With real estate financing markets remaining tight, and the ongoing U.S. debt crisis leading to continuing uncertain credit availability, developers are scrambling for alternative sources of funding. One potential source of funding could be through an EB-5 foreign visa investment program.
The EB-5 immigrant investor program allows foreign nationals to secure a visa for themselves and their immediate family. The basic requirements are they they:
- Invest at least $1 million (or $500,000 if the project is in a rural area or area with a high unemployment rate.
- Create at least 10 full time jobs.
Because foreign nationals understand that they can secure visas at the lower threshold, very few EB-5 transactions occur outside of high unemployment areas.
The investment does not need to come from one individual; several investors can pool their resources for a larger project. There is no limit to the amount they can invest, and there are no restrictions on the country of origin. Although the EB-5 program is not new, EB-5 applications have increased over the last few years and provided greatly needed investment in real estate projects.
In one example, we recently represented the developer of a high profile mixed use hotel-condo-retail project in California. The developer was able to secure a large foreign investment in their nightclub and restaurant venues from a group of Chinese investors. The investment created hundreds of new jobs for U.S. citizens, helped to revitalize the local community, and provided the developer with non-traditional funds for the project.