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How Much Does an EB-5 Visa Cost?

A hand filling out a visa application form with a passport, money for travel and relocation costs, and boarding passes on a desk.

The EB-5 immigrant investor program is one of the quickest ways for foreign nationals to gain lawful permanent residency in the United States.

However, navigating its process and requirements can be confusing. In addition to the minimum required investment amount, investors are responsible for paying EB-5 administrative fees and filing fees, which can vary between individuals and also change from time to time.

Because of this, it’s not surprising that many EB-5 investors ask us how much an EB-5 visa costs.

You’ll want to be aware of these fees to ensure your budget will accommodate them at each stage of your EB-5 journey.

This article explains the different fees you can expect to pay throughout the application process.

What Fees Does an EB-5 Investor Need to Pay?
Form I-526 or I-526E Filing Fee
Form I-485 Visa Application Fee
Form I-829 Filing Fee
Immigration Lawyer Legal Fee
Business Plan Costs
Regional Center Administration Fee
Documentation Translation
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What Fees Does an EB-5 Investor Need to Pay?

A person sitting at a desk with some equity investment documents, a cup of coffee, a small clock, a tablet, and money for eb5 visa cost, administrative fees or uscis filing fees.

Investing in a New Commercial Enterprise

The main EB5 visa cost is the investment in a new commercial enterprise that will create 10 full-time jobs for American workers.

Ordinarily, the minimum investment amount is $1,050,000. EB-5 investors can invest a lower minimum of $800,000 for a project located in a targeted employment area (TEA), which is typically a rural or high-unemployment area. Certain infrastructure projects are also eligible for this lower investment amount.

Investors are likely to get this money back after the project they invested in achieves success.

Administrative and Professional Costs

Administrative and professional services costs make up the rest of what an EB-5 investor must pay.

Most of the funding for United States Citizenship and Immigration Services (USCIS) comes from filing fees. The agency reviews them every two years to ensure it is bringing in enough revenue to cover its costs and avoid excessive processing delays.

Some of these fees have increased recently. On January 31, 2024, USCIS announced in the Federal Register that it would raise immigrant petition filing fees, among some others.

Altogether, these additional administrative and professional expenses can add up to $100,000 or more. However, we cannot give precise figures because some of these fees (for example, the charges from your lawyer) will vary depending on your individual circumstances.

Let’s explore the EB5 visa cost breakdown in greater detail.

Form I-526 or I-526E Filing Fee

Close-up of a Form I-526, Immigrant Petition by Standalone Investor.

At the time of writing, an investor must pay USCIS an application fee of $11,160 to submit either the initial I-526, Immigrant Petition by Standalone Investor, or I-526E, Immigrant Petition by Regional Center Investor.

This is a 204% increase over the previous fee of $3,625 from before 2024.

Additional Fee for Investors Outside the United States

Note that an investor physically located outside the United States must also pay a supplementary fee of $345 for Form DS-260 consular processing.

This would bring the total up to $11,505.

EB-5 Integrity Fund Fee

According to the new edition of USCIS’s fee schedule, an investor also needs to pay a fee of $1,000 to the EB-5 Integrity Fund of the U.S. Treasury while filing their initial Form I-526E.

Other Fees

In addition, an investor may have to pay legal fees, money transfer fees, etc., as part of the I-526/I-526E application process.

Form I-485 Visa Application Fee

A Form I-485 Application to Register Permanent Residence or Adjust Status, with glasses, a pen, a U.S. Green Card, a wallet, and other items on a desk.

Most EB-5 investors file Form I-485, Application to Register Permanent Residence or Adjust Status, to adjust their immigration status concurrently with Form I-526E. Doing so saves time. Approval of this form confers conditional permanent resident status.

Each family member at or above the age of 14 can expect to pay $1,440. Those who are under 14 will pay $950.

These fees have also increased recently. Prior to 2024, they were $1,225 (including a separate biometrics services fee) and $750 respectively.

In addition, investors will pay other USCIS processing fees that should come out to about $490.

