+1-800-997-1228
Questions & Answers

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

  • Avatar

    Salvatore Picataggio

    Immigration Attorney
    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.

  • Avatar

    Julia Roussinova

    Immigration Attorney
    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.

  • Avatar

    Rohit Kapuria

    Immigration Attorney
    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.

  • Avatar

    John J Downey

    Immigration Attorney
    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.

Add your comment

Use a Facebook account to add a comment, subject to Facebook's Terms of Service and Privacy Policy. Your Facebook name, photo & other personal information you make public on Facebook will appear with your comment.