Explore the EB-5 Developer FAQ. Get expert insight and opinion on securing project funding through the EB-5 investor visa program.

EB-5 Questions & Answers for Developers

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The EB-5 visa program, at its core, is an investor visa program that requires its participants to create new jobs for American workers. All pooled EB-5 investments (those involving more than one immigrant investor) are required to take place through an entity known as a regional center.

Regional centers are permitted to utilize reasonable economic methodologies in order to demonstrate direct, indirect and induced job creation so the job creation required of an immigrant investor does not have to come solely from the operations phase of a developer’s project.

Job creation can come from calculations associated with qualified construction expenditures, direct construction jobs, operating revenues and other economic formulas. A simple way to look at this from a developer’s perspective is that money being spent on qualified expenditures has a job creating impact so money spent equates to jobs being created. (There are project costs that will be excluded from this formula such as land acquisition costs and other expenses that do not have a job creation impact.)

The simplest way to look at this is through the eyes of the source providing the investment capital and what motivations are driving that investment. The monetary return on investment is a distant third when it comes to what an immigrant investor in the EB-5 program is seeking. An immigrant investor’s green card is dependent upon the creation of qualified jobs so the immigrant investors participating in the EB-5 program are seeking job creation and the greatest likelihood that the job creation will occur. These same investors are seeking a return of capital and an assurance that the return of capital will occur at some predetermined point in the future.

Traditional aspects of a developer’s project blend well with the two primary goals of the EB-5 investor. Normally a large project is either recapitalized after construction is complete or, in many cases, the project is sold. Both of these events provide the mechanism for repayment of an EB-5 loan. EB-5 investors are not seeking a high return on investment so EB-5 capital can serve as a replacement for higher cost mezzanine capital that a developer would normally be seeking.

The EB-5 program requires investments to be made into a “new commercial enterprise”, which is defined as any for-profit, lawful business that conducts ongoing and continuous business activities. Various types of projects can be eligible for EB-5 funding, as long as they meet the program requirements, such as job creation and investment amounts. Simply acquiring an existing business is not likely to provide the net new job creation EB-5 investors need in order to be successful. Existing jobs can only be relied upon if the underlying business qualifies as a “troubled business” as defined under the EB-5 Program. Expansions of existing businesses may carry with them “net new” jobs that investors could rely upon.

Some common types of projects that utilize EB-5 funding include:

Real estate development: This includes residential, commercial, and mixed-use developments, such as hotels, condominiums, shopping centers, and office buildings. Real estate projects are often popular because they typically create a significant number of construction jobs.

Infrastructure projects: This category includes transportation infrastructure such as highways, bridges, and airports, as well as energy projects like solar farms or hydroelectric plants.

Manufacturing and industrial facilities: Projects that involve the construction or expansion of factories, processing plants, and other industrial facilities can also qualify for EB-5 funding, as they create employment opportunities in manufacturing and related sectors.

Health care facilities: Hospitals, medical centers, and other health care facilities can utilize EB-5 investments to support the development of new facilities, expansions, or improvements.

Hospitality and tourism: Hotels, resorts, and other tourist attractions may benefit from EB-5 investments, as they often create numerous jobs in service, management, and operations.

Agriculture and agribusiness: Large-scale farming, ranching, or food processing operations can use EB-5 investments to fund the development or expansion of their facilities, creating jobs in rural areas.

Retail and entertainment complexes: Shopping malls, movie theaters, and other retail and entertainment centers can qualify for EB-5 funding if they create a sufficient number of jobs.Educational institutions: Schools, universities, and other educational facilities may be eligible for EB-5 funding, particularly if they create jobs and promote economic development in the surrounding community.

The specific eligibility of a project for EB-5 funding depends on factors such as the location, investment structure, and job creation potential. It is essential to work with experienced EB-5 consultants, immigration attorneys and regional centers, to ensure that a project meets all the necessary requirements.

