Most Common Questions
What is EB-5?
The EB-5 program is administered by United States Citizenship and Immigration Services (USCIS), which is intended to stimulate foreign investment and to create jobs at the same time. The program allows qualifying US-based companies to raise capital from foreign investors. Investors can invest either $500,000 or $1 million as direct investors in small businesses or through an "EB-5 regional center" and receive a green card upon approval of their investment application. Businesses must formally apply to USCIS to approve qualifying direct investments or to attain regional center designation.
The EB-5 Definitive Guide will help you to understand the details of the program, how it works and how to succeed. More About the Guide
What is the difference between a Direct Option and a Regional Center?
Direct EB-5 investments are investments where the foreign investor makes an investment (usually) directly into a business. The regional center EB-5 option involves the formation of a USCIS-approved EB-5 regional center, which can receive pooled investments from investors which will either be counted as an equity investment or be directed to a "project" business, often in the form of a loan. Each option has its own possibilities and limitations, depending on the business in question and the amount of capital that needs to be raised.
The EB-5 Definitive Guide will help you to understand the pros and cons of each option and how to choose which will work best for you. More About the Guide
How does it work?
Direct investments are typically arranged directly between the business and the foreign investor. Regional centers first apply for formal designation from the USCIS. Once that designation is successfully attained a regional center may solicit investments from investors in foreign countries (subject to specific legal requirements by the United States government and by the targeted investor countries). It is critical to take the time to understand the unique investor and investment requirements as they relate to the EB-5 program to avoid potentially costly and reputation-damaging mistakes.
The EB-5 Definitive Guide will outline program requirements in order to help entrepreneurs understand how best to make their opportunity fit the program and vice versa. More About the Guide
How Do I Get Regional Center Designation?
EB-5 entrepreneurs who wish to attain regional center designation must submit an application package (I-924) to the USCIS. When putting this package together it is critical to do your homework. The I-924 package outlines a framework by which the business must abide in terms of how the investor money will be invested and how it will create jobs. Putting together an I-924 package typically involves several external professionals including lawyers and an economist. These experienced experts can be most helpful in navigating regulatory requirements as well as investor market positioning requirements that should be considered at this time.
The EB-5 Definitive Guide will help entrepreneurs understand what they need to know before they hire their team in order to expedite the process and to avoid the need to pay high-priced experts more than necessary. More About the Guide
Where does the money come from?
Individual foreign investors all around the world are eligible to invest in the EB-5 program. The typical EB-5 investor is a high net worth individual who has at least $2 million in investable assets. As long as the investor meets the stringent USCIS qualifying requirements, they can invest in the EB-5 program. There are various countries around the world with a significant population of high net worth individuals. EB-5 entrepreneurs should seek to understand as much as possible about how EB-5 is marketed and perceived in the countries they intend to target so that their deal is appropriately structured for maximum investor interest.
The EB-5 Definitive Guide will help you understand how to position your business and investment for maximum success with investors. The guide also outlines some of the unique market and success factors in various countries where EB-5 is popular. More About the Guide
How do we find investors?
Depending on the country being targeted there are different ways that the investor market might be approached including the use of EB-5 oriented marketers in each country and participation in trade shows. Taking the time to learn what is required in the various countries will have important implications in terms of costs and marketing planning.
The EB-5 Definitive Guide outlines many of the most popular approaches to marketing to investors in various countries and covers some issues that should also be avoided in various countries. Purchasers of The EB-5 Definitive Guide are also entitled to personal introductions to some of the leading experts in the EB-5 field, potentially saving an immense amount of time and money. More About the Guide
How Do I Know Who to Hire?
Developing the best possible team for your needs is one of the keys to a smooth EB-5 application process with USCIS as well as the key to success with investors. There are many ways to go about developing your EB-5 team, including the hiring of an experienced project manager who will manage the process for you. The approach you take in putting together your team will depend on several factors including: what countries you intend to find investors, the structure of your deal, how much money you want to raise and whether you plan to launch more than one project company over time.
The EB-5 Definitive Guide outlines various options that entrepreneurs can consider and what matters when assembling a team. The guide also offers guidance on what questions to ask different experts in order to help assess the fit with your company. More About the Guide
How long does it take?
