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What vetting process will I have to undergo to receive EB-5 funds?

I am a multi-unit QSR franchisee in West Texas and I am considering a significant expansion in Texas and perhaps South Carolina. Are funds available for EB-5 purposes like these? What vetting will I have to undergo to participate in receiving EB-5 funds?

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    Answered on

    The EB-5 program does not have funds available for a U.S. business to obtain. That is, it is not a grant. The EB-5 program is a framework for U.S. businesses to obtain foreign investments, allowing the investors to obtain a green card. The U.S. business needs to have the right legal and financial structures and proper documentation to show compliance with the laws, rules, regulations and policies for EB-5 projects. Working with experienced EB-5 attorneys will help you get these structures in place and create a project that can be the basis for an approvable investor petition.

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    Answered on

    The answer rests largely on how well you can market your idea to potential investors. There is no definitive standard for soliciting EB-5 investors. Also, there is no vetting process in place. Therefore, work with a relevant EB-5 professional throughout this process, such as an attorney.

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    Answered on

    To receive EB-5 funds for the expansion of your QSR franchises in Texas and perhaps South Carolina, you would have to establish that your enterprise is located in a Targeted Economic Area (TEA); if not, rather than raising funds at $500,000 per investor, you would have to raise funds at $1 million per investor, remembering these minimum amounts will likely be increased by as early as April next year. At the same time the definition of TEAs may be significantly restricted. You would also have to show that for each investor 10 full-time jobs were created for U.S. workers unless you are using a regional center and in that case, indirect jobs my count. You would also have to be able to raise the funds most likely through some third party that is experienced in China or elsewhere in attracting investors for worthwhile EB-5 projects.

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    Answered on

    You need to create an EB-5 compliant offering in order to raise EB-5 funds. Depending on the scope and scale of your desired EB-5 raise, you may need to enlist a regional center (either lease one or create your own) in order to raise the needed EB-5 capital. Otherwise, if it is a smaller raise, you can use the direct EB-5 investment model.

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    Answered on

    You might be able to solicit EB-5 funds for new businesses that will hire U.S. workers. The process is complicated because it may involve securities offering and U.S. immigration is currently revising regulations to create more transparency for investors, which will include vigorous oversight.

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