If you are reading this article, chances are you may be thinking about funding your business or development project with EB-5 funding. This article gives a brief overview of what the EB-5 program is, how you can get your project approved for funding and some tips on attracting EB-5 investors.
Back in the 1990’s, The United States passed an act creating the EB5 Immigrant Investor Program. This program allows foreign investors to get an “express pass” to US citizenship by investing a minimum of $500, 000 in a US-based project or enterprise that will create at least 10 jobs in the US.
However, for a long time, this program was overlooked because funding was easy to get elsewhere that didn’t require you to go through all of the hassles it takes to get EB 5 funding. Now that funding for businesses and project development is more difficult to get, many savvy project managers and business developer are looking to fund their project with EB 5 investments.
Essentially, to be eligible for EB 5 funding, you need to prove that the foreign investment in your business or project will create at least 10 new full-time jobs in the US for each foreign investor seeking US residency under the EB-5 program.
The real work is––attracting investors for your project. For this, you will need money and time, as well as, the assistance of an experienced EB 5 attorney who knows how the process works and has successfully helped others find EB 5 sources of investments for their projects.
That being said, here are 7 tips to help you secure funding for your project through the EB 5 program:
1. Be Marketable
With countless EB-5 projects to choose from, the level of competition is very high, and the best way to differentiate yourself to prospective investors is to develop a marketing strategy that builds confidence in your project, provides assurance, deals with every concern a potential investor may have, and attracts regional interests. Do your homework and understand your potential investors so that you can craft innovative and captivating marketing material that will appeal to them.
2. Transparency = Trust
Gaining the trust of potential investors is essential to attracting EB-5 funding and being transparent is the most effective way to achieve this. Be open and clear with regards to the potential risks inherent in your project. Whether it pertains to building and zoning permits, securing the land you need for the project, or its feasibility, doing your homework and being forthcoming will help you keep potential investors interested in your project.
3. Be Prepared to Answer Difficult Questions
Besides the USCIS who will be screening your project, you will get the most probing queries from the investors themselves. They will demand to know where their funds are going, how you will secure their investments, what the major risks are, and what a worst-case scenario might look like. Being prepared to address these difficult questions will lend you credibility and give reassure to interested immigrant investors.
4. Consider Working With a Regional Center
As defined by the USCIS, a regional center is:
“any economic entity, public or private, which is involved with the promotion of economic growth, improved regional productivity, job creation and increased domestic capital investment”.
In other words, it’s an organization designated by the USCIS as eligible to receive capital from foreign investors, seeking residence in the United States through the EB-5 program.
Having your project associated with a regional center provides certain benefits that enable investors and project developers to satisfy the job creation requirements of the EB-5 program easier. In addition, if you go about it the right way, the regional center’s reputation can work to your advantage as it can add a degree of credibility to your development project. This is especially so when trying to fund your first project.
Furthermore, working with a regional center allows you to count the creation of indirect jobs along with those you have created directly. The more jobs your project creates, the more investors it will attract and the easier it will be to satisfy the EB-5 job creation requirements.
5. Create More Jobs Than You Need
Job creation is one the most the important requirements of the EB-5 program. Each EB 5 investor will need your project to create a minimum of 10 jobs in order for his visa application to be successful. This means that the investors are relying on you for the success of their applications. If you need 10 investors to fund your project, don’t be satisfied with creating 100 jobs––create 120 or more jobs. It’s far better to create more jobs than you need (a buffer is optimal). This way, if for whatever reason, fewer jobs are created, there will still be enough jobs created to satisfy each of your investor’s green card applications.
6. Exemplar Status Make Your Project More Attractive
Another way to have your project stand out and to expedite the EB 5 application processing time for your investors is by acquiring exemplar status from the U.S. Citizenship and Immigration Services (USCIS). Exemplar status means that your project has been pre-approved by the USCIS, which is very attractive to potential investors. Gaining exemplar status can be arduous, and can take around 12 months. On the other hand, investors will welcome the shorter processing times and your pre-approved status will translate into less work for you as your project progresses.
7. Work With an Experienced EB-5 Attorney
Since you are new to the EB-5 program, you may find it difficult to attract investors if you are not working with an experienced EB 5 attorney. Furthermore, having the assistance of a seasoned professional will be invaluable when developing a winning EB-5 strategy, selecting suitable investors, and developing the necessary contacts to facilitate the funding of your project with EB 5 investments.
For more information on this and other EB-5 topics, contact an experienced EB-5 attorney at David Hirson & Partners, LLP today at 1-.