Attorney fees and money transfer fees may be applicable at this stage, too. Typically, an immigration attorney will file Form I-485 on your behalf.

Form I-829 Filing Fee

Toward the end of the EB-5 visa process, an investor will file Form I-829, Petition to Remove Conditions on Permanent Resident Status. This is the final step for a foreign investor and their qualified family members who want to become lawful permanent residents of the United States under the EB-5 program.

This form must be submitted within the 90-day period at the end of the two-year conditional permanent residency window.

The USCIS processing fee is $9,525, plus other legal fees, processing fees, and money transfer fees. This is a 148% increase over its previous cost of $3,835.

Your immigration attorney will probably file Form I-829 on your behalf, too.

Immigration Lawyer Legal Fee

The hand of an immigration attorney or judge holding a gavel, next to the American flag.

The EB-5 application process can be complicated and time-consuming even for experienced immigration attorneys. You can expect to pay at least $20,000 in such legal fees.

However, this amount can vary considerably, depending on the attorney you hire and the complexities of your individual circumstances.

Business Plan Costs

An EB-5 investor must have a business plan to prove to USCIS that the project meets EB-5 requirements. A successful business plan must be detailed, comprehensive, credible, and well-organized.

The cost of a business plan may range between $3,000 and $5,000. Regional center investors typically don’t need to worry about providing a business plan themselves, as it is handled by the regional center.

Regional Center Administration Fee

EB-5 participants can make a direct investment or invest via regional centers. Most investors choose the regional center route. This approach requires fewer day-to-day management responsibilities because regional centers handle much of the documentation, recruitment of additional investors, and EB-5 program compliance requirements.

These expenses make up the regional center administration fee. These admin fees vary between regional centers. The amount typically ranges from $30,000 to $70,000.

Documentation Translation

A magnifying glass with the word translate in the center, with different languages around it.

As part of the EB-5 application process, you may need to hire someone from a certified document translation company to translate certain documents (such as financial statements or birth certificates) into English. The translator must also include a signed statement indicating the translation was done accurately.

The fees to translate these documents are variable, depending on the translator you hire, the urgency of your request, and the volume of material you must have translated.

Save Time and Money With EB5AN

An EB-5 expert examining a stack of documents.

It’s worth it for foreign investors to make sure they understand the assorted fees that must be paid under the EB-5 program in advance. It takes a substantial investment of time and money to obtain lawful permanent resident status in the United States.

Trying to do this alone means you’ll end up paying far more than you need to in time and money for your immigrant visa.

That’s why it’s critical to work with EB-5 professionals who have a proven record of success.

EB5AN has helped more than 2,300 families from 60 countries relocate to the United States as lawful permanent residents. Our expert team has more than a decade of experience, and offers clients first-rate, low-risk EB-5 regional center projects with a 100% USCIS project approval rate to date.

Please book a free call with us today to learn more.

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Grenada’s CBI Program Expedites EB-5 Investment

502-Grenada’s-CBI-Program-Expedites-EB-5-Investment_preview

The bottleneck created by EB-5 retrogression has prompted prospective Chinese investors to seek another path to US investment and citizenship. As the sole possessor of both a citizenship-by-investment program and a bilateral investment treaty with the US, the tiny island nation of Grenada provides another option for these investors in the form of the E-2 investment visa.

How Does It Work?

Grenada’s citizenship-by-investment (CBI) program designates two ways for investors to gain citizenship: The first option allows individual investors to donate $150K, or investors with families to donate $200K, directly to the National Transformation Fund (NTF). For the second option, they can choose to invest a total of $400K in a government-approved project that’s beneficial to Grenada’s economy.

The simplicity of this program makes it possible for investors to become Grenadian citizens, eligible to apply for E-2 visas as well as travel to 121 countries visa-free, without ever setting foot in Grenada.

The NTF option is the more popular of the two. It’s also the option recommended by EB5AN, whose examination of the available development projects reveals that many are high risk at best and traps at worst. Commonly, properties are priced above market value, lack a history of profitability to assure investors of success, or are planned but never built. Investors are also required to maintain ownership of the property for at least three years after citizenship is granted.

