EB5 Project for Real EstateAn EB5 Project in Real Estate is the result of capital from foreign investors seeking to qualify for the EB-5 Immigrant Investor Visa Program. The EB-5 Immigrant Investor Visa Program grants permanent residence (green card) to foreign investors who can invest a minimum capital in a U.S. business. The EB5 Project resulting from the investment should lead to at least 10 full-time jobs for U.S. workers. 

An EB5 Project for Real Estate is a top choice for foreign investors because of its high potential for job creation and protection. Large-scale real estate developers are able to generate enough jobs through construction efforts alone. Commercial EB5 Real Estate Projects such as hotels, malls, and offices have a high market demand and potential for return on investment. Investing in EB-5 Real Estate Projects sustains the created jobs showing a low immigration risk to ensure the investor’s gaining of lawful permanent residence. 

What is the EB5 Project to Real Estate?

An EB5 Project in Real Estate is the product of a foreign investor’s investment in real estate or property development projects in the United States. An EB5 Project in Real Estate can be residential properties (condominiums, multi-family residences, cooperatives), commercial properties (hotels, hospitals, restaurants), or industrial properties involved in manufacturing, production, distribution, and storage.

An EB-5 Project is part of the requirement of the EB-5 Immigrant Investor Visa Program. The EB-5 Immigrant Investor Visa Program grants permanent residence (Green Card) to qualified foreign investors. The foreign investor has to invest a minimum capital in a US EB-5 Project that generates at least 10 full-time jobs for U.S. workers to qualify for the EB5 Visa Program. 

How Does the EB5 Project Work with Real Estate?

EB5 Real Estate Projects grew in popularity after the 2008 financial crisis wherein most real estate projects failed to obtain capital from traditional financing. The U.S. Citizenship and Immigration Services (USCIS) then announced in 2009 that construction jobs that indirectly resulted from real estate projects can count toward the job creation requirement of the EB-5 Program. The announcement brought in more EB-5 investments in real estate development, especially for commercial and multifamily projects in locations such as Los Angeles, New York, Washington DC, San Francisco, and Seattle.

An EB 5 Real Estate Project can be a direct investment or a regional center project. Direct EB-5 investment is an EB5 project that generates jobs directly from its operations. The foreign investor is directly involved in the management and operations of the direct EB-5 investment. A regional center is a private or public unit approved by the U.S. Citizenship and Immigration Services (USCIS) to promote U.S. economic growth. Most EB-5 Projects for Real Estate are sponsored by regional centers that pool together the capital of multiple investors. Regional centers create indirect jobs such as from supplier industries, and induced jobs such as those resulting from increased employment in the local community in addition to direct jobs. 

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What are the Advantages of Investing in an EB5 Project to Real Estate?

These are the top advantages of investing in an EB5 Project to Real Estate.

  • Tangible investment. Most EB-5 investors opt for real estate projects because they are tangible investments that investors can physically inspect and serve as real collateral. 
  • Consistent demand. Commercial real estate projects particularly have a high market demand and a potential for a return on investment. 
  • Sufficient job creation. Large real estate projects lead to numerous, direct, indirect, and induced jobs to satisfy the eligibility criteria of the EB-5 Visa. 

What are the Disadvantages of Investing in an EB5 Project to Real Estate?

These are the disadvantages that foreign investors need to be aware of in an EB-5 Project to Real Estate.

  • Fraud risk. The filing of securities fraud charges by the Securities and Exchange Commission (SEC) against the Chicago Convention Center (CCC) project resulted in investors, particularly from China, becoming more cautious in real estate EB 5 Projects. The issue of misrepresentation of Chicago Convention Center (CCC) developers led the Securities and Exchange Commission (SEC) to make efforts to prevent intentional false statements, material misrepresentation, and omission of information to EB 5 investors. 
  • Local government changes. Investing in locations where affordable housing is favored can pose problems in gaining construction permits and government financing for hotels and luxury real estate projects. 
  • Immigration risk. Real estate projects that have a high risk of delays, shortfalls, or overruns can negatively affect the completion of immigration of EB5 investors. The minimum of 10 jobs created must be sustained until the foreign investor applies and gains his/her 10-year unconditional permanent residence status.

In the next section, we will discuss the important points for consideration for EB-5 investors evaluating the worth of investing in EB-5 Real Estate Project. 

What are the Things to Consider in Investing EB5 Project for Real Estate?

Here are the 8 things to consider for EB5 investors looking to invest in an EB5 Project for Real Estate.

1. Reliable Brands

EB-5 investors should partner with reliable and established real estate developers with a proven and transparent history of building successful projects. Commercial real estate projects from brands such as Hilton, Hyatt, and Marriot have produced a chain of lucrative hotel and residential properties from EB5 funding. 

2. Job Protection

Job protection (cushion) in EB 5 Projects refers to the number of jobs that exceed the minimum requirement of the EB5 Visa Program. Real estate EB-5 Projects potentially have high job protection because of the numerous jobs created especially if done via regional centers. 

3. Job Creation in Operations

Form I-526, Immigrant Petition by Standalone Investor must include a business plan proving that at least 10 jobs will result from the EB-5 Real Estate Project. Regional centers that have at least one approved I-526 petition reflect that the EB-5 Project has met the job creation requirements of the program.

