Thank you very much for the thought-provoking article. Are you aware that in 2017 during a USCIS stakeholder meeting IPO referred to two kinds of pooled investments:
1.Regional centers with pooled EB-5 investments; and
2. “Non-regional center [NCE’s] with pooled EB-5 investments (we call these “pooled standalones”).
In the basic EB-5 program which still exists, and has been amended by Congress, the Congress itself discussed “pooled investments” prior to the 1990 passage of the law (as referred to in the 2019 EB-5 book from AILA:
“Congress urged that the law should be interpreted as broadly as possible to accomplish these goals. In letters from Congress to legacy Immigration and Naturalization Service (INS), Senators Simpson, Simon, and Kennedy emphasized that national interest required that a “flexible interpretation” of the statute should be reflected in the implementing regulations. Congress envisioned flexible methods of investment—e.g., investments in joint capital ventures; resuscitation of troubled businesses; pooled investments; and investments in targeted areas.37 In statements made just prior to enactment of the law, Senator Simon succinctly stated: “[W]e do not want or need excessive or arbitrary industrial policy tests about what constitutes a worthwhile investment . . . we should encourage and not cripple the creativity of these enterprising immigrants.”38
37. Letter from U.S. Senate, Committee on the Judiciary, Subcommittee on Immigration and Refugee Affairs, to G. McNary, Commissioner, INS (Apr. 12, 1991). See also Letter from U.S. Senate, Committee on the Judiciary, Subcommittee on Immigration and Refugee Affairs, to G. McNary, Commissioner, INS (Aug. 2, 1991) (submitted as a comment on proposed regulation INS No. 1434-91).
Usage of the word “pool” or “pooled” or “pooling” in the securities industry does seem to be mostly in regard to special purpose vehicles (SPV’s) or separate corporate entities set for the purpose of combining funds together in one company (i.e., “the fund”) that then makes an investment or loan to another company. FINRA also uses the word, “pool” in its discussion here on “private placements”:
“A private placement is an offering of unregistered securities to a limited pool of investors.”
But then other definitions seem to suggest more than simply using a “pooled investment fund”. The NASDAQ (click here) has one definition for “Pool” that suggests it means any “combination of funds for the benefit of a common project”.
At the very minimum under the new law, EB-5 investors can have non-EB5 investors in a direct partnership. Whether it is more will depend on whether USCIS makes a reasonable interpretation.
You don’t seem to be reading the amendment to 204(a)(1)(H).
"An alien seeking to pool his or her investment with 1 or more aliens seeking classification under section 203(b)(5) shall file for such classification in accordance with section 203(b)(5)(E)"
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1.Regional centers with pooled EB-5 investments; and
2. “Non-regional center [NCE’s] with pooled EB-5 investments (we call these “pooled standalones”).
See here:
https://www.uscis.gov/sites/default/files/document/outreach-engagements/PED_IPO_ChiefColucciRemarks_03032017.pdf
In the basic EB-5 program which still exists, and has been amended by Congress, the Congress itself discussed “pooled investments” prior to the 1990 passage of the law (as referred to in the 2019 EB-5 book from AILA:
“Congress urged that the law should be interpreted as broadly as possible to accomplish these goals. In letters from Congress to legacy Immigration and Naturalization Service (INS), Senators Simpson, Simon, and Kennedy emphasized that national interest required that a “flexible interpretation” of the statute should be reflected in the implementing regulations. Congress envisioned flexible methods of investment—e.g., investments in joint capital ventures; resuscitation of troubled businesses; pooled investments; and investments in targeted areas.37 In statements made just prior to enactment of the law, Senator Simon succinctly stated: “[W]e do not want or need excessive or arbitrary industrial policy tests about what constitutes a worthwhile investment . . . we should encourage and not cripple the creativity of these enterprising immigrants.”38
37. Letter from U.S. Senate, Committee on the Judiciary, Subcommittee on Immigration and Refugee Affairs, to G. McNary, Commissioner, INS (Apr. 12, 1991). See also Letter from U.S. Senate, Committee on the Judiciary, Subcommittee on Immigration and Refugee Affairs, to G. McNary, Commissioner, INS (Aug. 2, 1991) (submitted as a comment on proposed regulation INS No. 1434-91).
38. 136 Cong. Rec. S17106, S17112 (1990) (Immigration Act of 1990-Conference Report).
Usage of the word “pool” or “pooled” or “pooling” in the securities industry does seem to be mostly in regard to special purpose vehicles (SPV’s) or separate corporate entities set for the purpose of combining funds together in one company (i.e., “the fund”) that then makes an investment or loan to another company. FINRA also uses the word, “pool” in its discussion here on “private placements”:
“A private placement is an offering of unregistered securities to a limited pool of investors.”
But then other definitions seem to suggest more than simply using a “pooled investment fund”. The NASDAQ (click here) has one definition for “Pool” that suggests it means any “combination of funds for the benefit of a common project”.
At the very minimum under the new law, EB-5 investors can have non-EB5 investors in a direct partnership. Whether it is more will depend on whether USCIS makes a reasonable interpretation.
Michael A. Harris, Esq.
"An alien seeking to pool his or her investment with 1 or more aliens seeking classification under section 203(b)(5) shall file for such classification in accordance with section 203(b)(5)(E)"
-- Anonymous