Besides the advantage of a shorter waiting period to get into the United States, the E-2 doesn’t carry minimums for the amount that must be invested or the number of jobs that must be created. It does, however, require the investor to play an active role in business operations. It also doesn’t lead to permanent citizenship, but can be renewed or extended endlessly as long as its qualifications are met.

How Long Does It Take?

Investors can secure Grenadian citizenship within two to three months, and an E-2 visa within two to three months more. This total of six months is a far cry from the six to ten years a Chinese investor can expect to wait for an EB-5 visa during retrogression.

Can an E-2 be converted to an EB-5?

There are multiple ways to get from point E-2 to point EB-5, such as investing more money, investing in an EB-5 regional center project, or being sponsored by an employer or family member.

Punctilious planning makes all the difference. As soon as the investor has established E-2 status in the US, he or she should aim to fulfill the requirements of the EB-5 program, understanding that careful documentation is crucial.

Still, have questions? We’re here to help. Contact EB5AN today to learn more about Grenadian citizenship, EB-5 investing, and the E-2 route through Grenada.

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USCIS Fourth Quarter I-526 and I-829 Data Released for FY 2017

USCIS recently updated its online data for I-526 and I-829 Petitions to include Q3 of fiscal year 2017.

During Q3 (April through June), the Investor Program Office (IPO) significantly increased its processing of I-829 Petitions, outpacing the receipt of new petitions for the first time in years—and by a significant margin. This increase in processing volume is likely due to the recently announced formation of a specific division of adjudicators focused on I-829 Petitions.

I-526 Petitions, on the other hand, experienced reduced processing, resulting in the lowest number of adjudicated petitions this fiscal year. Fewer I-526 adjudications combined with a rise in I-526 filings means the total number of pending I-526 petitions yet again went up.

The increased number of I-526 Petitions filed during Q3 correlates with the historical pattern of increased filings just before the sunset date of the Regional Center Pilot Program. The legislative sunset date of the program has an obvious destabilizing impact on the market, creating uncertainty about whether the program will continue, and if so, what changes may be implemented by Congress. Drastic spikes in I-526 filings have occurred prior to each of the most recent five program extensions (Q4 FY2015, Q1 FY2016, Q4 FY2016, Q1 FY2017, and Q3 FY2017). These extreme increases to filings, often more than doubling the previous quarter’s filings, inundates IPO and serves only to expand an already massive backlog of pending EB-5 petitions.

The massive number of petitions filed in Q4 FY2015 and Q1 FY2016 in particular have caused adjudication times to grow—and as of the previous two IPO processing time reports, the office was still working through petitions with priority dates of November 22, 2015. Once IPO works through these two quarters, the office is expected to process the following two quarters much more quickly due to the drastically lower number of filings. They will, however, likely face another slowdown with two more back-to-back surges in I-526 filings during Q4 FY2016 and Q1 FY2017.

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USCIS Third Quarter I-526 and I-829 Data Released for FY 2017

USCIS recently published the EB-5 program statistics for the third quarter of fiscal year 2016 (April-June 2016). I-526 receipts moved towards the norm but were still lower at 1,513 receipts than the same time last year. Annualized Q3 leads to a 6,000 petition number which is in line with 2012 / 2013 figures.

As a reminder 1Q FY 2016 was at the end of calendar year 2015 when there was a rush to file before December, and in that month alone there were over 6,000 petitions filed. Since then there was a large drop-off in Q2 (Jan-March) and only 848 petitions were filed. Q3 rebounded with 1,513 petitions filed which is nearly double Q2, but still below historical norms.

We expect for there to be a significant pickup in Q4 as there is another rush to file petitions before 9/30 although we believe it will be a significantly smaller rush than at the same point in the prior year.

