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The EB-5 visa program was created in 1990 as part of the Immigration Act in order to boost economic growth and job creation.
To foreign investors, the EB-5 visa program provides an opportunity to obtain a green card in return for a minimum investment and the creation of at least 10 jobs for American citizens. To developers, EB-5 is a low-cost source of financing for a variety of projects.
Developers have three ways to access EB-5 financing:
Regional center designation
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Developers have the option to access EB-5 financing by applying for a regional center (RC) designation from the USCIS. The process is long and costly, and requires the filing of a Form I-924, Application for Regional Center Under the Immigrant Investor Program petition, paying various fees, and assembling documentation such as a sample business plan and economist report for the proposed project. The advantages of obtaining EB-5 capital by seeking RC designation include less stringent requirements when it comes to job creation. RCs need only to create 10 indirect or induced jobs, or jobs that are created by the project's suppliers, vendors, or other ancillaries, whereas individual EB-5 investments require 10 direct full-time jobs. RCs are also allowed to pool funds from multiple investors: there is no limit to the number of investors that can contribute to a project as long as the job creation requirement is met.
Money invested through RCs can go directly into a project, or be held in escrow until the investor's I-526 Immigrant Petition by Alien Entrepreneur is approved.
Regional center affiliation
Many developers opt to “rent” an existing RC to avoid the time and expense associated with creating a new one while reaping most of the same benefits. In return, the RC might ask for a portion of the project's revenues or a fixed fee.
Direct investment
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With direct investment, developers receive financing directly from investors, cutting out the middleman. Investors are typically more involved and invested in the project. In addition, while regional centers can have multiple projects, direct EB-5 projects must be formed separately and have stringent requirements, such as the creation of 10 direct full-time jobs.
Developers who wish to take advantage of the EB-5 program for their financing needs should consider seeking the guidance of an EB-5 specialist for guidance.
Subscribe to this Shalom Segelman blog to learn more about accessing capital through the EB-5 program.
The advantage of EB-5 visa program is to boost economic growth and job creation.
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