How does a business use EB-5 for funding?

This is an overly broad question. The EB-5 funds can be used for any job creating project. The advantages of forming a brand new regional center is that you are obviously in control, as well as not exposed to any liabilities that may exist out there. There are several advantages of regional center funds, the primary one being that it is cheap, collateral-free funding.

The EB-5 program is intended to promote the U.S. economy in general, while businesses that work with investors get access to funds that can help them have access to capital investment in order to build, grow and operate. In return, the foreign investors obtain green cards along with their family members. Concurrently, the community where the business is located will also gain additional employment, as the investment must create at least 10 new jobs. The advantages of forming an EB-5 Regional Center are immense, even though it requires a significant amount of funds to set up; besides, being the owner and decision-maker, the owner of a regional center is in a better position to dictate the direction and management of the regional center. Although it is generally acceptable and common, renting or buying a regional center means the influence of the renter can be severely limited because of the terms of the operating agreement. Therefore, renting can affect decision making situations with ultimate effects on the investments, governance and other operational activities of the renter. Further, there will always be a need to observe limitations that the owner of the regional center may impose. Also, those limitations may be on a continuing and on-going basis. The major difference between EB-5 capital and other forms of venture capital is that the EB-5 source of funds is exclusively for foreign investors. To the foreign investors, they can gain green cards for not only themselves but their family members as well. Thus, if properly handled, an EB-5 investment program can be a win-win venture for both the U.S. business enterprises and foreign investors. In spite of this fact, before embarking on EB-5 capital raising venture, it is advised that you learn all the requirements that the EB-5 program entails and how to structure them. You are going to need an EB-5 attorney to work through the maze of rules, regulations and interlocking features of immigration, securities and international laws.

Funding from EB-5 investors can be a valuable part of the non-traditional financing for any project. There is no "one size fits all" answer for whether or not a project should consider using an existing regional center, applying for its own regional center designation from the USCIS, or going the direct EB-5 route. The advantage of forming your own regional center would be that you could control costs better, and you could do future projects without renegotiating with anyone. The advantages of using EB-5 capital is that it might be cheaper to obtain than traditional financing. A good place to start would be to retain an experienced EB-5 attorney who can advise you on the details of what is best for your particular situation. If you decide to apply for a regional center designation, the attorney can put together the team of professionals, business attorney, economist, business plan writer, etc.

It sounds like you should arrange a consultation with our law firm to discuss your EB-5 interest and options! Briefly, you will have to organize your business to comply with USCIS regulations, create compliant and required documentation, and also consider the marketability of the project to foreign investors. EB-5 funding often comes with a lower interest rate and the foreign investors are not as "active" as other investors can be. Having your own regional center can allow you to use your project and have other projects pay you for using your regional center designation. Buying one may be expensive, but you will not have to wait for initial designation from USCIS, instead just an amendment for the change in ownership. Renting one may cost you, but if you''re just looking to fund one project, you can get started more quickly.

If you have a single project, then renting a quality regional center is acceptable. Otherwise, you should invest in your own. I will be happy to consult further.

To attract EB-5 funds, you can either form a USCIS-approved regional center or directly recruit foreign investors for your business/projects. The process to form a regional center is long (at least two years) and expensive. Normally if you have other sources of funding, you should rely on those. You should have a face to face consultation with an EB-5 attorney.

These are very complicated questions that cannot be answered in a short format. If you are interested, we can set up a meeting to discuss the EB-5 Regional Center.

To begin, you first must retain the services of an experienced EB-5 attorney. If you have your own regional center, you will not have to pay rental fees per investor. Because of the long time delays in obtaining designation as a regional center, it may be more cost-effective to rent a regional center and associate an actual project for immediate EB-5 funding.

The benefits of using EB-5 investors to fund your business, among other things, is the cost. Borrowing money from a bank may carry high interest, whereas money from EB-5 investors can be obtained at a lower cost. The advantages of creating your own regional center include the ability to pursue future EB-5 projects. To begin the process of placing your project in a regional center, or establishing your own regional center, begins with speaking to a qualified immigration attorney.

The answers to your relevant questions are not short. However, in regards to a regional center-based model (and not a direct EB-5 deal), EB-5 is generally used either to bridge gaps in a capital stack or replace short term equity and/or mezzanine financing. EB-5 investments are generally made into a new commercial enterprise, which in turn lends it to a job creating entity for use in a particular project. The advantages to renting a regional center are that the deal can move forward as soon as documents are finalized. If you go the route of forming a regional center, applications are taking roughly a year prior to getting approval. However, if you will be working on multiple projects in a particular geographic region, it might make sense to form your own at some point. Before you can begin working on raising funds, you would have to engage a number of EB-5 professionals to both advise your team, as well as to draft pertinent documents. You would also need to engage the services of a marketing agent to help find investors. I am happy to offer you a complimentary consult to further discuss the process.