Trends of I-526 Receipts by Quarter
FY2013 – FY2016, Q3

I-526 Receipts Q3 2016

Trends of I-829 Receipts by Quarter
FY2013 – FY2016, Q3

I-829 Receipts Q3 2016 CROPPED

I-526 Petition Quarterly Statistics
FY2013 – FY2016, Q3

I-526 Petitions Third Quarter 2016

 

 

 

 

 

 

 

 

Trends of I-526 Pending by Quarter
FY2013 – FY2016, Q3

I-526 Trends by Quarter FY 2016

I-829 Petition Quarterly Statistics
FY2013 – FY2016, Q3

USCIS I-829 Trends FY 2016

Trends of I-829 Pending by Quarter
FY2013 – FY2016, Q2

USCIS EB-5 I-829 Trends by Quarter

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EB-5 Petition Processing Statistics USCIS: Q2 2016

On May 31st, 2016 USCIS released official statistics on current I-526 and I-829 processing through March, 2016 (Q2 of FY2016).

I-526 Petition TrendsUSCIS Filing Blog Post 6.2.201601 CROPPED

The most recent quarter (Q2 FY2016) showed a substantial decrease in new I-526 filings due to the extraordinarily high number of filings in the previous two quarters. I-526 filings spiked at the end of 2015 due to proposed regulatory changes that did not go into effect when Congress renewed the EB-5 program on September 30th, 2015. The data also help illustrate that increases in USCIS adjudicator personnel appear to be making an impact on I-526 processing as the number of processed I-526 Petitions increased ~50% from Q1 FY2016 to Q2 FY2016.

I-829 Petition TrendsUSCIS Filing Blog Post 6.2.201602 CROPPED

I-829 Petitions for Q2 FY2016 decreased over the past quarter to 421 approved I-829 petitions with only a small percentage of denials, approximately 5%. Receipts of new I-829 petitions appear to have stabilized at approximately 800 I-829 petitions per quarter and we do not expect this trend to change in the near future.

Pending I-526 PetitionsUSCIS Filing Blog Post 6.2.201603 CROPPED

The latest I-526 data shows that the number of currently pending I-526 Petitions stands at 20,235 – a decrease of almost 10% over the last quarter. Looking back over the past 7 most recent quarters, there is an 8.4% CAGR of new I-526 Petitions pending with USCIS, a trend that we expect to continue as the number of new I-526 Petitions picks up in the second half of 2016.

Pending I-829 PetitionsUSCIS Filing Blog Post 6.2.201604 CROPPED

The latest I-829 data shows that the number of currently pending I-829 Petitions stands at 4,712 – an increase of almost 10% over the last quarter. Looking back over the past 7 most recent quarters, there is a 14.6% CAGR of newly pending I-829 Petitions pending with USCIS, a trend that we expect to continue as the number of newly filed I-829 Petitions continues in the second half of 2016.

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USCIS Proposed Fee Changes for the Regional Center Program  

Department of Homeland Security (DHS) has recently published a notice on proposed changes to USCIS’ fee schedule for the EB-5 Regional Center Program. 

Key Highlights of the Proposed USCIS Fee Changes: 

  • Annual Form I-924A Filing: $3,035 fee – – Additional new fee for all existing Regional Centers
  • Form I-924 Application Filing: Increase from $6,230 to $17,795 – – For New Regional Center Designation or Amendment (including Amendment to Geographic Coverage, Project Exemplar Application)
  • Form I-526 Petition Application: Increase from $1,500 to $3,675 
  • Form I-829 Petition Application: No change (still $3,750) 

A Few Thoughts our Team has on Value Add Strategies before Any Proposed USCIS Fee Changes go into Effect: 

  1. If you are considering filing a Regional Center, file it now. The fee will be over 3x the current amount in the future ($6,230 to $17,795) 
  1. If you are considering expanding your existing Regional Center through an amendment, file the amendment now and do not delay 
  1. If you have an existing Regional Center, you should confirm that you are fully compliant with any potential regulations to keep your Regional Center in good standing. In the event of an avoidable Regional Center termination, applying for a new Regional Center in the future will be much more expensive. 

It isn’t clear these will be the final fees implemented by USCIS, but in the event that these fees are implemented there are several recommended actions Regional Center operators and EB-5 project sponsors can take in the near future before fees go into place. 

