proper planning and consultation with the NCE ’ s list of the aforementioned professionals , the NCE could turn the success of an initial project into a tremendous loss on the reinvestment flip . The general attitude that EB-5 investors only care about acquiring green cards does need to change . The capital contributions initially made by each investor is substantive and many investors have some level of dependence on receiving most , if not all , of the funds back following completion of the sustainment period .
INVESTMENT CONSIDERATIONS
Based on the guidelines discussed above , there are four considerations that NCEs should keep in mind when considering redeployment investment options .
The first is flexibility . It is important to maintain a level of flexibility with the investment decision . While some NCEs do not have any investors who are near the completion of their respective sustainment periods in the short term , others do . Consideration for flexibility comes into play when the NCE either has a mixed group of retrogressed and non-retrogressed investors , or if the NCEs investors will be completing their sustainment periods in the short term . In such situations , the NCE should consider redeployment options that permit easy liquidation .
The second is diversification . Investments under the EB-5 program tend to offer investors few , if any , choices of investment diversity . Given that the redeployment guidance allows for redeployed investments into “ one or more similar ” loans or entities , NCEs arguably could provide investors with more risk mitigation by considering redeployment of EB-5 capital into more than one redeployment opportunity . If the requisite number of jobs has already been created by the initial project , capital preservation will likely become the top priority for investors .
The third is risk mitigation . Beyond investment diversification , NCEs will want to mitigate risk as much as possible for their investors . Therefore , the higher the degree of allowable risk
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