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Is EB-5 the Right Choice for your Capital Stack? By Lauren A. Cohen, Esq.

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An appealing option for project developers raising capital is to solicit foreign investors who are pursuing an EB-5 Visa. Like the foreign investor who needs to properly research a potential investment as discussed in our previous article, project developers need to be careful and thorough when locating potential investors.

A Regional Center is not required for the investment to qualify as an EB-5 investment but is the most utilized and preferable route. In order to secure an EB-5 Visa, an investor needs to invest at least $500,000 depending on whether it is located in a rural or targeted employment area.[1] A targeted employment area ď. . . is a rural area or an area experiencing unemployment of at least 150 percent of the national average rate. A rural area is any area outside a metropolitan statistical area . . . or outside the boundary of any city or town having a population of 20,000 or more according to the decennial census.Ē[2] Additionally, 10 full-time jobs must be created or preserved for qualifying U.S. workers within two years.[3]


The project developer needs to ensure that the project can meet the above legal requirements. This area of concern requires performing extensive risk analysis and due diligence. It is highly recommended that the developer contact a Regional Center that has been vetted by USCIS, which means the center has already been successful in developing projects using EB-5 financing. Developers need to be aware that even if a Regional Center is listed on USCISís website, this doesnít mean that the Center has been vetted. Due diligence is necessary when choosing a knowledgeable and reputable Regional Center.


Besides EB-5 requirements, there are many other issues that need to be addressed in order to be successful in securing EB-5 funding. Developers also need to be aware of the SEC Regulations regarding broker-dealers. Illegal transactions have occurred where unlicensed broker-dealers solicit investors for developers and receive finderís fees. Working with an unlicensed broker-dealer can affect the ability for a developer to secure future financing. It can also result in rescission claims by investors and/or investigation by the SEC.


Although EB-5 financing can certainly be an attractive option for a developerís capital stack, careful planning needs to be in place. The right team of professionals should be hired so that proper due diligence and risk assessment can be performed.


To find out about professional, well-researched, articulate, expository narrative Visa Business Plans, whether for EB-5 or any other business-related Visa, as well as a variety of ancillary services, all of which are designed to specifically address USCISís concerns, contact e-Council Inc.com at info@ecouncilinc.com.

e-Council Inc.comís website, newsletter and other forms of communication contain general information about legal matters. The information is not legal advice, and should not be treated as such. You must not rely on the information on this website as an alternative to legal advice from your attorney or other professional legal services provider. If you have any specific questions about any legal matter you should consult your attorney or other professional legal services provider.


[1] http://www.uscis.gov/working-united-...grant-investor

[2] Id

[3] Id


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