Does the EB-5 investment need to be made in a business or can it be made in projects that the city/state is undertaking? Are there any advantages to investing in a public-private EB-5 project? How are public-private EB-5 projects different from private EB-5 projects?
In reality, they are not particularly different. It may be more advisable to seek out projects that do have state or municipal involvement, such as bonds or grants as non-EB-5 funding. EB-5 funds must still be at risk.
An EB-5 new commercial enterprise must be a for-profit project, regardless of whether it is owned or developed by a public or private entity.
For EB-5 purposes, there really is no difference if the project is public-private or not. As long as all of the statutory and regulatory requirements are met, the project may proceed and the qualifying investors in that project may seek classification as EB-5 investors.
You can invest in public projects; some investors believe it is safer if a municipality is involved. Each one should be viewed under the lens of due diligence. You still have to have the investment at risk.
A public private project and a private project both have to be compliant with the EB-5 regulations and policies. Both types can be financially viable. One advantage of a public private offering is the possibility of Federal and State bond and/or grant funding for the project.
A public-private project has been advertised as safer than a purely private project for quite some time now. By the end of the day, almost all public-private projects are private projects in nature. In case of project failure, none of the failed projects in the current EB-5 history has received any government bailout of any sort. Therefore, it is good marketing strategy for some EB-5 projects to advertise themselves as a public-private alliance. A prudent EB5 investor should still approach such project with the same amount of scrutiny as if it is a private project.
EB-5 projects are private, although some have some government affiliation (e.g. the project could be building something for the government). Some regional centers go to great lengths to stress government affiliation, but you should investigate this carefully.
All EB-5 projects are private, meaning there is no government entity being a shareholder or member of it.
EB-5 is sometimes used to supplement a public project, and is usually done through a regional center dedicated to that project. In other instances, EB-5 can be used without a regional center, which of course increases the minimum investment. The one thing about a public project is governmental oversight, which in theory should provide better optics into how things will work and how the money will be deployed.
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