EB5 Investors Magazine Volume 7, Issue 2 | Page 57

TOP CORPORATE AT TORNEYS ROGELIO J. CARRASQUILLO CARRASQUILLO LAW GROUP P.C. Rogelio “Roy” Carrasquillo is the managing shareholder of Carrasquillo Law Group P.C. and chair of its EB-5 immigrant investor program services and compliance and securities practices. Carrasquillo represents public and private clients using EB-5 as a source of capital, filing for EB-5 regional center designation, investors evaluating their redeployment options, and developers seeking to raise EB-5 capital. He is experienced in public-private partnership projects using EB-5 funds and other economic and tax incentives. Carrasquillo is a frequent speaker and writer on EB-5 and securities law matters. He is a graduate of Georgetown University and University of Pennsylvania Law School and is admitted to practice in New York and Puerto Rico. WHAT TRENDS ARE YOU SEEING IN THE EB-5 INDUSTRY? We saw a decrease in the number of projects trying to incorporate EB-5 financing at the end of 2019. We are now working with our clients to adapt to the new rules. We are seeing successful raises using non-traditional structures with higher investment amounts and higher returns. Projects are incorporating various sources of funds to their capital stack, including tax credits, grants and bonds. Investors and developers are also seeing EB-5 financing as an additional benefit and not as the sole purpose or financing source of the projects. We continue to see a focus on alternative markets such as Latin America, where investors want to be more involved in the projects and look for a higher return of investment. HOW ARE YOU HANDLING THE ISSUE OF REDEPLOYMENT? We continue to work with our clients to ensure that their EB-5 offering documents cover redeployment both from a securities and an immigration points of view. We try to reach a balance between protecting the investors, providing the right disclosures, and providing the developer the highest level of flexibility in the process of redeployment. We are also assisting investors who are being faced with the issue of redeployment as their projects reach maturity to ensure that their rights are protected during the process and to avoid unnecessary delays to the return of their investment. CATHERINE D. HOLMES JEFFER MANGELS BUTLER & MITCHELL LLP Catherine D. Holmes is the chair of JMBM's Investment Capital Law Group. She has practiced law at JMBM for over 35 years, focusing o n inves tm e n t c api tal and business transactions. Holmes helps clients worldwide to raise, invest and manage capital from U.S. and non-U. S. investors. She has represented more than 100 real estate developers in obtaining financing through the EB-5 immigrant investor visa program for the development of hotels, multifamily and mixed - use developments through the U.S. Holmes has extensive experience in the hospitalit y industr y. She also handles business formations, private investment fund offering, business and regulatory matters. WHAT TRENDS ARE YOU SEEING IN THE EB-5 INDUSTRY? The long waiting periods for EB-5 investors from China and the increase in the minimum investment amount have substantially reduced the overall demand for EB-5 investments. The regulatory changes in the requirements for a targeted employment area have radically reduced the number of projects that are able to qualify for the lower minimum investment amount. This does not appear to have increased the number of projects in rural areas, though additional time will be required to determine the effect. It will take at least another 12 months to evaluate the long- term effect of the new regulations on the EB-5 market. HOW ARE YOU HANDLING THE ISSUE OF REDEPLOYMENT? The safest form of redeployment from the standpoint of USCIS policy and the expectations of EB-5 investors may be a redeployment in a project that is substantially similar to the original EB-5 investment with the same developer as the original EB-5 investment. Because of the extended waiting periods for EB-5 investors from mainland China, some EB-5 investors are electing to withdraw their visa petitions and absolve their investment of the “at risk” requirement. Even though an NCE may not be required to repay those withdrawing EB-5 investors, the NCE should use proceeds of repayment of their initial investment to repay the withdrawing EB-5 investors. EB5INVESTORS.COM 57