If you're planning to apply for the EB-5 Program Visa, it's important to know that the commercial enterprise project investors and regional centers must abide by U.S. securities laws for EB-5 Securities.

All EB-5 Securities must be registered with the United States Securities and Exchange Commission (SEC).

While it may seem like a lot of work for the owner of an investment project, the idea behind the registration is beneficial to investors. The U.S. security laws are designed to protect investors from unlawful security sellers.

While this protection is beneficial and necessary, the process for registering your securities can be costly, tedious, and time consuming.

This security registration can also interfere with the EB-5 application process.

USCIS mandates a specific timeframe that all EB-5 applications be fulfilled, however, due to the slow turnaround timeframe of the security registration; you may miss deadlines for the EB-5.

There are a few exemptions that allow EB-5 investors to get out of the security registration process.

You can be exempted if you are an accredited investor who has a net worth exceeding $1 million, or if you are an accredited investor who can prove that you earned over $200k income during the last two years. (Must be over $300k if the investor has a spouse.) These exemptions are part of Regulation D.

Regulation D exemption:

If your EB-5 securities are exempt under Regulation D they cannot be resold. Additionally, to qualify, the SEC prohibits regional centers and investors from engaging in advertising and solicitation of securities.

Sometimes the EB-5 process is misused for fraudulent purposes (scams) and USCIS and the SEC take emergency enforcement actions to stop any allegedly fraudulent securities offerings.

For investors there are steps you can take to ensure that your investment is going to a more secure project by researching the following:

Confirm that the regional center you're interested in is USCIS approved.
Obtain copies of documents provided to USCIS from the regional center you're interested in.
Request all investment information in writing.
Find out if the promoters of the investment project are being paid and why.
Seek independent verification by going to parties affiliated with the investment and finding confirmation.
Double check anything that could be fraudulent. Do they make promises they shouldn't?