4. Direct Job Creation

The USCIS considers construction jobs from an EB-5 Project for Real Estate lasting longer than 2 years as direct jobs. The jobs created must be maintained until the foreign investor reaches Form I-829, Petition by Investor to Remove Conditions on Permanent Residence stage. An approved Form I-829 grants the foreign investor lawful permanent residence status for 10 years.

5. Full Capital Stack Contributes to Job Creation

All funds combined from total capital from EB-5 investors are all counted toward the job creation requirement. Investors who are affiliated with large real estate development projects are likely to benefit from high job creation and secure job protection.

6. Improved Prospects for Permanent Residency

EB 5 investors should look for real estate projects that can create and sustain the 10 jobs created from the I-526 stage through the I-829 stage. Your investment in the EB5 Project should remain “at risk” until the date of your filing of Form I-829.

7. Security of Investment

EB-5 Projects for Real Estate are typically structured with EB-5 investments coming in as interest-only, fixed-term debt. The EB5 investment would be loaned to the EB5 Real Estate Project usually for a 5-year period. The EB 5 investment would then be repaid after the EB 5 investor has completed his/her I-829 application and the term of the loan completed. 

8. Structure of the Project

EB5 Real Estate Projects that have little to no immigration risk are those that create secure job protection through construction expenses alone. Ongoing real estate projects have the potential to generate enough jobs to meet the EB5 Program requirements even before receiving any capital. 

Read more on What is an EB-5 Visa Project?

How to Invest in EB5 Project for Real Estate?

These are the 6 steps for investing in an EB-5 project for Real Estate.

  1. Perform an initial search. Work with your immigration attorney to assess if the EB5 Visa Program is the right immigration path for you. Your immigration and investment goals must be aligned when applying for the EB-5 Visa.
  2. Choose an EB5 Real Estate Project. Choose between a direct or a regional center investment. Fund a real estate project that is backed up by reliable developers and brands. 
  3. Perform due diligence. Conducting due diligence ensures that the real estate EB 5 Project is legitimate and has a low immigration risk. 
  4. Invest the minimum capital. The minimum investment for an EB5 Project in a Targeted Employment Area (TEA) is $800,000. A Targeted Employment Area (TEA) is a region with high unemployment or rural areas. The minimum investment for a non-TEA is $1,050,000.
  5. Complete the required documents. Documents needed for an EB5 petition are personal, project, and financial documents. We have a complete list of documentation requirements for the EB 5 Visa in the next section.
  6. Submit Form I-526. Your I-526 petition includes your business plan that demonstrates job creation and capital investment in an EB5 Real Estate Project. USCIS issues a receipt notice with your priority date for your EB-5 petition.

What are the Requirements for an EB5 Project to Real Estate?

These are the basic documents needed for an EB-5 Visa project for the restaurant industry.

Financial documents

  • Evidence of legal source of funds. 
  • Evidence that your investment capital was obtained legally.
  • Evidence of business ownership.
  • Financial statements for your business/es.
  • Copy of all business licenses.
  • Bank statements in the last 5 years.
  • Tax returns in the last 5 years.

Project documents

  • Evidence that the investment will be made in a qualified EB-5 Real Estate Project.
  • Proof that the project is in a TEA if the minimum investment is $800,000.
  • Evidence that the investment will create a new U.S. business.
  • Evidence that you have invested in a regional center aligned with the approved regional center business plan. The letter from USCIS designating the regional center should be attached to your I-526.
  • Proof that the EB-5 project will lead to at least 10 full-time jobs for Americans.

Personal documents

  • Copy of your valid passport.
  • Copy of your old passports, if any.
  • Copy of your dependent’s (spouse and children) valid passports.
  • Documents with biographical information including birth certificate, marriage certificate from you and your dependents.
  • Local or national identification documents.
  • Household registration.
  • Copy of any prior immigration applications.
  • Arrival/Departure Notice (I-94).
  • Certified copies of any judgment, pending governmental civil or criminal actions, or private civil actions against you from any court in or outside of the US in the last 15 years.

What are the Regional Centers that Offer EB5 Projects to Real Estate?

There are 632 regional centers approved by USCIS as of October 25, 2021. The complete list of all EB-5 Regional Centers is found on the USCIS official website. 

What Other Related EB5 Projects are Available?

Other top EB-5 Projects include hotel construction, biotechnology, and restaurant industries. An EB5 Hotel Construction Project provides a reliable source of repayment for EB5 investors in 5-7 years. An EB5 Biotechnology Project is one of the main EB-5 industries of the state of North Carolina. An EB5 Restaurant Industry Project generates an average of 20 jobs per investor ensuring the investment’s ability to meet the job creation requirements.

Is an EB5 Investment Safe for Real Estate Industries?

USCIS requires an EB5 investment to be “at risk” and remain “at risk” until the investor’s I-829 application. An EB5 investment in real estate generally involves the potential for both losses and gains. The main benefit of an EB5 investment is not the return on investment but the ability to gain a US Green Card for EB 5 investors and their dependents.

Are EB-5 Regional Centers Available in the Real Estate?

Yes, most EB-5 Projects for Real Estate are sponsored by regional centers. Check the approved 632 regional centers on the USCIS website.

Is there a Chance of Profit or Return on EB5 Investments?

Yes, EB5 Projects in Real Estate continue to attract foreign investors because of their potential for returns and their security against the inflation of the US dollar. The high potential for job creation and protection additionally works for EB5 investors who are primarily after a US Green Card than a huge return on investment.