The answer to this question depends on a number of factors. When referring to EB-5 capital being incorporated into the "project" as debt financing, the regulatory requirements for the developer are minimal. Most of the obligations of the developer/borrower are contained within the loan agreement/loan documents. Most regulatory requirements are obligations of the regional center and the New Commercial Enterprise (NCE) established by the regional center that will serve as the lender. (This would be the approach with the least amount of EB-5 regulatory obligations of a developer.)

The opposite extreme would be where a developer establishes a regional center in order to fund the projects of the developer or where a developer establishes the New Commercial Enterprise and operates the NCE under a sponsorship agreement with an already established regional center. Not only would there be EB-5 regulatory requirements that must be met there are additional issues related to securities law compliance that must be met and adhered to.

The key to answering this question is in understanding what role or roles the developer is wanting to take on. If the developer is solely seeking EB-5 capital as a replacement for higher cost capital then there is a path that places minimal obligations on the developer beyond the terms and conditions contained within a loan agreement and its associated documents.

This is dependent upon the role or roles of the developer. First, the developer needs to work with a highly experienced team of professionals that have successfully incorporated EB-5 funding into projects similar to the project of the developer. The measurement for "success" should go beyond just having raised capital as EB-5 investors measure their success in having obtained US permanent residence and a return of the capital they invested.

Next, a developer needs to think about terms and conditions that can be incorporated into a loan agreement (debt model of EB-5 investment) that place obligations on the regional center and the New Commercial Enterprise to remain compliant with all aspects of the EB-5 program and a failure to do so would be an event of default under such loan agreement. Specific terms and conditions within the loan agreement are there for the benefit of the lender however, specific terms and conditions can be built into this loan agreement to also protect the borrower . This is why it is so important that the developer works with an experienced and "successful" team of EB-5 experts.

Initially a developer would be presenting his/her project to one or more EB-5 professionals in order to determine if the project is suitable for EB-5 investment funding. To “structure your project” to be eligible for EB-5 funding implies that the developer is planning to be involved in all aspects of EB-5. This is rarely the intent of most developers as most developers are simply seeking a low cost alternative to mezzanine financing. If a developer is seeking to be totally immersed in the EB-5 offering and capital raise activities, the developer will need to ensure that all aspects of the project meet the EB-5 program requirements and the EB-5 securities offering is attractive to potential investors. Here are some steps to follow and typical terms associated with EB-5 investments:

Job creation: confirm that your project will be able to create at least 10 full-time jobs for qualified U.S. workers per EB-5 investor within the required time frame, which is generally within two years of the investor's admission to the U.S. as a conditional permanent resident.

Investment structure: You can structure EB-5 investments as either equity or debt. In an equity structure, foreign investors either become direct equity partners in the project, sharing profits and losses or these EB-5 investors invest into a New Commercial Enterprise (NCE) and that NCE makes an equity investment into the developer’s project. In a debt structure, the investment is structured as a loan from an NCE to the project with a fixed repayment schedule and interest rate.

Engage a Regional Center: Regional centers can assist with project structuring, pooling investments from multiple investors, and ensuring compliance with EB-5 requirements. It is critical to understand that the regional center operates on one side of the financial transaction and the developer operates on the other side of this financial transaction. A developer, especially one unfamiliar with the EB-5 program and its unique requirements, needs to engage experienced EB-5 professionals to assist the developer throughout the entire process.

Typical terms of an EB-5 investment may include:

Return on investment: The EB-5 program requires that EB-5 investors make an “at risk” investment into a for profit enterprise. Most EB-5 investors are prepared to accept a modest rate of return on their investment as the true ROI being sought is US permanent residence. As such, the cost of capital to the developer may be lower than traditional financing, as the primary motivation for investors is not a significant monetary rate of return

Investment term: The period of investment that most EB-5 investors are anticipating is an  investment term from five to seven years. This would be the overall period of time the NCE would be investing into a developer’s project. Equity and debt have differing exit strategies so the actual amount of time the NCE anticipates the investment term to be will be dictated by a loan agreement or the operational plans of the project in the case of an equity investment. The period of time for individual investors can vary based upon the amount of time it takes each EB-5 investor to achieve what is required under the EB-5 program in order to obtain US permanent residence . A timeframe of five to seven years allows sufficient time for job creation to occur in the event operational phase jobs are being relied upon by EB-5 investors. 

