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What kind of projects qualify as EB-5 projects and what should I think about when selecting one?

I would like to know if EB-5 projects are only construction-based or if there are other options to choose from? What should I consider when selecting a project?

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    BoBi Ahn

    Immigration Attorney
    Answered on

    Any project that creates the requisite jobs and is a new commercial enterprise with the proper use of the investment and operation will qualify. EB-5 projects are not restricted to construction based projects. You should do a thorough vetting process of the projects before investing such as performance record (i.e. if prior I-526s have been filed what the approval record is), their financing structure, job creation method/detail and the exit strategy.

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    Ed Beshara

    Immigration Attorney
    Answered on

    EB-5 projects can involve other business activities besides construction. You should choose a project that is compliant with the EB-5 immigration regulations; a business that is financially viable, that will continue to exist for several years and will create the required jobs.

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    A Olusanjo Omoniyi

    Immigration Attorney
    Answered on

    There are various projects that can be used for EB-5. As an investor, you have options to decide what type of project you want to participate. If you are working with a regional center (RC), there may be projects in construction phase or those that have been completed. Advisably, consult an EB-5 attorney and, in the process, consider doing due diligence on each project before making a decision.

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    Charles Foster

    Immigration Attorney
    Answered on

    Any lawful project could potentially qualify as an EB-5 project and you should select one based on not only your interest and perhaps geographical accessibility but, more important than that, the reputation and success of the regional center and, even more important, the developers. Some regional centers market third party projects so, while the regional center itself may have been successful with any number of prior projects, what is critical besides the success of the regional center''s prior projects would be the success and reputation of the developer of the particular project in which you are investing. It is true that the vast majority of the projects are construction-based in hotels, condominiums and multi-use real estate projects. That, in part, is the result of the need after the 2009 recession for EB-5 financing when traditional financing became more restricted. Some investors are also able to have greater faith and understanding of real estate projects than other types of projects.

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    Raymond Lahoud

    Immigration Attorney
    Answered on

    EB-5 projects are broad in scope and can include anything from real estate developments, construction, to software projects, stores, or the like. You must do your due diligence on any project.

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    Vaughan de Kirby

    Immigration Attorney
    Answered on

    The safest way to select an EB-5 project is to work through a Registered Broker-Dealer that is a member of FINRA and SIPC. This is the only way generally you can be assured that independent due diligence has been done on the project you may select. Your investment immigration attorney should be able to help you identify a registered broker-dealer.

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    Abhinav Lohia

    Immigration Attorney
    Answered on

    Usually, regional center projects are construction-based. However, there are a few projects like franchise stores or wineries (agricultural projects) etc. Construction projects are popular because of ease of direct job creation and the value of the collateral. In choosing a project, you should consider the following things: First, the regional center' s track record of approval of conditional green cards, removal of conditions and return of capital. Second, the reasons for denial, if any. Third, the amount of capital returned to investors by the regional center. Fourth, the exit strategy of the project (that is, how the funds will be returned), as well as the refinance, the sale of project or performance of the project. Fifth, job creation possibilities, including the number of direct and indirect jobs, and whether or not there is a buffer in job creation. Sixth, the collateral for the EB-5 investment. Seventh, the value of the collateral (i.e., is it a depreciating collateral like machinery, equipment or vehicles?). Eighth, the lien of EB-5 investors on the assets of the project as a collateral to their investment. Tenth, the developer's track record. Finally, you must ask, if there is a senior lender, has the developer managed to secure the senior lender?

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