What is the EB-5 market norm for the terms of an LOI? - EB5Investors.com

What is the EB-5 market norm for the terms of an LOI?

I am a developer searching for an EB-5 capital provider for a construction loan. I found two providers, and both groups have a track record of raising funds, but the terms of the LOI seem to be different. One LOI makes our company responsible for paying for the entire package, including marketing costs. However, total cost to us is capped at a certain amount. The other LOI has our company paying for some of the offering expenses, but not the EB-5 capital providers” marketing expense. What is the EB-5 market norm for these terms of an LOI? The other terms on both of the deals seem to be similar.

Answers

Salvatore Picataggio

Salvatore Picataggio

Immigration Attorneys
Answered on

There really is not a typical format for these kind of deals. When working with an immigration broker-dealer (who should be registered with FINRA), the structure of payments may vary. Transaction-based compensation may be prohibited entirely under certain regulations.

Julia Roussinova

Julia Roussinova

Immigration Attorneys
Answered on

I believe you are raising business law questions rather than questions related to EB-5 immigration law issues. Letter of intent is generally not a contract that is legally enforceable. Please contact a business/contract attorney in your jurisdiction to consult with, and then decide how to approach the deal with potential EB-5 investors in compliance with EB-5 regulations upon a consultation with an EB-5 immigration attorney, etc.

Rohit Kapuria

Rohit Kapuria

Immigration Attorneys
Answered on

The LOI varies from agent to agent. It is standard for the developer to pay for all the expenses related to getting the EB-5 offering package together while an agent bears the cost of marketing to investors. Then again, some regional centers/consultants may take on some of the cost and eat into the deal on the back end. At the end of the day, you must do your due diligence on the entities you are negotiating with and determine what makes the most economic sense for you.

John J Downey

John J Downey

Immigration Attorneys
Answered on

Don''t know of any EB-5 norm. You decide which is best as a straight business deal, then work on EB-5 marketing of it.

DISCLAIMER: the information found on this website is intended to be general information; it is not legal or financial advice. Specific legal or financial advice can only be given by a licensed professional with full knowledge of all the facts and circumstances of your particular situation. You should seek consultation with legal, immigration, and financial experts prior to participating in the EB-5 program. Posting a question on this website does not create an attorney-client relationship. All questions you post will be available to the public: do not include confidential information in your question.