Exit strategy: Develop a clear exit strategy such as the sale of the project, or refinancing. This would allow investors to recover their capital once their investment has met the requirements of the EB-5 program.

Remember, it's crucial to work with experienced EB-5 professionals to help structure your project to meet all EB-5 requirements and successfully attract foreign investors.

The advantages to incorporating EB-5 into the financing plan of a large construction project are many. EB-5 investment is best suited as a replacement for mezzanine financing or outside equity so there will likely be a huge cost savings to the project as EB-5 funds tend to come at a much lower cost. EB-5 investors must "sustain" their investment for a required period of time. The EB-5 investor can see a return on their investment during this period of time however they cannot see a return of capital during this period of time. As such, EB-5 loans tend to be interest only loans and thus the financial burden to the project, especially during construction, is much less as a result of this EB-5 program requirement. There can be greater flexibility in an EB-5 loan. (This flexibility does not mean that EB-5 capital can be seen as foolish money with no obligation for repayment.) EB-5 investors are motivated in a different way than the traditional investor.

When EB-5 funds are structured as a loan, there is no direct impact on the ownership structure of your project. The investors have pooled their money into a New Commercial Enterprise (NCE) which then acts as a lender so neither the immigrant investors nor the NCE acquire an equity stake in the project. This means that you retain full ownership and control over your project.

Control and decision-making: As the EB-5 funds are provided in the form of a loan from the NCE to the borrower, the EB-5 investors themselves have no direct relationship to the borrower or the project. This would be a lender/borrower relationship defined in the loan agreement and associated documents as compared to what may exist in an equity investment and its operating agreement.

The primary financial concerns of EB-5 investors will be, when is the borrower obligated to repay the loan to the NCE and what recourse is available if the borrower defaults on any aspect of the loan. Depending on the nature of the project, there may still be loan covenants and restrictions in the loan agreement, which can impose certain requirements and limitations on your project management. It is essential to carefully review these terms to understand their potential impact on your project. (One example of this could be the construction and operation of a hotel that then seeks to replace the third party management team of the hotel’s operations.)

EB-5 funds are used as equity in your project:

When EB-5 funds are used as equity, the foreign investors, either directly or through an NCE, become shareholders in your project. This means that the ownership of the project will be diluted, with investors owning some share based on their investment amount. As a result, you would be required to give up some ownership of your project.

Control and decision-making: The degree of control and decision-making power granted to EB-5 investors, or the NCE comprised of the EB-5 investors, will depend on the terms of the investment agreement. Generally, EB-5 investors are considered limited partners or non-managing members in the NCE, which means they have limited control and influence over the day-to-day operations and decision-making. However, they still have voting rights on certain significant matters, such as changes to the NCE’s scope, any major financial decisions, or the wrapping up of the EB-5 partnership (NCE).

EB-5 Funding - Loan Model:

As an experienced property developer using EB-5 funding via a loan for your project, you should be aware of the following risks and consider the following strategies to mitigate them:

Importance of the Initial approach to EB-5: Most developers do not take on every aspect of each large scale construction project they become involved in. It would be impossible to do so. Approaching EB-5 funding is no different. The smart developer engages outside experts that have success in achieving what the developer is seeking to accomplish. All too often, developers are steered towards establishing a regional center when that is not the objective of the developer. If the objective is obtaining a replacement funding source for higher cost capital, why would a developer want to take on the equivalent of establishing a bank in order to get a loan.

