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How can EB-5 investors use jobs created before their investment toward their permanent residency?

I was talking with a regional center about an EB-5 project that has already started with bridge loans. The money from EB-5 investors will replace the bridge loans. I was told that the project has not recruited any EB-5 investors yet and that I would be among the very first to join. According to the regional center, some jobs have already been created and could be used to fulfill the job-creation requirements. Is it true that EB-5 investors can use jobs created before they make the investment toward their permanent residency?

Answers

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    Dale Schwartz

    Immigration Attorney
    Answered on

    The regional center will allocate the people hired to each investor. I believe they can count jobs created even before you invested the money with them. Do you have an EB-5 lawyer helping you?

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    Charles Foster

    Immigration Attorney
    Answered on

    Yes, EB-5 investors can, under certain conditions, use jobs created before then to make the investment toward permanent residency in order to replace a bridge loan.

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    Julia Roussinova

    Immigration Attorney
    Answered on

    It is possible if the regional center project incorporates bridge financing being replaced with EB-5 funds. It is very important, though, that you engage the services of an experienced EB-5 attorney to review all offering documents of a particular project to ensure it is EB-5-complaint before you invest.

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    A Olusanjo Omoniyi

    Immigration Attorney
    Answered on

    That is not necessarily true in all circumstances. You should secure all subscription related information, then do due diligence and ask relevant questions at least for verification purposes to ensure that the information provided by the regional center in question is in compliance with the rules an regulations governing EB-5. Advisably, consult an EB-5 attorney to ensure appropriate steps are taken prior to proceeding with any agreements with the regional center.

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    Bernard P Wolfsdorf

    Immigration Attorney
    Answered on

    USCIS' bridge financing policy has supported the underlying policy of preserving a nexus between the EB-5 capital and the creation of jobs, thereby preventing use of EB-5 capital to refinance existing projects. There has been some tightening of the rules and there was talk of a requirement that first, the EB-5 capital must be physically transferred to the job-creating entity, which can then use the EB-5 capital to repay existing bridge loans. In other words, EB-5 capital cannot be used by an interim entity, likely a mezzanine borrower, to directly repay the bridge financer. Likewise, a new commercial enterprise should not pay the bridge financer directly, but instead transfer the funds to the job-creating entity for immediate subsequent repayment of the bridge funding. Second, USCIS stated that contemplation alone does not create an "incontrovertible" nexus between the EB-5 capital and the bridge financing. Instead, the loan must be temporary in nature; it cannot appear to be permanent. Make sure you are aware of the government concerns before investing.

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    Belma Chinchoy

    Immigration Attorney
    Answered on

    This is fine where the project incorporates a bridge loan.

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    Lynne Feldman

    Immigration Attorney
    Answered on

    Yes, it is true.

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    Mark Davies

    Immigration Attorney
    Answered on

    You have to be extremely careful with all EB-5 projects to ensure that: the projects meet the requirements of U.S. immigration laws; and that, from a legal perspective, the investment is structured so that your legal rights as an investor are protected and that, from a legal perspective, your investment is properly and legally secured. One area where there has been some movement on the immigration requirements side is bridge loan financing. The U.S. courts have intervened in this area and may continue to do so. While I do not agree, some well-known U.S. immigration lawyers have expressed a view that all bridge loan financing might ultimately be disallowed. Although USCIS currently accepts bridge loan financing and approves some petitions based on it, you need to ensure that the applicable terms and conditions are properly structured. The key is the proper review of the original financing documents by a lawyer familiar with lending documents in an EB-5 context. In summary, jobs that have already been created can be used for EB-5 purposes, but: one, you must have the applicable document reviewed by a lawyer familiar with both EB-5 requirements and lending documents (if the RC will release all relevant documents to you); and two, realize that this area has been in flux and current U.S. policies may change.

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    Phuong Le

    Immigration Attorney
    Answered on

    It's true that investors can receive credit for jobs created before they actually invest if it's based on qualifying bridge financing that the project used. The devil is in the details, however. The burden is on the project to prove that the bridge financing that it is replacing with EB-5 funds is acceptable to USCIS. One easy way is if the project filed an I-924 exemplar that has been approved that contains the proposed bridge financing. Double-check with them.

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    Jinhee Wilde

    Immigration Attorney
    Answered on

    Many regional centers have counted jobs created before the investment is made, as their job creation is based on an economic model and methodology based on induced and indirect jobs. However, each project is different and what the documents prove to show the economic model varies from regional center to regional center. Not all regional centers are the same and documents they prepare varies greatly also. Be careful and be diligent in reviewing the documents and work with your lawyer to get expert advice for you, not just from the regional centers.

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    Marko Issever

    EB-5 Broker Dealer
    Answered on

    The regional center is most likely correct, as they must be relying on a policy memo released by USCIS on May 30, 2013. According to this memo, "Generally, the replacement of bridge financing with EB-5 investor capital should have been contemplated prior to acquiring the original non-EB-5 financing. However, even if the EB-5 financing was not contemplated prior to acquiring the temporary financing, as long as the financing to be replaced was contemplated as short-term temporary financing which would be subsequently replaced, the infusion of EB-5 financing could still result in the creation of, and credit for, new jobs."

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    BoBi Ahn

    Immigration Attorney
    Answered on

    The EB-5 regulations state that the EB-5 investor's investment must result in the creation of 10 jobs. If the jobs were created or existed prior to the the investment, those jobs would not qualify under normal circumstances.

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    Salvatore Picataggio

    Immigration Attorney
    Answered on

    In a properly arranged bridge loan scenario, the jobs created by the earlier loan can create jobs the EB-5 investors can use. I would want to review the documentation carefully.

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