Starting from yesterday, there will be a minimum 60 days for the public to comment before any changes go into effect.

There is good news and bad news with these proposed changes. 

Good News: (i) there is time to prepare for these changes and take the appropriate actions to avoid increased fees where possible, and (ii) the ongoing fees associated with existing Regional Centers are much more reasonable than previously contemplated in prior legislation, and (iii) ideally this should enable USCIS to operate more efficiently and provide more consistent and reasonable processing times. 

Bad News: It will be more expensive to start, maintain, and file projects for Regional Centers going forward.

Official USCIS Fee Announcement 

The Department of Homeland Security (DHS) proposes to adjust certain immigration and naturalization benefit request fees charged by U.S. Citizenship and Immigration Services (USCIS). USCIS conducted a comprehensive fee review, after refining its cost accounting process, and determined that current fees do not recover the full costs of the services it provides. Adjustment to the fee schedule is necessary to fully recover costs for USCIS services and to maintain adequate service. DHS proposes to increase USCIS fees by a weighted average of 21 percent and add one new fee. In addition, DHS proposes to clarify that persons filing a benefit request may be required to appear for biometrics services or an interview and pay the biometrics services fee, and make a number of other changes. 

Click Here to Read the Entire USCIS Fee Proposal 

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Secrets to Bringing an EB-5 Project to Market

The EB5Investors conference in Las Vegas in January, 2016 had 800+ attendees and was the largest EB-5 gathering in US history.

One of our founding partners, Mike Schoenfeld, participated on the EB-5 Myth-busters panel. This was a panel geared at newer members of the industry and the content was focused on helping participants understand the realities of EB-5 project development and marketing.

The key questions addressed are:

  • What are the steps before Sponsors can market their project (including Regional Center access, Project Documentation, Marketing materials and a Marketing Plan)?
  • How long does it take for a Sponsor to have access to the EB-5 funding?
  • What makes a project appealing and what can a Sponsor do to have the best chance of having their EB-5 project funded?

Q&A. What are the steps before I can market my project? Answer includes common misconception and then the truth.
 
Mike spoke about EB-5 from the regional center and project Sponsor perspective regarding what actually occurs before a project is taken to market. As depicted above, the key discussion points centered around 1) the choice of regional center, 2) project documentation, 3) the marketing plan and materials, and 4) the marketing execution.

Choice of Regional Center

For the choice of regional center, the key issues to consider are the number of projects one plans to undertake, the timing requirements of these projects, and the cost constraints. If a Sponsor already owns a Regional Center, that is the logical choice for the project. If they do not own an approved regional center, the key considerations are as follows:

  • Timing – When starting a new regional center, it can take 10 or more months to get approved, and approval times are unpredictable. If a Sponsor plans to begin marketing without having to wait 10 months or more, then they should consider rental.
  • Cost –Rental costs are lower up front, but they end up being higher upon a successful raise after the per-investor cost is factored in.

We have seen many developers use a hybrid approach in which they submit an application for a new hypothetical regional center and at the same time affiliate with an existing regional center until their regional center is approved. This approach is both cost-effective and time-effective.

Project Documentation 

The second key step in getting a project to market is completing project documentation. These documents can be broken into two key components – The USCIS required Business Plan and Economic report and the Securities offering documents. A project Sponsor has a few choices on how to complete the project documentation. Following are two options:

Developer Coordinates Documentation

In this case, the developer will hire all key service providers and ensure everyone is working together and exchanging information. They will play quarterback. Following are the key vendors they will engage:

  • Business Plan Writer
  • Economist
  • Securities Attorney
  • Immigration Attorney
  • Paralegal or Law Firm (to set up corporate entities)

Documentation Consultant Serves as Single-point of Contact

In this case, the developer will provide their market study, appraisal, or other similar documentation that a senior lender would require, and the consultant manages the process.

Our recommendation is that in a majority of cases, the single point of contact consultant is the better option. Key benefits include consistent work product, structuring expertise, cost efficiency (only 1 company needs to make a profit vs. 5 separate companies). EB5AN is one of the industry leaders in documentation consulting, and you should reach out if you have any questions about the process.