Regulatory and compliance risk: The EB-5 program is subject to complex regulations, and non-compliance by irresponsible parties may result in harm to the immigration pursuits of EB-5 investors, civil and/or criminal penalties and disruptions that could jeopardize the funding that a developer is seeking. To mitigate this risk, work with experienced professionals including legal counsel and experienced and successful regional centers to ensure that your project and their actions comply with all relevant requirements.

Funding delays: The EB-5 process can be lengthy, and delays in obtaining funding could impact your project’s timeline. To address this risk, consider having contingency plans in place, such as alternative financing sources (short-term bridge financing) or adjusting your project timeline to account for potential delays.

Loan covenants and restrictions: EB-5 loans may come with strict covenants and restrictions that could limit your flexibility in managing the project. To mitigate this risk, carefully review the loan agreement terms so you understand why certain requirements are needed in order to ensure that those covenants and restrictions align with your project's needs and goals.

Repayment obligation: As with any loan, there is a risk that your project may not generate sufficient returns to repay the EB-5 loan as well as the ongoing interest on the loan. To address this risk, conduct thorough financial planning and feasibility studies to ensure that your project is viable and can generate the required returns to meet both the debt service and repayment obligations.

Immigration-related risks: Depending upon the terms and conditions in the EB-5 loan agreement, the financing plan of your project could be negatively impacted if a significant number of EB-5 investors fail to meet immigration requirements or have their applications denied. To mitigate this risk, the regional center you work with should work with experienced immigration attorneys who carefully screen investors who are more likely to successfully obtain their visas. Additionally, the EB-5 loan agreement needs to differentiate between a denial of an EB-5 investor petition for project related issues as compared to the denial of an EB-5 investor petition for reasons unrelated to the developer's project.

Economic and market risks: Changes in market conditions, interest rates, or other external factors could impact the success of your project and its ability to repay the EB-5 loan. To mitigate these risks, conduct regular market assessments, and be prepared to adjust your project strategy accordingly.

Investor relations: If the developer is operating solely as a "borrower" of EB-5 funds there will be little to no communications with individual EB-5 investors. If the developer is operating in a capacity beyond being just a borrower the developer should anticipate devoting a significant amount of time and resources to investor relations. Managing relationships with EB-5 investors can be time-consuming and require frequent and ongoing communications and reporting in multiple languages. To address this risk, consider working with a regional center or establishing a dedicated investor relations team to handle investor communications and reporting requirements.

EB-5 Funding - Equity Model:

Many of the challenges in an EB-5 capital raise are the same no matter if the investment is coming into a developer's project as debt or equity. An additional perspective needs to be brought into the mix when EB-5 funding, as equity, is being considered.

EB-5 investment capital is directly linked to how likely the Job Creating Entity (a developer's project) will be able to meet the goals of these immigrant investors and the level of risk associated with the creation of jobs and the return of capital to the EB-5 investors.

Most EB-5 practitioners will tell you that EB-5 investors have three primary goals which are:

  1. Obtain their green cards
  2. Return of their investment capital
  3. Some rate of return on their investment.

In reality, things are slightly different than just these three as outlined here. The real objectives are: get me the job creation for my green cards as quickly as you possibly can and with the greatest assurance you possibly can and once that is achieved get me my money back as quickly as you possibly can. Green cards and return of capital are the primary motivators when EB-5 investors are determining which EB-5 investment opportunity is right for them. High rates of return on investment normally equate to unacceptable risk so the monetary return on investment is not, or should not, be a key factor.

This is where equity faces its biggest challenge. EB-5 investment capital, as debt financing, tends to be second only to a senior lender. The EB-5 loan agreement has a maturity date so EB-5 investors have a specific time in the future that the borrower is obligated to repay the loan from the lender. Equity tends to operate differently. Equity tends to be lower in priority and equity normally has to wait until late in the project's waterfall of distributions to see any returns. These are uncertainties and risks that many EB-5 investors may find unacceptable. As a developer you need to look at things through your eyes and the eyes of prospective EB-5 investors in order to achieve the best results for all involved.

