EB-5 Commentary

EB-5 Regional Center Application Approval Times

Posted by Phil Cohen on Tue, Nov 24, 2015 @ 07:17 AM

One of the most common questions EB-5 professionals are asked from those thinking about starting an EB-5 regional center is, "How long will it take to get approved?"

The answer to this question is multi-layered.  The actual time it takes for USCIS to process an EB-5 regional center application is constantly changing.  Officially, the last-posted processing time on the USCIS website was as follows (I-924 is the official name for an initial regional center application package):

EB-5 Processing Times    Source: USCIS

What people really want to know, however, is how long it takes to get money in the door. There are several things to consider in order to get the real answer here:

  1. Do you have your team together?  This is a critical first step; it is important to understand who you need and how to choose your team.  This step should not be rushed.
  2. Do you have all the answers that your team will need?  Do you know what those things are?  Save yourself a ton of time and expense by finding good resource to help you understand what you'll need to get started.  This information goes beyond a normal start-up's requirements and waiting until you have your (often expensive) team together means that you will quickly come to rely on them for guidance on things that you might have easily discovered on your own at far less expense with a good resource.
  3. Is your deal good or great?  Talk to marketers early on to understand what will make a deal stand out in today's market.  Good deals can sell; great deals will sell faster.
  4. From there the package needs to be assembled and your team of experts need to do their thing.  Depending on your EB-5 regional center's complexity, expect anywhere from 1 to 2 months on average to get your package assembled and ready for submission.  Most experts will tell you that the clients take much longer.
  5. Once your package is submitted you can start marketing.  How will you market to foreign investors?  How big is your raise?  How saleable is your deal? The answers to these questions will have an impact on how quickly you can get the capital you are seeking.
  6. Once you win investors, each investor must submit their own petition to have themselves approved as an EB-5 investor.  This adds several months to the process (for each investor).
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Phil Cohen is the founder and President of Strategic Element, a company that focuses on developing regional centers, EB-5 business plans, economic impact reports, feasibility studies and custom 'direct' EB-5 projects for its clients (www.strategicelementconsulting.com). 

 

Tags: EB-5 center I-924, EB-5 Team, I-526, EB-5 Regional center processing times, I-924, EB-5 Regional Center, job creation

Counting Construction Jobs for EB-5 Regional Center Job Creation

Posted by Phil Cohen on Wed, Oct 14, 2015 @ 02:05 PM

Do Construction Jobs Count?construction resized 600

When starting an EB-5 regional center many want to know if direct construction jobs can be counted.  The applicable rule for counting construction jobs in an EB-5 regional center project is that the construction time for the project must be two years in duration, from start to finish. If the project qualifies, direct construction jobs can be counted, but due to the nature of construction (teams work for relatively short time periods) these jobs must be calculated by an economist. Indirect construction jobs calculated by an economist are always allowable.

How is 2 Years Defined?

There is some question as to when the construction period starts; is it when demolition or digging begins or is it when concrete is poured (i.e. the beginning of vertical construction)?  USCIS does not have a definitive guideline on this point, however, we do try to encourage clients to try to focus on vertical construction in order to mitigate the risk that USCIS may not view demolition or digging as construction.

3rd Party Verification

Of course, as soon as this construction allowance was declared, there were many who started to say, "we can make it last two years."  Unfortunately it's not that easy.  USCIS has taken steps to prevent people from exaggerating construction timelines by asking for third party verification of estimated construction times from independent experts. 

Doing it Right

The ability to count construction jobs is a huge benefit to the EB-5 program, because they are easy to document and they are relatively easy to fulfill.  Be sure, however, that if your regional center is planning to count construction jobs that it does so in a calculated and realistic way.  Remember too that if you are calculating construction jobs based on expenditure estimates, you should be careful about using conservative expenditure estimates.  While conservative estimates are desirable at most any other time, if your estimates are guessing high on expenses, and you come in under budget, the applicable construction job calculation for your investors at the I-829 stage (when they are seeking to get conditions removed from their green card) will be based on the actual funds expended.  This point is true of course for all expenditure-based job creation estimations.

