First off, serious kudos to Akerman for their on-point memo (see bottom of blog for link to their site) on this subject; it was totally under the radar till I saw it there and incredibly important from an SEC compliance standpoint, as much for Regional Centers qualifying investors as for immigration attorneys representing clients.
As it has been defined until the new law, he term “accredited investor” included any natural person whose net
worth, either individually or jointly with his or her spouse, exceeded
one million dollars ($1,000,000), including the value of the investor’s
primary residence, or whose individual or joint income exceeded certain thresholds...AND the person didn't expect things to change dramatically anytime soon. This has been somewhat glossed over by many in our business and I can't tell you how many prospective EB-5 investors have been sent my way...only to have my basic inquiry reveal that they did NOT meet the requirements. Moreover, in countries where things are getting scary (i.e., Mexico, Venezuela, South Korea, etc.), there are a LOT of folks exploring the EB-5...many of them folks who, but for their homestead, do NOT meet the definition.
Here's what just changed and what matters: on July 21, 2010, President Obama signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank” or the “Act”). Since the EB5 was created, it has operated under this so-called "Reg D" exemption. Regulation D provides a safe harbor exemption from registration under the Securities Actfor the private placement of securities to accredited investors. The big news: the new definition of the term “accredited investor” under Rule 501 of Regulation D and Rule 215 of the Securities Act of 1933 excludes the value of a primary residence for purposes of calculating a natural person’s net worth.
The bottom line: stop glossing over the threshold, guys. The SEC is sniffing us out as a sector and EB-5 compliance will not be exclusively USCIS business forever.