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How can EB-5 investors invest in a real estate development project that is not connected with a regional center?

I am a U.S. citizen who works for a real estate development company. My brother doesn’t have U.S. citizenship and wants to apply for the EB-5 program. Instead of selecting a project offered by other developers, he wants to invest in a project in my company. However, our company doesn’t have any cooperation with regional centers. If he invests in our projects, will he meet the requirements of EB-5?

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    Marko Issever

    EB-5 Broker Dealer
    Answered on

    The short answer is yes, but there are a lot of caveats. The most important consideration is the pending regulations that are set to go into effect by Nov. 21, 2019. My guess is that it will be quite difficult to be ready by that date. Your brother would be much better off investing in a ready-to-invest regional center project at this point. This way, he could start the process by investing only $500,000. He could always invest in your company additional funds for profit objectives. Aside from the time constraint with the approaching Nov. 21 deadline, with direct investments only full-time positions can be counted to qualify for EB-5. In contrast, regional center projects give credit for indirect and induced jobs, in addition to direct jobs. You would also need a business plan to qualify as an EB-5 direct investment. The geography of your company also matters. If the location is deemed to be non-TEA and he delays filing the necessary papers, he could be required to come up with $1.8 million as the required capital, making the whole project potentially not feasible. At any rate, the best course of action is to engage an immigration attorney and get proper advice.

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    Dale Schwartz

    Immigration Attorney
    Answered on

    What you suggest can indeed be done, if done properly. Will the real estate development hire 10 more full-time employees than it has now? It must to qualify for EB-5 investment treatment. Where is the property located? If it is in a high-unemployment area or a rural area, it can qualify for $500,000 investment. If not, the minimum investment is $1 million. On Nov. 21, 2019 (in three months!), those numbers go up to $900,000 and $1.8 million, respectively. So his case would have to be filed before Nov. 21 in order to qualify at the lower numbers. It can be done, but you would have to start very soon! You must get a comprehensive business plan done by a professional, and that usually takes several weeks.

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    Charles Foster

    Immigration Attorney
    Answered on

    Yes, your brother can make a direct EB-5 investment in your project, provided it creates 10 new direct jobs and at least $500,000, if located in a TEA, before Nov. 21, 2019.

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    Lynne Feldman

    Immigration Attorney
    Answered on

    Hard to know without analyzing the jobs to be created, location of the project, etc.

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    Daniel A Zeft

    Immigration Attorney
    Answered on

    You need a consultation appointment with an immigration attorney who is knowledgeable regarding EB-5 matters.

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    Bernard P Wolfsdorf

    Immigration Attorney
    Answered on

    You may want to consider affiliating with a regional center since that way you can count indirect jobs. It is very hard to make 10 full-time jobs for only $500,000 invested.

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    Vaughan de Kirby

    Immigration Attorney
    Answered on

    In all likelihood, an investment with your company will not work for your brother's EB-5. However, the best way to answer this question is for you to meet with an experienced EB-5 investment attorney.

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    BoBi Ahn

    Immigration Attorney
    Answered on

    Investment of capital does not have to be connected to or in a project under a regional center in order for it to qualify for EB-5 processing, as long as he and the project meet the other requirements (i.e., investment of the requisite minimum capital, job creation, legitimacy and viability of the business).

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