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Phil Cohen is the founder and President of Strategic Element, a company that focuses on developing regional centers, EB-5 business plans, economic impact reports, feasibility studies and custom 'direct' EB-5 projects for its clients (www.strategicelementconsulting.com). 

Tags: Construction, EB-5 Project, EB-5, EB-5 Regional Center, job creation

Are Jobs Created by Tenants Eligible for EB-5 Job Creation?

Posted by Phil Cohen on Tue, Oct 06, 2015 @ 02:48 PM

Tenant occupancy job creation in an EB-5 business plan

I am often asked about whether an EB-5 project can count jobs that are created by tenants of a particular development.  For example, if someone is developing an EB-5 project or business plan to build a shopping mall and each individual shop is leased out to third parties who will operate their own retail businesses, can all the jobs created by the tenants be counted towards qualifying EB-5 job creation?

The short answer to this question is yes, it is possible, however, where this was once an easier task to accomplish, USCIS has since issued guidance that must be adhered to in order to qualify these positions.

The following is the guidance language issued by USCIS on the matter, however, as is often the case there is a question of interpretation on several points.  We have added our own comments to the text (in bold) but please recall that we are not lawyers and our interpretations are based solely on the language we see.  Many of these will likely require change as adjudications clarify the policy.

From USCIS December 20th, 2012

"December 20, 2012 GM-602-0001
Guidance Memorandum

SUBJECT: Operational Guidance for EB-5 Cases Involving Tenant-Occupancy


Purpose

This guidance memorandum (GM) is intended to facilitate adjudication of cases involving issues related to the "tenant-occupancy" methodology for establishing job creation in EB-5 cases. The guidance has been formulated following careful internal deliberation, consultation with sister government agencies, and review of responses to requests for evidence (RFEs) issued in February 2012 to a number of outstanding Regional Center applicants who relied on the tenant-occupancy methodology. This guidance will be applied to pending cases and cases filed on or after the date of this guidance that rely on the tenant-occupancy methodology. This guidance does not rescind or supersede other EB-5 guidance.

Scope

Unless specifically exempted herein, this GM applies to and binds all U.S. Citizenship and Immigration Services (USCIS) employees.

Background

Among the issues raised in the February 2012 RFEs, USCIS sought evidence that the projected jobs attributable to prospective tenants (which would occupy the commercial space created by the EB-5 capital) would represent newly created jobs, and not jobs that the tenant had merely relocated from another location. This determination is necessary to assess whether there is a reasonable causal link between the EB-5 enterprise and the job creation that would allow for the attribution of the tenant jobs to the EB-5 enterprise. These RFEs suggested the types of evidence applicants could submit to make this showing.

Implementation

Prior to issuing the February 2012 RFEs, USCIS determined that the tenant-occupancy methodology can satisfy the EB-5 program requirement of presenting a "reasonable methodology" that is "supported by economically or statistically valid forecasting tools," if the applicant presents in "verifiable detail" information sufficient to establish by a preponderance of the evidence that the tenant jobs have resulted from the EB-5 enterprise (i.e., that the creation of tenant jobs were facilitated by the EB-5 enterprise, for example through a showing of constraint on the supply of appropriate commercial space or of excess demand for such space)."

Our interpretation: have to show excess demand or constraints on supply

"In regional center cases that rely on tenant occupancy models, as in any other regional center
cases, USCIS requires evidence that the claimed jobs result, directly or indirectly, from the
economic activity of the EB-5 commercial enterprise. Jobs that are merely re-located rather than created do not count. With respect to indirect job creation, the task for the applicants and
petitioners is to project the number of newly created jobs that would not have been created but for the economic activity of the EB-5 commercial enterprise. In making that projection, they are to use economically and statistically valid forecasting tools."

