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When is a feasibility study needed for an EB-5 project?

We are looking for EB-5 investors and would like to raise $3.5 million. Our project falls under a TEA. Is it required to have a feasibility study completed for our project? If so, when should the study be done? How is the EB-5 feasibility study different from the economic impact study?

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    Ed Beshara

    Immigration Attorney
    Answered on

    An experienced EB-5 immigration attorney can guide you as to the required documents for an EB-5 compliant project. The feasibility study verifies details such as marketing data to support the economic report.

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    J Bruce Weinman

    Immigration Attorney
    Answered on

    A feasibility, or econometric, study is used with regional center projects to show the indirect job creation. It is not often used for direct investments, because the comprehensive business plan should be enough to show the direct job creation.

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    Oliver Huiyue Qiu

    Immigration Attorney
    Answered on

    From USCIS'' perspective, a feasibility study is not required, but helpful to understand how the project can achieve the required job creation. USCIS has its own staff economists who look over both the business plan and any other supporting documents to determine whether the job number makes sense. For $3.5 million dollars, the number of required EB-5 investors may not justify the application for a regional center. However, whether to start a feasibility study remains an issue that needs to be balanced with all other factors, just so the EB-5 application can be convincing.

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    Fredrick W Voigtmann

    Immigration Attorney
    Answered on

    A feasibility study is not required, but it might be a good idea, depending upon the type of project and its scope. What is required by U.S. immigration law is a comprehensive business plan that complies with the Administrative Appeals Office precedent decision in Matter of Ho. Among the requirements listed in the decision is that business plan must be credible. A third-party prepared feasibility study might be expensive, but it will go a long way toward convincing the USCIS that your business plan is credible and feasible. If prepared in advance, it also might help considerably with your marketing efforts abroad. Given the fact that your project is relatively small, you might not need a full-blown feasibility study, particularly if there is enough industry data that is verifiable and supports your business model. You still must prove that the your business plan is based upon the verifiable data and that it is credible, but it might not require a full feasibility study.

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    Michael A Harris

    Immigration Attorney
    Answered on

    Having a feasibility study - in terms of a study of the prospective market conditions, potential revenues, etc. - will typically be needed for a regional center project. It may be recommended for a direct or standalone EB-5 project. The feasibility study will be useful for an economist, but perhaps more so for a business plan writer who will need to explain and justify how your budget assumptions were derived and sourced. The economic impact study will need to rely on the same planned expenditures and revenues that are forecasted in the business plan.

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    Salvatore Picataggio

    Immigration Attorney
    Answered on

    The economic impact study focuses on job creation, while the feasibility study shows why the new business is necessary and compares it to similar offerings in the same geographic area. This is a fairly new requirement that arose from the "tenant occupancy" issues of 2012, which brought a focus on the necessity of the business being created.

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    John J Downey

    Immigration Attorney
    Answered on

    The economic impact study is primarily to determine the number of jobs (direct and indirect) to be created. The feasibility study is for the investor to determine the viability of the investment. It should be done before the offering is put forth.

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