Here are the risks and potential strategies to mitigate such risks when using EB-5 funding via equity:

Regulatory and compliance risk: The EB-5 program is subject to complex regulations, and non-compliance by irresponsible parties may result in harm to the immigration pursuits of EB-5 investors, civil and/or criminal penalties and disruptions that could jeopardize the funding that a developer is seeking. To mitigate this risk, work with experienced professionals including legal counsel and experienced and successful regional centers to ensure that your project and their actions comply with all relevant requirements.

Funding delays: The EB-5 process can be lengthy, and delays in obtaining funding could impact your project timeline. To address this risk, consider having contingency plans in place, such as alternative financing sources or adjusting your project timeline to account for potential delays.

Dilution of ownership and control: By using EB-5 funds as equity, you would be required to give up some ownership and control of your project. To mitigate this risk, negotiate the terms of the investment agreement carefully to balance the need for funding with retaining sufficient control over your project's management and direction.

Immigration-related risks: Depending upon the terms and conditions in the operating agreement associated with the EB-5 equity investment, the financing plan of your project could be negatively impacted if a significant number of EB-5 investors fail to meet immigration requirements or have their applications denied. To mitigate this risk, the regional center you work with should work with experienced immigration attorneys who carefully screen investors who are more likely to successfully obtain their visas. Additionally, the EB-5 equity operating agreement needs to differentiate between a denial of an EB-5 investor petition for project related issues as compared to the denial of an EB-5 investor petition for reasons unrelated to the developer's project.

Economic and market risks: Changes in market conditions, interest rates, or other external factors could impact the success of your project and its ability to provide returns to the EB-5 investors. To mitigate these risks, conduct regular market assessments and be prepared to adjust your project strategy accordingly.

Exit strategy: As equity investors, EB-5 investors will eventually be seeking a return of their investment through the sale of the project or some other liquidity event. To address this risk, develop a clear exit strategy and communicate it with investors to manage expectations and ensure that your project's timeline and objectives align with their investment goals. This will be extremely important in the information prospective investors will be reviewing prior to any investment decision. The preservation of capital is paramount to most EB-5 investors. Most EB-5 investors are not motivated by the potential for high returns as there is usually a high risk associated with the opportunity for high reward. EB-5 investors are seeking green cards and a return of their entire capital contribution. Equity investments tend to equate to high risk/high reward or high risk/an unacceptable reduction in one’s capital investment. Developers seeking equity investments through EB-5 needs to be prepared to demonstrate how their project meets the goals of an EB-5 investor as compared to the traditional equity investor a developer may be used to working with.

To ensure that your project meets the EB-5 requirements for job creation and economic impact, consider the following:

Investment amount: Each foreign investor must make a qualifying investment in a new commercial enterprise. As of the date this information was published, the minimum investment amount is $800,000 if the project is in a Targeted Employment Area (TEA) or $1,050,000 for projects outside TEAs. Please verify the current amounts, as they may change over time.

New commercial enterprise: The investment must be in a new commercial enterprise, which is a for-profit entity formed for the ongoing conduct of lawful business. It can be a corporation, limited partnership, joint venture, business trust, or other entity.

Job creation: The EB-5 investment must create at least 10 full-time jobs for qualifying U.S. workers within two years (or, in some cases, a reasonable time after the two-year period) of the investor's admission to the U.S. as a Conditional Permanent Resident. Job creation can be direct (actual identifiable jobs), indirect or induced (jobs created collaterally due to the capital investment).

Targeted Employment Area (TEA): A TEA is either a rural area or an area experiencing high unemployment (at least 150% of the national average). Investing in a TEA reduces the minimum investment amount required. To ensure that your project is in a TEA, consult the appropriate EB-5 advisor, attorney or consultant who will use a tool to determine TEA eligibility.