There are three distinct phases involved in getting investor dollars in the door: putting your initial application package together, getting USCIS approval, marketing to and admitting investors. The whole process can take many months and in some cases well over a year. There are many factors that affect this timeline including the expectation of expedited processing by USCIS and being prepared to quickly gather the information you need to put together your application package.
The EB-5 Definitive Guide provides guidance on how much time the process will take at each stage and what can be done to reduce the possibility of delays. More About the Guide
How much does it cost/ what will my total cost of money be?
There are significant costs involved in setting up a regional center; the total cost of setting up, operating and marketing a regional center can be anywhere from $175,000 up to $500,000 and upward from there for larger capital raises. This wide range of cost varies according to the choices made by the regional center in question and whether they are planning for a big or small investment and/or whether they are investing for the short or long-term.
The EB-5 Definitive Guide provides a framework to assist in calculating the costs of set up, marketing and unique EB-5 administration for your EB-5 regional center. More About the Guide
How do I know if my project will work in this program?
There are several factors involved in deciding whether a business is a good fit and evaluating how well it might do in the EB-5 program. These factors include: taking the time to understand what a favorable deal structure should look like, understanding how to appeal to investors and knowing total cost of money required will help to assess whether a given project business is a good fit or not.
The EB-5 Definitive Guide provides an outline of how to choose projects, assess their fit and gauge their possibility for success with investors. More About the Guide
Who can help me get this done quickly and properly?
The EB-5 program has spawned many professionals who are focused exclusively in the area of EB-5. As in any profession, some service providers are better than others and it is not always necessarily the case that the most expensive are the best, but strong reputations and experience often comes with a price tag to match. Asking the right questions and getting expert advice on team formation can save many thousands of dollars as well as time and trouble lost on expensive mistakes.
Purchasers of The EB-5 Definitive Guide will learn about the different ways one can structure a team and how much or how little to involve various team members. For those who wish to take advantage of it, The EB-5 Definitive Guide offers its readers direct introductions to some of the leading industry players. More About the Guide
Who needs to be involved in the process?
Most people realize that an immigration attorney, securities attorney and an economist are needed to develop an EB-5 regional center. Many do not realize however, that there are many other potential team members involved in the process. As with so many of the other elements of putting together a regional center the number of people involved in the process will vary according to the choices made in each individual circumstance.
The EB-5 Definitive Guide will outline the various roles involved in setting up a regional center beyond the obvious. Being aware of all the roles early on in the process puts regional center founders at a significant advantage in that arranging preliminary meetings and discussions with everybody before signing on anybody will help to make the process more effective and cost controlled. More About the Guide
Is there a limit to how much money one can raise via EB-5?
There is no limit to how much capital a given regional center can raise from foreign investors. Some EB-5 projects seek to raise well over $100 million. It is important to note, however, that both investor appetite and program rules and regulations do, in effect, impose certain restrictions that will affect how much capital a given project can reasonably hope to raise in the EB-5 program.
The EB-5 Definitive Guide helps investors to understand how investor needs and program rules will impact the capital raising plan under the EB-5 program. More About the Guide
What is a target employment area (TEA) and why does it matter (answer this one)
A Target Employment Area (TEA) is an area that experiences unemployment at 150% of the national average, or which is outside a Metropolitan Statistical Area with a population of 20,000 people. Attaining TEA designation for a regional center allows the regional center to ask foreign investors for $500,000 instead of $1 million in order them to qualify for the pro-program?. Although the definition of a TEA is relatively simple USCIS has specific requirements on how to demonstrate TEA eligibility.
The EB-5 Definitive Guide helps EB-5 entrepreneurs to understand what is involved in attaining TEA designation and why it may be a favorable approach, even though each investor puts in less money. More About the Guide
I've heard that I can count indirect job creation, is this true?
Approved regional centers can count the creation of "indirect" jobs toward their job creation requirements. Indirect jobs are jobs created by the regional center which are not directly employed by the regional center itself. In order to count indirect jobs the regional center must make an estimate (typically with the help of the economist) of how many jobs it will create, both direct and indirect, and this estimate must be provided to USCIS at the time of the submission of the initial I-924 application.
The EB-5 Definitive Guide will help you to understand the importance of both direct and indirect jobs, how they are counted and how they will impact the ultimate success of your EB-5 project. More About the Guide
Over two thirds of approved regional centers today are not actively bringing in money. What is their biggest mistake? Click here to find out