Marketing Materials and Plan

Overall, having a well-defined plan and creating strong materials is critical for ensuring the project has the highest likelihood of success in the market.

Marketing Plan

The marketing plan is one of the key pieces of the EB-5 process. This plan needs to be carefully tailored to the specific project and to the expected investor marketing approach. Investors in different regions expect various key terms in the offering, and packaging the project correctly is vital in order to gain traction in the targeted markets. 

Marketing Materials

The materials for marketing a project can range from a simple brochure to an extensive video marketing presentation with 3D renderings, celebrity or government figure interviews, etc. The materials will vary depending on the project, its budget, and other specific needs.

Marketing Execution

After the project is Sponsored by a regional center, is fully documented, and the marketing materials are put in place, the project is ready to hit the market. It’s not a simple process, but with some guidance from experienced service providers, a developer can get their project into the market relatively quickly and cost effectively!

Q&A. How long from the start until EB-5 funding is available? It can take anywhere from six months to over a year.
 
One of the most common questions in the EB-5 space is, “How long until the EB-5 funding is available?” Although there isn’t a simple answer for this and the timeline will vary project to project, some reliable advice is that the process will take longer than expected. The previous portion of this post addressed documenting a project, and that is just the first step in getting a project to market.

After a project is documented and the marketing materials are created, the project must be introduced to the Sponsor’s chosen syndication network. This network may include Broker Dealers, Marketing Consultants, Migration Agents, Wholesalers, and potentially even personal contacts in foreign countries. Each marketing approach has significant securities law implications, and Sponsors should rely on securities counsel for advice on the correct marketing and syndication approach.

One of the potential syndication network paths is to work with migration agents, and this article will provide an example of this process.

  • Documentation and Marketing Material Creation (2–3 months) –  The length of time required will depend on how prepared the developer is with project material.
  • Market Launch – This part of the process typically involves the initial launch of the project into the market through either conferences and events in China or direct agent project introductions. A team can spend 2 or more months getting migration agents to study and diligence their Getting migration agents to engage in the process is the key here.
  • Agent Training – Depending on the agents, the project Sponsor may need to train their sales team regarding how to market the projects and on all the key aspects of the EB-5. This can take as little as 1 week or several weeks.
  • Seminar Launch / Investor Fundraising – After migration agents and partners have diligenced the project and their staff is trained, they can launch the investor fundraising effort. This stage of the process may not occur until 4 or more months from the start of the project.
  • Investor Subscription – Once investors are interested and plan to invest in the project, they will sign the subscription agreement. Although you have an interested investor, they haven’t sent their money yet. An investor may not wire their money into the project for anywhere from 1 month to 4 or more months. Do not be surprised by delays here, even from committed investors.
  • Escrow Release – The escrow terms will vary from project to Some projects have no escrow, and other projects hold investor money in escrow until individual I-526 approval is received. This topic is too involved and requires in-depth discussion, and so it will be discussed in a future blog post.
    • Depending on the escrow terms, the money could be available as soon as each individual investor wires their money into the project, but it could be as many as 14 or more months until all the funding is available.

While EB-5 offers many other benefits, typically, the EB-5 fundraising process is not a quick source of capital.

Q&A. Will my project be appealing to investors? The 2 key factors that determine success are Project Design and Marketing.
 
Two key questions when starting to conceptualize an EB-5 project are, “Will the project be appealing to investors?” and “Will my project find EB-5 funding?” An entire book could be written on this subject (and I think there may be one or two out there) – this blog post will keep it short.

