How do I as a real estate developer use the EB-5 direct investment route?

It is possible for individual investors to develop a project to associate with a Regional Center (the RC will charge fees for this association), so you can take advantage of indirect employment (which is often needed for RE projects).

Direct investment means you must create 10 full-time jobs for every $1.8 million invested by each investor. That is extremely difficult. If you can qualify as being in a TEA, that reduces the amount of investment to $900,000 each, and if you affiliate with a regional center, then you get to count indirect jobs which makes most of these projects viable.

The answer depends upon whether you want to collaborate as a regional center, a developer, a project promoter, or an investor. Regional centers look for projects they can sponsor by selling securities (usually a limited partnership interest) in the project to a foreign national with the knowledge that for each minimally $900,000 invested in the project that creates 10 full-time positions in the project, the investor has an opportunity to petition for an immigrant visa for him/herself, spouse and unmarried children under 21 years of age. The Regional Center loans the money to developers, usually with interest and balloon payment in 5 years. However, terms vary. Following the investment, investor files a petition for an immigrant visa with the USCIS. When it is approved, the investor, spouse and children apply at the U.S. Embassy for admission to the U.S. as a Permanent Resident. After two years, the investor and family members must file and prove that the funds invested created 10 full-time position in the project. If positions were not created or investor is not, otherwise, eligible to continue as a permanent resident, those persons would have no status in the United States and be subject to removal. The above is the general framework for EB-5. You can consider where you might fit. The 0.5% interest, of which you speak, could refer to the interest on loans from the regional center to developer. Contract terms have many qualifiers. The 0.5% could refer to the investor''s return on investment. Regional centers generally try to return some part, if not all, of the initial investment but returning interest gained from the developer is another issue. Most regional centers are a partnership with the investor as the limited partner and regional center as the general partner responsible for administering the partnership. Frequently, the interest gained on the loan to developers is consumed wholly, or in part, as administrative costs of the partnership. The portion of that interest that flows to the investor as return on investment varies.

Keep in mind that running an EB-5 real estate project and being an EB-5 investor should be approached as two separate things so you can understand each individually before considering whether to merge them. A direct EB-5 investment will require the business in which you invest to create 10 full-time jobs for American workers (among other things). It will also require the business to remain in compliance with EB-5 immigration rules for 5 plus years. Real estate development is probably not the best business for direct EB5 (from a job creation standpoint), but it is possible.