Managing Member William P. Cook Speaks at the EB-5 Investor Based Immigration Conference
Panel on “Considerations for Any Project”
GMLG Managing Member William P. Cook spoke about important client considerations for any project at the EB-5 Investor Based Immigration Conference in Los Angeles on September 8, 2015.
Mr. Cook spoke about the capital risk and structural options in the EB-5 program; he stressed that the investor has to consider, understand, and accept that their capital must be placed at risk—a profit or return of capital cannot be guaranteed. He explained strategies to look for the lowest-risk deal structure, such as using a Special Purpose Vehicle (SPV). He also detailed the compliance implications of this arrangement, including ensuring the sufficient managerial control by the investor in both Regional Center and Stand Alone projects.
Mr. Cook then summarized the general advantages of doing a Regional Center deal vs. a Stand Alone deal. He explained that with a Regional Center deal, an investor can be passive—often a Limited Partner in an LLP—and do not need to perform any duties or fulfil any obligations other than funding the investment and monitoring the progress of the deal. He added that Regional Center deals also benefit from indirect job creation.
Next, he explained how Stand Alone deals also offer advantages to investors who prefer more control of the project; investors can select the function, location, size, structure, and partners of the new commercial enterprise. Mr. Cook noted how investors are then not reliant on, or vulernable to, the actions of a Regional Center, which might affects the prospects of their immigrant benefits or the return of their investment if something goes wrong or the Regional Center is not compliant with U.S. Government requirements. He stressed the importance of retaining experienced immigration counsel to monitor the Regional Center’s progress throughout the entire EB-5 process.
Finally, Mr. Cook explained the general advantages and disadvantages of doing loan-based or equity-based deal structures.