(1) Will the project be appealing to investors

To start, two key project design characteristics make a project attractive to investors:

These two key project design characteristics are the structure and marketability of the project. Within these two characteristics are all the intrinsic features of the project. These elements can be broken into the following:

Structure

This is where the design of the project comes into play. Key factors for making a project attractive include (but aren’t limited to):

  1. EB-5 as a small portion of the capital structure
  2. Significant developer equity in the project
  3. A large number of jobs likely to be created
  4. A substantial job-creation cushion for EB-5 investors (desired)
  5. Project’s location in a TEA
  6. PPM Terms, which include the following:
    • Loan term
    • Return to investors
    • Investor rights
    • Investor security
    • Escrow structure

Marketability

In addition to the more rigid structuring questions, many variables can make the project more or less attractive to investors. Below are some examples:

  • Project location – Is the project in NYC? Is the project in a location the investor hasn’t heard of?
  • Developer track record
  • Recognizable brands attached to the project
  • Project summary and story

(2) Will my project find EB-5 funding?

To address the second key question, “If my project is structured well and is marketable, will it find EB-5 funding?” the Sponsor should think about the marketing execution. The key to marketing an EB-5 project is patience.

In addition to patience, finding strong marketing and syndication partners is a must. No one-size-fits-all answer is available here—and no magic bullet. Each project Sponsor needs to understand that they are their own best champion of the project, and they shouldn’t be 100% reliant on a third party for the marketing execution. It is helpful to provide international marketing partners with the support they need. This help could be in terms of financial support, marketing material support, or even on-the-ground roadshow support in which a key executive attends seminars or meetings to help close brokers or promote the project. Strong Sponsor commitment helps ensure the success of the project.

Historically, the EB-5 space has been relatively opaque, although it is shifting toward transparency. EB5AN has the goal of providing transparent solutions to all participants in the industry and welcomes any questions. Please contact us at 1-800-288-9138 or via email at info@EB5AN.com with any questions.

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Should you file an I-924 “Exemplar” Petition before September 30th?

Since the introduction on June 3, 2015 of the bipartisan American Job Creation and Investment Promotion Reform Act by Senators Patrick Leahy (D-Vt.) and Chuck Grassley (R-Iowa) the Grassley / Leahy Bill, there is increased discussion on whether potential projects should file an I-924 “exemplar” petition prior to September 30th, 2015, the date on which the Regional Center program is set to expire, and the impetus for the bill. While most EB-5 practitioners understand that changes to the program are imminent, there remains debate on what actions are most prudent to pursue in the short term to address the upcoming changes.

While a detailed description of the changes are beyond the scope of this article, there are several key provisions in the currently proposed bill that should impact the decision on filing an I-924 Exemplar prior to the approval of any legislation:

(1) Proposed Increase in the minimum per investor amounts from $500K to $800K for TEAs and $1M to $1.2M in non-TEAs;

(2) Proposed changes to the definition of TEA, including prohibiting the aggregation of census tracts by limited TEA status to only a single-census tract;

(3) Proposed changes to what sources of capital may count towards job creation numbers;

(4) Proposed changes to the number of direct versus indirect jobs may be counted towards each person’s 10 job requirement;

(5) Proposed requirement that future projects must have an approved I-924 Exemplar before any investor’s I-526 Petition can be filed with respect to that project.

When deciding whether to file an I-924 Exemplar the project should go through a list and evaluate several criteria.

(1) Is the project at a stage where sufficient facts exist to support an I-924 Exemplar ?

(2) Does the project work today from a job creation and TEA standpoint?

(3) Can the team fully assemble the required documentation prior to September 30th, or whenever the bill is passed? It is important to note that the trigger for the new changes will be the effective date of the proposed bill, which could be prior to the end of September or after September if there is an extension.

(4) Do your offering documents include sufficient disclosure on the proposed legislation and its potential effects and risk factors?

The above are some of the key questions a sponsor should consider prior to filing for an I-924 Exemplar. If the above can be met the value of an I-924 Exemplar filing is very clear.

The key benefits to filing an I-924 Exemplar now rather than waiting for any changes to the legislation include:

(1) Grandfathering-in the existing definition of TEA

(2) Grandfathering-in the minimum investment amount of $500,000 in a TEA

(3) Grandfathering-in the existing way that jobs are calculated and how sources of capital are used for job creation

(4) The ability to bring the project to market and fundraise prior to I-924 Exemplar approval

These key benefits above make it extremely clear that if the project is in the position where an I-924 Exemplar could be filed before September 30th, then it is highly advantageous to do so. The best path forward is to file the I-924 Exemplar petition with an already approved Regional Center to ensure that the project sponsor can bring the project to market prior to USCIS I-924 Exemplar approval after the new regulations come into effect.