Regional center: If your project is affiliated with a designated regional center, ensure that it complies with all USCIS requirements and guidelines. Regional centers are third-party entities that manage EB-5 projects and pool investments from multiple investors. They can be an effective way to meet job creation requirements through indirect job calculations and should be able to provide the necessary economic analysis and assist in calculating the maximum amount of investment suitable to your project based upon the number of jobs the project is likely to create. (Not all regional centers and industry professionals are equal in their abilities. A very small number of regional centers and industry professionals account for the overwhelming majority of EB-5 investment capital that has been successfully raised.) 

Compliance and transparency: Maintain accurate records, provide regular updates, and comply with all applicable laws, regulations, and reporting requirements.

Professional assistance: Consult with experienced business attorneys, immigration attorneys, economists, and other EB-5 industry professionals familiar with the EB-5 program to help you navigate the process and ensure that your project meets all requirements.

Please note: It is crucial to consult up-to-date sources and professionals to verify current requirements and guidelines.

Typical timelines can only be measured by the quality of the team a developer associates himself/herself with. Some regional centers have been able to successfully raise billions of EB-5 investment capital while other regional centers have struggled to raise capital associated with even a single investor.

Initially a developer should look at capitalizing their project without EB-5. The developer should then begin exploring how EB-5 investment may be able to benefit the project while also looking at what are the trade-offs that need to be considered if EB-5 investment capital is to play a role. A qualified EB-5 advisory team should be able to walk the developer through all aspects and do so at little to no cost to the developer. Be mindful of EB-5 experts that want to charge fees too early on in the exploration process as a wealth of information can be obtained just by asking.

While individual timelines may vary, the typical timeline for EB-5 funding are as follows:

  1. Project evaluation and preparation (1-3 months): Determine whether your project is suitable for the EB-5 program and prepare the necessary documentation.
  2. Regional center affiliation or creation (3-6 months or much longer if the developer is attempting to establish a new regional center): Identify and negotiate terms with a regional center, or submit an I-924 application to create your own regional center.
  3. EB-5 capital raise (6-18 months): This phase can vary in length depending on the marketing efforts of your chosen Regional Center and/or EB-5 consultants, the complexity of your project, and overall demand for EB-5 visas.
  4. Fund release: This aspect is dependent upon terms that would be established between the developer and the regional center/NCE; however the best approach for a developer would be for capital to be released to the developer as each tranche of capital is raised. There are instances where a certain amount of investment capital musy=t be raised before any release occurs and there are some agreements that require investors must receive I-526 petition approvals before the developer can access the EB-5 funds for eligible project expenses.
  5. Utilizing EB-5 funds (as soon as funds are released): With immediate access to the EB-5 capital, you can start using it for eligible project expenses.

To plan effectively for using EB-5 capital in your project timeline without waiting for I-526 approvals, consider the following steps:

  1. Set realistic expectations: Understand the potential risks associated with utilizing EB-5 funds.
  2. Diversify your capital sources: If possible, use a mix of traditional financing, equity, and bridge financing that can be replaced by EB-5 capital.
  3. Develop contingency plans: Have backup plans in place in case there are any issues with the EB-5 capital, such as the need to return funds to investors or delays in receiving investments.
  4. Work with experienced professionals: Collaborate with experienced EB-5 professionals including business attorneys, immigration attorneys (as applicable), regional centers, and other experts to ensure that your project meets EB-5 requirements and stays on track throughout the process.

Remember that individual projects and circumstances may vary, so it's essential to adapt this general timeline and these recommendations to your specific needs.

Basic research should be used as a means to elicit information but not a means by which to draw conclusions. Knowing this, begin with some internet searches in order to get a basic idea of which regional centers and industry experts may be the largest and the most successful.

