+1-800-997-1228
Questions & Answers

When must construction begin on an EB-5 project?

I have some questions about the EB-5 project development timeline. First of all, how long does it generally take for a developer with a potential project to affiliate with an existing EB-5 regional center? Secondly, when must construction actually begin on the EB-5 project - should construction begin before EB-5 investors make any investment?

Answers

  • Avatar

    Ed Beshara

    Immigration Attorney
    Answered on

    A developer can associate with an existing regional center even after construction has started as long as EB-5 funding was contemplated. Therefore, traditional funding can start the construction while the subsequent EB-5 funding can pay off the more expensive traditional construction funding.

  • Avatar

    John J Downey

    Immigration Attorney
    Answered on

    This all depends on the individual project. There is no way to tell how long it will take a developer to find investors. The project need not begin until investors are located. If the project is underway when investors are added, you must show how the investment capital provided the necessary amount of jobs.

  • Avatar

    Fredrick W Voigtmann

    Immigration Attorney
    Answered on

    Each EB-5 project has its own history and unique path from the planning stages to when a developer and regional center affiliate and draft the offering documents to be presented to potential EB-5 investors. Some projects takes months, some take years before the offering complies with all legal requirements and is ready to market. As for construction, the same is true. Some projects have a bridge loan or other interim financing so that they can begin construction before the EB-5 piece is obtained. Other projects use the EB-5 capital as a basis to make up the difference between the owner's equity and traditional financing (this is EB-5 capital used as mezzanine financing). In any case, the EB-5 capital must be at risk and used for job creating purposes. That means the project can plan to use EB-5 capital to replace earlier capital (bridge financing after the start of construction) or to fit into the capital stack as a mezzanine piece that is obtained before construction even starts.

  • Avatar

    Salvatore Picataggio

    Immigration Attorney
    Answered on

    Sorry for the "lawyer" answer, but it depends. Often, construction does begin before investment, and EB-5 funds are used to pay off construction loans (but still get credit for the jobs created!).

  • Avatar

    Lynne Feldman

    Immigration Attorney
    Answered on

    There is no requirement to affiliate with an existing regional center. It can proceed as a standalone project, but you will need ten direct jobs within two years.

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.