By “locking in” a project under the existing requirements and definitions, the project will be positioned for fund raising success, particularly as existing projects become scarce. We predict that there will be high demand for any high quality project that has grandfathered in the lower investment amount and the easier to use TEA definition.

Our recommendation is that any projects serious about using EB-5 funding should consider filing an I-924 Exemplar prior to the approval of any pending legislation, currently due to be passed in some form or another by September 30th. However, the decision for a project sponsor to file for I-924 Exemplar will be heavily project specific.

Please contact us at www.EB5AffiliateNetwork.com or 1-800-288-9138 to discuss further.

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Why are Hotel Projects so Popular for EB5 Regional Centers?

Why are Hotel Construction Projects so Popular for EB5 Regional Centers?

New hotel construction is one of the most popular types of EB5 regional center investment today. The reasons behind this relate to the two primary goals for EB5 investors:

(1) Obtaining a Visa (with the highest chance of it becoming permanent) and

(2) Return of Investment Principal

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Compared with other types of new real estate development projects, Hotel projects tend to create a high number of jobs per dollars invested given the construction spend and ongoing operations drivers of job creation. An increased number of jobs for the entire project translates into more jobs available on a per investor basis, and thus greater likelihood that the investor will receive a permanent Visa.

New hotels create substantial direct jobs during the operational phase and during the construction phase if construction lasts more than 24 months, and the USCIS Regional Center program allows projects to also count “indirect and induced” jobs determined through economic models such as RIMS II and Implan, approved by USCIS economists. EB-5 regional center investment projects can therefore take advantage of indirect and induced jobs created during both the construction phase (if longer than 24 months) and during the operational phase once construction is completed the hotel is operational.

In most deals today, EB-5 investor capital represents a small portion of the total capital required, but all project capital can be counted for the purposes of EB-5 investor job creation.

To illustrate, let’s say that a new hotel development project has a total of $100 million hard and soft construction budget which will create 900 direct and indirect jobs using USCIS approved economic models. Of this amount, 30% or $30M is from 60 EB-5 investors each contributing $500,000. This means that all 900 jobs can be divided on a pro-rata basis so that each of the 60 investors is allocated 15 jobs (900 jobs / 60 investors). This represents a “job cushion” of approximately 50 percent over the USCIS required 10 jobs per investor (15 vs 10 jobs). Investors who choose to invest in projects with a “job cushion” have a greater likelihood of their temporarily approved Visa’s becoming permanent at the I-829 stage years later.

Temporary Visa’s are made permanent by the USCIS after an investor has demonstrated that a minimum of 10 jobs over 2 years has actually been created by his/her investment in the EB-5 project. If the total construction spend decreased during the course of the project or the amount of operational revenue expected from the project was lower than expected, the number of jobs created by the project would be lower than projected.

Investors who select projects where there is no “job cushion” may run into issues at I-829 approval if the project they invested in did not create the required number of 10 jobs over 2 years after the decreases in construction spend and operational revenue were taken into account.

Therefore, investors considering an investment in an EB-5 project should always take into account not only the projected total job creation of the project, but also the “job cushion” to maximize the likelihood of receiving a permanent Visa as a result of their investment.

From a revenue perspective, hotel projects are also perceived to be relatively safe in the marketplace for return of capital compared with other EB-5 project types. Most foreign investors believe that they understand the revenue model of a hotel, and are confident that they can recognize a quality location that they recognize and a well-respected hotel brand/operator associated with a given project.

Due to our extensive experience in the hotel space, EB5AN has developed proprietary legal and economic structures for EB5 hotel projects under regional centers looking to raise EB5 investment capital. Our team has worked with major hotel development companies and international hotel brands on projects across the United States.