Many regional centers have operated solely as "sponsors" of a project so the data you may see may not be reflective of projects that were completely under the control of that regional center. As a developer you should also seek out sources of information that do not have a cost associated with them. Initial consultations are oftentimes without cost however you will want to make sure the individuals or regional centers you are speaking with actually have the experience, expertise and ability to undertake a project in the region where your project will be built. Regional centers have a limited geographic scope so not all regional centers can undertake projects in all regions.

When considering regional centers look at past projects of the regional center and try to determine if this is a developer operated regional center or if the regional center works with a host of developers. Look to see if the regional center has any long-standing relationships with highly successful developers. 

Do not be afraid to ask questions and do not be afraid to ask very direct questions if your research turns up something you find concerning. If you have questions or concerns on a specific issue it is likely others have, or have had, those same questions or concerns. You should always be prepared to ask questions, get detailed answers to those questions and ask for ways to independently verify any of the information that is provided to you.

Any interactions with migration agents will stem from the nature of the relationship the developer has with the EB-5 offering. If a developer is operating solely as the borrower of EB-5 funds then a developer's interactions with migration agents, if any, should be limited to the developer's project and not the EB-5 offering that immigrant investors would be subscribing to. Developer's seeking EB-5 investment capital need a clear understanding of how they want to approach this funding source and what their duties, obligations and responsibilities will be if EB-5 investment capital plays a funding role in their project.

The role of the developer in the marketing of an EB-5 project varies depending upon the nature of the relationship the developer has to the regional center, the New Commercial Enterprise and the securities offering that will be presented to prospective EB-5 investors. A developer/borrower of EB-5 funds would have a very limited role in marketing whereas a developer that is intimately involved in the EB-5 offering should play a significant role.

To effectively market your development project to potential EB-5 investors, consider the following steps:

Understand the EB-5 program: Gain a thorough understanding of the EB-5 program requirements, benefits, and target audience. This includes job creation, investment amounts, TEA (Targeted Employment Area) designations, and other aspects that make your project attractive to foreign investors.

Collaborate effectively with the regional center that will be developing the marketing materials: Marketing materials are associated with the EB-5 offering so it is critical that the developer/borrower understand his/her role in this EB-5 transaction. As a borrower, the developer would not be directly involved in the development of marketing materials. Information provided by the developer would be one component of marketing materials associated with an EB-5 offering however there is much more involved than project information alone. Developing high-quality marketing materials, such as brochures, presentations, and videos, that showcase the unique features and advantages of your project are the responsibility of the regional center and the NCE unless the developer is playing a role in that securities offering.

Monitor progress: Inquire as to the effectiveness of the regional center/NCE marketing efforts and if the capital raising activities are matching up to any requirements in the loan agreement or EB-5 equity operating agreement. A lack of success in raising funds may require a developer to make adjustments to the funding plan of the project.

Ensure that there are requirements for ongoing compliance with USCIS and SEC regulations throughout the marketing process. This includes accurate and transparent communication with potential investors and adherence to securities laws.

The answer to this question depends upon the developer's role in regards to the EB-5 capital that is being sought:

If the developer is acting solely as the borrower of those funds, the obligations will be focused upon terms and conditions within the loan agreement and its associated documents. The EB-5 lender is going to be asking for documentation and reporting that is very akin to what a senior lender would be requiring. There may also be some requirements under The EB-5 Reform and Integrity Act of 2022 however these requirements should not be problematic for the vast majority of developers.

Requirements differ though if the developer is also associated with the securities offering to EB-5 investors. Reporting and compliance obligations expand greatly and the penalties for non-compliance can be severe. A developer, new to EB-5, will want to fully understand exactly what they would be signing up for before becoming a party to any securities offering as there are obligations to the SEC, the USCIS, the New Commercial Enterprise and its investors and more to think about.

Here is some further insight:

Whenever your company takes EB-5 funding through a regional center, either as a loan or via equity, you are required to meet certain reporting and compliance obligations. To ensure you meet these requirements, consider the following steps:

Engage experienced professionals: Work closely with your chosen EB-5 professionals. They can help you understand and navigate the complex regulatory landscape and ensure compliance with USCIS and SEC regulations.