Our comment: This can be done by an economist, above and beyond the normal economic impact report

"Whether an applicant or petitioner has demonstrated that an EB-5 enterprise caused the creation of indirect tenant jobs will require determinations on a case-by-case basis and will generally require an evaluation of the verifiable detail provided and the overall reasonableness of the methodology as presented. To claim credit for tenant jobs, applicants and petitioners may  present evidence backed by reasonable methods that map a specific amount of direct, imputed, or subsidized investment to such new jobs."

Our Comment: things such as tenant improvements and, rent abatements MAY qualify as a form of investment.

"However, for applicants and petitioners that instead seek to utilize a facilitation-based approach, USCIS will not require an equity or direct financial connection between the EB-5 capital investment and the employees of prospective tenants."

Our interpretation: if we are facilitating the development of a new business (e.g. setting up a building geared to restaurants with a kitchen, etc.), then USCIS does not need to see an overt nexus between money and jobs.

"Rather, facilitation-based tenant job credit will depend on the extent to which applicants or petitioners can demonstrate that the economic benefits provided by a specific space project will remove a significant market-based constraint. One way applicants and petitioners can make this showing is to indicate how a specific space project will correct market imperfections and generate net new labor demand and income that will result in a specified prospective number of tenant jobs that will locate in that space.

Our Interpretation: creating new demand for business by creating that business in the first place, will in effect create new job demand.

Continuing below: investing in a specific market category in a high unemployment area the project need only show that they are filling an 'investment void' to generate new demand.

"In high unemployment areas in which new projects are not likely to significantly displace other income or labor, applicants and petitioners should generally indicate how a specific project will fill an existing investment void in that area to generate new demand for the tenant business. Prospective tenant jobs demonstrated by reasonable methods and supported by verifiable evidence pursuant to the above approaches may be used as direct inputs into appropriate regional growth models to generate the number of indirect and induced jobs that result from the credited tenant jobs."

"Where applications for regional centers are approved based on their use of tenant-occupancy
projections, the approval notices should contain appropriate language regarding the assumptions underlying the approval, which if not borne out may impact related adjudications at the I-526 or I-829 stages. 1  For example, a Form I-924 with I-526 exemplar may be approved where no specific tenant has been identified to occupy space but where the applicant or petitioner reasonably projects that a restaurant will eventually lease the premises.2  If, after approval of the I-924, the space is leased to a different type of tenant (i.e., a type of restaurant that yields different expected employment or a non-restaurant), or fails to achieve previously projected occupancy rates, such a change alone will not generally constitute a material change that triggers the elimination of deference in an actual Form I-526 or negates any possibility of individual investors removing their conditions at the Form I-829 stage."

Our Interpretation: an I-526 exemplar based on tenant occupancy may be approved based on the projection that a certain type of tenant will lease the space. 

"3  However, while such modified tenancy arrangement(s) may be permissible under EB-5 program rules, they could nevertheless impact the project’s ultimate job creation numbers. Therefore, the approval notice should caution that the approved job creation estimates are based on a restaurant occupying that space, and that if no tenant or a different type of tenant eventually occupies the space, the economic impact analysis and ultimate job creation numbers will be revisited in future adjudications that relate to that project.

USCIS will issue separate guidance on crediting jobs in a situation where more than one EB-5 entity may be seeking credit for the identical job position. In the interim, where only one case filed with USCIS has sought credit for a specific job position, that case should be credited with the job, provided that all program requirements have been satisfied.

Adjudication of cases involving tenant-occupancy should proceed based on these principles.

Use
This GM is intended solely for the guidance of USCIS personnel in the performance of their official duties. It is not intended to, does not, and may not be relied upon to create any right or benefit, substantive or procedural, enforceable at law or by any individual or other party in
removal proceedings, in litigation with the United States, or in any other form or manner."

