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How does funding composition affect an EB-5 project?

If we are going to use EB-5 investments to build a new restaurant, how does the percentage of EB-5 funding in relation to the overall capital requirement affect the marketability of the project and what percentage of the project must be funded by the foreign investor for them to qualify for an EB-5 visa?

Answers

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    Shahzad Q Qadri

    RC Creator
    Answered on

    The funding composition is irrelevant. Recently, the more skin in the game the developer has, the more attractive the project is for investors.

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    Roberto Ortiz

    Immigration Attorney
    Answered on

    An EB-5 investor has to invest either $1 million or $500,000 if the new commercial enterprise is in a Targeted Employment Area (TEA). The EB-5 investor also has to demonstrate that the money that he or she invested creates 10 full-time direct jobs in 2 years. Therefore, the percentage of the project is not relevant. If you have any additional questions, please do not hesitate to contact me.

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    Lynne Feldman

    Immigration Attorney
    Answered on

    There isn't a percent requirement for foreign investment. They must invest $1 million into the project and create 10 new jobs. It doesn't matter if this is 100% or 1% of the total project, but for each EB-5 investor, these are the requirements. So, if 5 EB-5 investors invested in your project, you would have $5 million and would need at least 50 jobs to be created.

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    Fredrick W Voigtmann

    Immigration Attorney
    Answered on

    There are no U.S. immigration law or regulatory requirements regarding the percentage composition of EB-5 funding/non-EB-5 funding for a given project. That said, the marketability of the project is enhanced by a lower percentage of EB-5 capital required, as well as a higher placement in the capital stack, i.e., the priority the EB-5 investors have in relation to the capital they are providing.

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    Jinhee Wilde

    Immigration Attorney
    Answered on

    You should think about how many jobs will be created with this new restaurant and limit the EB-5 investors to make sure that the creation of the jobs will be enough to cover the 10+ jobs per investor requirement. Also, more non-EB-5 investor funding your project will have will signal better safety to the potential EB-5 investors.

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