Regional center compliance: Ensure that the regional center you've engaged is in good standing with USCIS and complies with all requirements. This includes annual I-924A filings, which demonstrate the regional center's ongoing eligibility and adherence to EB-5 regulations.

Job creation reporting: Collaborate with the regional center and other professionals to track and report on job creation throughout the project. This includes direct, indirect, and induced jobs created through the investment. (Direct operations phase jobs will require relevant documentation, such as payroll records, invoices, and contracts, that demonstrate job creation.)

Financial reporting and audits: Maintain accurate and up-to-date financial records for your project. Work with your accounting team to ensure that your financial statements are prepared according to generally accepted accounting principles (GAAP) and comply with any other applicable regulations.

I-829 petitions: Assist the Regional Center as may be required under a loan agreement or operating agreement. Information associated with the actual creation of jobs will be needed by EB-5 investors and their legal representatives, in preparing and filing I-829 petitions to remove conditions on their permanent resident status. This includes providing evidence of job creation, investment deployment, and project completion.

Monitor and address changes: This would include keeping the regional center abreast of any changes associated to a developer’s project as well as staying informed about changes in EB-5 regulations and guidelines, as well as any updates to securities laws if a developer is playing an expanded role in the EB-5 offering. Regularly review your compliance processes to ensure they remain up-to-date and effective.

By following these steps and working closely with experienced professionals, you should be able to ensure that your company meets the reporting and compliance requirements associated with EB-5 funding through a regional center, whether as a loan or via equity.

As a property developer, maximizing the benefits of EB-5 funding while minimizing risks and complying with legal requirements involves a well-structured partnership with your legal and financial advisors. Here are some recommendations for working with your team:

Engage experienced advisors: Choose legal and financial advisors and consultants with a strong background in EB-5 financing and real estate development. Their experience will help you navigate the complexities of the EB-5 program and ensure compliance with all requirements.

Develop a comprehensive business plan: Work with your advisors to create a detailed business plan. The plan should demonstrate that the project will meet the EB-5 program's job creation and investment requirements.

Assess the project's EB-5 funding viability: Ensure that the project is financially viable and has strong market demand. Your advisors can help you evaluate the project's potential viability and the likelihood of attracting EB-5 investors.

Structure the type of EB-5 investment: Collaborate with your advisors to structure the investment as either a direct investment or a regional center investment, based on your project's needs and goals. Decide upon an equity EB-5 investment or a loan type EB-5 investment. Regional center investments can provide additional flexibility in terms of job creation and pooling of funds from multiple investors.

Monitor compliance: Regularly consult with your legal and financial advisors to ensure ongoing compliance with EB-5 program requirements, including job creation and fund management. Maintain accurate records and documentation to support any audits or inquiries.

Communicate regularly with your professional advisors: Maintain open and transparent communication with your EB-5 advisors, keeping them informed about the project's progress and addressing any concerns they may have.

Plan for contingencies: Develop contingency plans with your advisors to address potential risks, such as project delays, or changes to EB-5 program regulations. This will help you navigate challenges while maintaining compliance and ensuring the project's success.

By following these recommendations and working closely with your legal and financial advisors, you can effectively structure your project to maximize the benefits of EB-5 funding while minimizing risks and maintaining compliance with all legal requirements.

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EB-5 Questions & Answers for Developers

This website is owned and operated by American Investment Migration LLC. (AIM) - American Investment Migration LLC provides consulting services to developers seeking investment capital by way of the EB-5 program. American Investment Migration LLC is not a registered broker dealer. It is anticipated that any Securities that may be offered associated to a project in which AIM has consulted to a developer will be offered through Winlo Management Group LLC Member FINRA / SIPC. American Investment Migration LLC and Winlo Management Group LLC are separate, unaffiliated entities

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