 

Final Word

Ultimately, the rules set some guidelines but we have seen considerable push back from USCIS in terms of how these guidelines have been interpreted in some cases.  Those wishing to include tenant occupancy job creation in their EB-5 business plans, should try to work with counsel who is experienced in the area and in particular who has been able to study some related RFEs.  Because of the pushback we have seen on the issue, we tell our clients to carefully consider how important it might be for them to be able to count tenant occupancy jobs, and that if they want to pursue this course, they should be prepared to jump through some hoops.

From a marketing perspective, due to the likelihood of a project getting RFEs in relation to tenant occupancy job claims, one should assume that the investor and agency community might be less enamored by a business plan showing tenant occupancy jobs, especially if it has not yet been approved by USCIS.

 

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Phil Cohen is the founder and President of Strategic Element, a company that focuses on developing regional centers, EB-5 business plans, economic impact reports, feasibility studies and custom 'direct' EB-5 projects for its clients (www.strategicelementconsulting.com). 

 

 

Download Your Free Paper:  9 Things to Know  Before Going Down  The EB-5 Road

 

Tags: EB-5 center I-924, EB5 Regional center, EB-5 Project, EB-5 investors, I-526, tenant occupancy, EB-5 regional centers, EB-5, EB-5 Regional Center, job creation

The Risks and Rewards of EB-5 Investment

Posted by Phil Cohen on Thu, Jun 04, 2015 @ 10:46 AM

Risk and Reward

While EB-5 capital is commonly used for mezzanine capital by the companies raising funds, the investors essentially face a venture capital-level risk profile. When considered in this way, the return in dollars to an EB-5 investor is considerably below market for this risk profile.  This is no secret and it is the model that the industry has settled into, for the most part.  This model appears to make sense for all concerned since the investors get the added benefit of a path to US citizenship if the businesses create the requisite jobs, giving them enormous perceived value for their investment, while at the same time the project developer faces additional risk, time and cost in setting up a project to fit the EB-5 program.

With this view in mind, one should remember that venture investment is inherently risky, ask any venture capitalist.  Even better, have a look at venture capital funding lists to see the kinds of businesses that get funded every day by seasoned investors, some very odd and seemingly risky businesses indeed.  According to a September 2012 Washington Post article, “About three-quarters of venture-backed firms in the U.S. don't return investors' capital, according to recent research by Shikhar Ghosh, a senior lecturer at Harvard Business School”.  By comparison projects that I’ve seen available via the EB-5 program today would seem to be far less risky than that, on the whole.

This is not to say that some deals in the EB-5 marketplace do not, in some cases, put forward overly aggressive projections and/or assumptions, but this is true of many businesses seeking funding, whether they are seeking EB-5 capital or not. Like for any business investment, investors must thoroughly investigate the EB-5 project's business plan, claims being made, the team and even the companies who are representing the deals.  This can be done in part by feasibility studies or by other consultants who specialize in project reviews, feasibility studies or the like.

Managing Risk

Are there people with bad intentions in EB-5?  There is no doubt that there are people out there who might come to think that investors will be blinded by the possibility of attaining a green card and will fall for a bad deal without looking at it too closely.  While this is not true for the great majority of EB-5 deals that this author has seen, nobody can say that it hasn't happened.

Should an investor be careful in making an EB-5 investment? 100% and unequivocally yes! Investors must investigate any project that they are looking at investing their hard-earned dollars into and this cannot be stressed enough.  Every deal has pros and cons and good and bad elements and the investor should weed out all the risks for themselves (or get a knowledgeable consultant who can help them) so that they can make a decision that they are comfortable with.   Will there be deals out there that don’t succeed? Likely so; it is a free market after all and the statistics for failures of new businesses in America show relatively high numbers. It would be safest for investors to assume that EB-5 deals would not be different on the whole, although EB-5 deals are often brought to market by experienced teams and the author does not believe that EB-5 business failures are even in the same ballpark as published statistics on the whole.

