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How can one EB-5 project include several “subprojects”?

The regional center I am working with now says they have 2 or 3 upcoming hotels for which they are going to have our funds in a single escrow account for immigration purposes for one EB-5 project. How can a regional center have an EB-5 project that consists of multiple hotels by the same owner at different locations? What are the pros and cons of this scenario for the investor?

Answers

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    Fredrick W Voigtmann

    Immigration Attorney
    Answered on

    It is possible to arrange subprojects under a single new commercial enterprise, but more detail is needed to determine if the regional center is complying with all of the EB-5 rules. That is why it is imperative that you have independent legal counsel representing you and your best interests. The regional center and their representatives will put forth information to you designed to get you to sign up, but you must do the proper financial and immigration due diligence before you decide where or whether to invest.

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    Barbara Suri

    Immigration Attorney
    Answered on

    This information is contained in the business plan.

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    BoBi Ahn

    Immigration Attorney
    Answered on

    I am not sure if I am understanding the question clearly, but, for EB-5 purposes, your investment of the minimum required capital must create >10 jobs. So, you want to make sure your investment is made in the JCE (job-creating entity). In your scenario, if the 2 -3 projects are held/owned by 1 entity through which the investor's money is invested in, then it should not be a problem.

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    A Olusanjo Omoniyi

    Immigration Attorney
    Answered on

    This is not unusual and it is common in the EB5 industry. Advantageously, the regional center involved may be able to quickly meets the creation of required jobs through this process. However, the main disadvantage is that a regional center may be over-stretched as it is pursuing too many projects at the same time. Hopefully, the regional center you are working with is observing its limits and capacities to handle its multiple projects without any problem.

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    Lynne Feldman

    Immigration Attorney
    Answered on

    This is not uncommon and often addressed in the business plan check this.

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    Belma Chinchoy

    Immigration Attorney
    Answered on

    More info is needed regarding corporate and investment structures but it could be that one EB-5 fund makes qualifying investments into several projects. Each investor should be tied to a single project for job creation purposes unless operating projects are wholly owned subs (which I doubt they are). This is a complex EB-5 structure - potentially too complex for USCIS' liking - and you need to have a legal representative.

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    Mark AM Catam, Esq

    Immigration Attorney
    Answered on

    The answer would depend on how the project and investment offering were structured. Are there 3 different NCEs? Or one NCE with 3 JCEs? As a general rule, comingling of funds for different projects should be avoided especially if there are different NCEs per project, regardless of whether there is only a single sponsoring regional center. As a matter of best practices, always best to have one NCE per project, which includes separate escrows for different projects.

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    Jinhee Wilde

    Immigration Attorney
    Answered on

    Are you sure that they are going to commingle funds for several projects located at different far flung locations? Receiving different funds into one escrow is not the same as commingling funds for different job-creating entities.

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