You may have heard about the EB-5 program, which allows an overseas investor to gain an American visa when investing $500,000 in a US project. If you are considering making a pitch to a foreign investor to grow your business, here is everything you need to know about the EB-5 process.
The Program
The EB-5 Immigrant Investor Program was introduced by the United States in the 1990s. The act was passed to encourage wealthy foreign investors with an opportunity to secure an express green card, whilst encouraging the success of American businesses. To be granted an express visa, the investor must provide a significant investment in a US project or enterprise that secures at least 10 nationwide jobs.
The Strategy
A thorough EB-5 investor will be looking for an intelligent investment project for their finances, which is why a business owner must prove they have the best business model for the overseas funding. A company should therefore develop a successful marketing strategy that outlines a project, whilst providing detailed information on the growth strategy and how they plan to use their money. Be honest with a potential investor, informing them what will happen to their finances should the project fail.
One way to attract an investor to join a company is by applying for exemplar status from the US Citizenship and Immigration Services, which will pre-approve a project to speed up an investor’s green card status.
The Risk
It is important to know that every investment comes with risk, and an EB-5 investment will be no different. The risk will be determined by the investment project, the location and the capital structure. It is therefore an EB-5 investor’s responsibility to research the investment project thoroughly, and a company’s responsibility to learn more about an investor.
The Criteria
If you want to successfully win an investment bid, you must ensure you provide a reasonably secure project, whilst projecting a reasonable return on an investment that is in-line with the market conditions. The developers of a project should also be devoted to the project for the best chance of success.
Be aware that an investor may hope to receive a return of their principal by the end of the investment process, or they should at least be offered an EB-5 compliant exit strategy. You must also ensure you do not compromise an investor’s US residency benefits.
The Welcome
If you want to secure an EB-5 investment, you should invite a potential investor to your project’s site or the regional center. It is essential you are transparent about your business, providing detailed documentation on the project. If you refuse to meet with an investor, they may become suspicious of a company and reject a proposal.
The EB-5 Process
The EB-5 process can be a little complicated, because there are various factors that must be considered. It is therefore essential you speak to an experienced EB-5 attorney, such as Hirson Immigration, who can guide you every step of the way, whilst helping you create a winning EB-5 investment strategy.