There are many deals for EB-5 investors to choose from today and investors must choose the project and risk profile that suits them best, and again, they absolutely must investigate any business deal, EB-5 or not.  I have seen investors willing to take undue risk in their EB-5 investments in their eagerness to move themselves toward the opportunity to participate in the American dream.  Spending more time to check out every detail, however, will help to ensure that the investor can choose an investment leads the desired result with the least amount of risk.  So EB-5 investors don't rush, investigate everything and then make the choice that you are most comfortable with.

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Phil Cohen is the founder and President of Strategic Element, a company that focuses on developing regional centers, EB-5 business plans, economic impact reports, feasibility studies and custom 'direct' EB-5 projects for its clients (www.strategicelementconsulting.com). 

 

Tags: capital raise, EB-5 Team, EB-5 Project, EB-5 explained, EB-5 investors, EB-5 regional centers, EB-5, job creation

Why an Increased Minimum Investment is Not Necessarily Bad for EB-5

Posted by Phil Cohen on Wed, May 20, 2015 @ 11:53 AM

As readers of this blog are likely aware by now, there is discussion takiEB 5 Investment Cost resized 600ng place which may result in the increasing of the minimum investment required for EB-5 investors from $500,000 to $750,000 (or possibly more) in a TEA (Target Employment Area) project.  As the EB-5 program continues to increase in popularity, the first concern among regional centers is whether or not this will reduce the size of the investor pool and therefore make raising capital more difficult in the program.

It is our opinion that this change would not severely affect the program for 3 main reasons:

  1. (China) EB-5 demand is likely to stay high: Some leading economists are suggesting China may be in for a difficult economic period in the coming years.  I will refrain from restating the analyses that lead to this conclusion, however, it is an important possibility.  In the event that this forecast comes to pass, it is suggested that many in China will perhaps have an increased sense of urgency with regard to developing the opportunity for US citizenship while they can.  Arguably tied to this point is the fact that many would also seek to make investments in other economies not facing similar difficulties.  Even in the event that this forecast does not turn out to be accurate, the implication would be a continued rise in Chinese prosperity thereby continuing to increase the number of individuals who would be capable of making an EB-5 investment.  Either way, in our opinion, we believe demand should remain high.

  2. Bigger impact of EB-5 marketing dollars:  EB-5 regional centers and/or project owners will have to recruit fewer investors in order to raise the same amount of money if the minimum is higher.  Less time spent overseas marketing projects and a quicker path to getting money in the door speaks for itself.

  3. Easier to meet job creation requirements:  With EB-5 regional centers and/or project owners able to raise more dollars per investor, the ultimate requirement for job creation will be reduced.  This means that regional centers will either have to create fewer jobs for the same amount of capital or in other cases they will be able to raise more capital for their projects because their project’s job creation capabilities will give them access to more capital from the same number of investors.

Ultimately, if this change comes to pass it is our opinion at Strategic Element that it will be a good thing for the EB-5 program and therefore a good thing for America.

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Phil Cohen is the founder and President of Strategic Element, a company that focuses on developing regional centers, EB-5 business plans, economic impact reports, feasibility studies and custom 'direct' EB-5 projects for its clients (www.strategicelementconsulting.com). 

 

 

  Download Your Free Paper:  9 Things to Know  Before Going Down  The EB-5 Road

Tags: EB5 capital, Target Employment Area, EB-5 investors, EB-5, EB-5 Regional Center, job creation

Guest Expenditures in EB-5: A Double-edged Sword

Posted by Phil Cohen on Mon, Apr 27, 2015 @ 06:55 AM

On the February 26, 2014 stakeholder’s call EB-5 Investmentwith USCIS they clarified when indirect job creation could be attributed to guest expenditures.  This is good news primarily because guest expenditures were never allowed to be used before.  More specifically, USCIS stated that guest expenditures could be counted when a project:

  • is serving an unmet demand in its area
  • is providing a differentiated product (i.e. a
    product that is not otherwise available in the area) targeted to a specific
    market segment
  • is being developed in response to
    (and presumably to serve traffic resulting from) a new development in the community

On the surface, this appeared to be good news for the EB-5 community, as guest expenditures can have a significant impact on indirect job creation figures.

The Downside

There is a downside, however.  As many have documented in the case of tenant
occupancy, it often proved to be very difficult to know exactly how USCIS would interpret various attempts to meet the standards, given that they are not very specific.  With approval times as long as they are today, the unknown is whether or not USCIS would accept given justifications on a case-by-case basis. Since guest expenditures could arguably have an impact on job creation and therefore the amount of money that an EB-5 project could raise from EB-5 investors, this unknown could have an impact on the capital stack and project timing if there is a delay or considerable back-and-forth in dealing with USCIS.  

To the extent that a project can afford the time or can otherwise be flexible in terms of their capital stack, attempting to use guest expenditures can have a significant upside.  Most, however, would find that it would be very challenging to have to change an anticipated capital stack according to whether or not the use of guest expenditures would be allowed.

Over time, it is anticipated that more clarity will come both from USCIS in terms of policy memoranda and from the EB-5 community as we see what is accepted and what is not and the  reasons for those decisions.  In the meantime, however, many have seen significant pushback from USCIS when they have attempted to use guest expenditure.

Investors would also do well to try to recognize when guest expenditures are part of the plan, especially in a case where a hypothetical plan was submitted.  Until there is more clarity on what will be acceptable in the eyes of USCIS, guest expenditures can add some additional potential risk or delay in relation to the investor's approval at the I-526 stage.

 

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Phil Cohen is the founder and President of Strategic Element, a company that focuses on developing regional centers, EB-5 business plans, economic impact reports, feasibility studies and custom 'direct' EB-5 projects for its clients (www.strategicelementconsulting.com). 

Tags: EB-5 center I-924, capital raise, EB-5 Regional Center Application Cost, EB5 capital, EB-5 investors, applications, USCIS, tenant occupancy, I-924, EB-5, EB-5 Regional Center, job creation

The Importance of a Buffer in EB-5 Job Creation

Posted by Phil Cohen on Mon, Feb 23, 2015 @ 06:17 AM

This a re-post of an earlier blog article, but because of its importance to investors, we felt it was worth mentioning it again.

When starting an EB-5 regional center or EB-5 project, many look to the regulations as the Start EB 5 Buffer resized 600guideline to what is required to have a successful EB-5 offering.  The guidelines, however, are only the beginning.  Starting an EB-5 project requires thinking that will not only get USCIS approval but which will also win over investors.  To this end, it is wise to consider the job creation component with the inclusion of a buffer of extra jobs.

Why Have a Buffer at All?

Creating a buffer of more jobs than are actually required by the program has the benefit of added security to investors, which in turn means added security for the project in terms of its ability to win investor interest in the first place and ultimately to maintain a reputation for successfully delivering job creation to investors, the core measure of success to all future investors.

Having a buffer of more jobs than are required by the program means that if things don't go to plan and not all the direct jobs that were originally planned can be created, investors will not lose the opportunity to have the conditions removed from their green cards at the I-829 stage.

Where indirect jobs are concerned, job creation counts will be dependent on fulfilling the inputs that the economist had used to develop the indirect job creation calculation.  Most business people will take a conservative approach to planning their businesses, which means guessing high on costs and guessing low on revenues.  If costs are over-estimated, however, and these costs were counted as the input of investment used by the economist in his or her calculation, this conservative approach can backfire.  While coming in under budget is certainly a respectable and desirable outcome in almost any business scenario, a lower investment input to the project can mean that the originally-calculated number of indirect jobs may have to be revised downward to match the revised input, thereby meaning less jobs to go around for EB-5 investors.

How Much is Enough?

A good rule of thumb for a job creation buffer is to plan to create 20% more jobs than needed, or a total of 12 jobs per investor.  This is not a hard and fast rule but certainly 15%-20% is  recommended for those newer to the space as a minimum in order to be competitive.  With proven experience and track record, more leeway can be taken in the fullness of time.  Bear this in mind when developing your EB-5 business plan and financial projections.

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Phil Cohen is the founder and President of Strategic Element, a company that focuses on developing regional centers, EB-5 business plans, economic impact reports, feasibility studies and custom 'direct' EB-5 projects for its clients (www.strategicelementconsulting.com). 

 

Download Your Free Paper:  9 Things to Know  Before Going Down  The EB-5 Road

 

Tags: EB5 capital, EB-5 Project, EB-5 explained, EB-5 investors, I-526, EB-5 Business plan, EB-5 Regional Center, job creation, What is EB-5?

Franchises can be the Best Path to EB-5 for Many Investors

Posted by Phil Cohen on Wed, Dec 10, 2014 @ 02:20 PM

The ChallengeFranchise can be great EB-5 Opportunities

As a young man, I went to Taiwan to teach English for several months.  Almost immediately, I was struck about how challenging it was to do the simplest of things such as walking down the street to browse some shops or buying some toothpaste.  English was taught in schools, but very few people would speak it in the street and all the signs were in Chinese and so on.  Sooner or later I learned a little Mandarin and became fascinated with Chinese culture, but still, the more I learned the less I understood.

Remembering this experience helps me to understand, in part, some of the challenges faced by overseas investors, particularly those who do not speak English very well or who are not familiar with how we do business.  Of course, when it comes to investing in EB-5 projects we are talking about far more than buying a tube of toothpaste and that merely adds to the complexities they face.

There are many strong EB-5 investments out there, but there are arguably many EB-5 opportunities that are far less so.  Add to this some of the program's high-profile failures (few as they may be) and one can see why some investors may be hesitant to trust some regional centers, even those that appear to be the 'real deal'.

The Direct Alternative

For the reasons stated above, we are seeing an upswing in interest among investors in investing in 'direct' EB-5 projects (projects outside of regional centers), commonly because there is a far more direct relationship between the investor and the business owner and the business in question is usually smaller and easier to grasp and assess.  The other main reason is that EB-5 investors can also start their own qualifying businesses which they can control, thereby minimizing the risk (in the investor's opinion) of not achieving the required job creation or of failure of the project overall.

How then, does the foreign investor whose English may not be so good or who does not know our business customs get the best of all worlds?  One way is to find the 'right' small or mid-sized business that is being run by a trustworthy individual.  Another opportunity can come in the form of starting a franchise operation.

Why a Franchise?

Franchises work for EB-5 investors for several reasons:

  1. Franchises have proven business models.

  2. Franchise companies can help with top-notch market research.

  3. Franchises (mostly) have very specific operational guides which take the mysetry out of day-to-day operations for the uninitiated.

  4. Franchises can be put together with experienced and successful operators so that the EB-5 investor's involvement can be limited to setting policy, high-level strategy and management decision making, thereby making the day-to-day operation more of a turnkey situation.

The above list is one of the reasons that Strategic Element has developed a new offering helping EB-5 investors to find the right franchise and to get the operation up and running with experienced operators.

Navigating the waters of a new country and culture can be difficult indeed, however, depending on one's preferences and investment parameters, there are always different ways to carve out opportunity.  Ultimately, the first step is to decide what kind of investment one is most comfortable with.

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Phil Cohen is the founder and President of Strategic Element, a company that focuses on developing regional centers, EB-5 business plans and custom 'direct' EB-5 projects for its clients (www.strategicelementconsulting.com).

 

Download Your Free Paper:  9 Things to Know  Before Going Down  The EB-5 Road

Tags: EB5 capital, EB-5 Project, EB-5 explained, EB-5 investors, EB-5 regional centers, job creation