2. American Resettlement and the EB-5 Program
Speaker Names / Companies:
Genevieve Ronan – Extell
Phong Le – Hirson
Sissi Zhou – Baker Tilly
Lily Zhang – Bether Capital
Moderated By: Daniel B. Lundy, Esq.Klasko Immigration Law Partners, LLP

3. EB-5 Intro
The EB-5 program was created in 1990 by Congress for the purpose of promoting job creation through foreign investment in the U.S.
The Regional Center Pilot Program was enacted in 1993 to allow investors to qualify under the program through pooled investments into a “Regional Center”
The Regional Center Program has been reauthorized in three year increments since inception, and is set to expire again on March 23, 2018.

4. EB-5 Basics
Process:
An investor files an I-526 petition to qualify him or her for an EB-5 visa.
The investor obtains the visa and enters the U.S. or adjusts status if in the U.S. Upon entry or adjustment of status, he or she becomes a conditional permanent resident.
21 months after becoming a conditional permanent resident, the investor has to file an I-829 petition to show that he or she made the investment, maintained the investment, and the jobs were created.

5. EB-5 Basics Three Primary Requirements:
A foreign investor can qualify for an EB-5 visa if he or she:
Makes an investment
Into a New Commercial Enterprise
And the Investment results in the creation of at least ten full-time, permanent jobs for U.S. workers.

6. EB-5 Basics
“Invest” means to make an Equity Investment. The investor cannot loan money to the NCE.
The Investment must be at risk throughout the sustainment period.
100% of the investment must be available for job creating activity.

7. EB-5 Basics Required Minimum Investment
The required minimum investment amount is $1 million, unless the investment is in a Targeted Employment Area (TEA), in which case it is $500,000
A TEA is:
A Rural Area- an area outside of any Metropolitan Statistical Area or any town or city with a population of 20,000 or more
An area with 150% of the national unemployment rate

8. Regional Centers
An investor can invest in a direct investment (i.e. form a business), or can invest through a Regional Center.
A Regional Center is an entity designated by USCIS to sponsor investment opportunities in a specified geographic territory (which is non-exclusive).

9. Regional Centers Benefits of a Regional Center Job Creation:
An investor in a Regional Center Project can count indirect jobs toward the 10 jobs-per-investor requirement. Jobs are calculated with an economic model. (Many more jobs per investor).
An investor in a direct project can only count direct employees (i.e. W-2 employees of the business in which he or she invested). Employees are physically counted.
Control:
An investor in a direct project is an equity partner.
An investor in a Regional Center project invests in a remote entity, and that entity loans or invests money in the project.

10. Job Creation/Regional Centers
A project’s job creation is determined using an economic impact analysis, generally through an input/output model, which counts direct, indirect, and induced jobs.
Typical inputs:
Construction Expenditures (hard, soft, FF&E);
Operations revenue (e.g. hotel or restaurant operations).

11. Job Creation/Regional Centers
Example:
Construction Project X has $100 million of hard costs. The regional multiplier for hard costs is 17 jobs per million x 17= 1,700 jobs.
1,700/10 = 170 (maximum number of investors)
170 x $500,000 = $85 million (theoretical maximum amount of EB-5 capital that could be raised based on job creation)

12. Job Creation/Regional Centers
Two year rule for construction:
If construction will last for at least two years, we can count “direct” construction jobs. If not, we can only count the indirect and induced jobs.
The multiplier for construction jobs is usually reduced by about 50% if direct jobs are not included.

13. Timing Issues
Timing is the number one difficulty with the Program right now.
Approval of an investor I-526 petition months
EB-5 visa time- 3 to 12 months
I-829 processing- 30 months.
Visa Backlog for China years
A short backlog is expected for Vietnam in the near future

14. Timing Issues Bridge financing:
EB-5 funds can be used to replace temporary financing to the extent that it was contemplated form the beginning that the funds would be replaced.
Cannot use EB-5 funds to refinance a deal, or there will not be a sufficient nexus to the job creation.

15. Investor Issues Source and Path of Funds
The investor must demonstrate the lawful source and path of funds
Can be a gift, but you have to show how the giftor earned the money
Loans are ok if secured by the assets of the investor
Real estate sales, income accumulation
Company profits
Shareholder loans are tricky

16. Investor Issues Role of the Investor’s Immigration Attorney
Determine admissibility
Review project documents for immigration risks
Advise on and help the client to document the source and path of funds
Prepare and file the I-526, DS260/I-485 and I-829 petition
Refer client to appropriate professionals for business, tax, and investment advice
Interact with Project or Regional Center to get documents, provide updates

17. Role of the Regional Center
Regional Center Models
Regional Center/Developer
Regional Center as Manager of the NCE
Regional Center only hosting project

18. Tax Issues
Pre investment tax planning
U.S. Tax Issues

19. Resettlement Services
Real Estate
Schools
Travel

20. Questions ?

21. DISCLAIMER
This presentation outline and the presentation itself are for general education purposes only and are not intended to provide specific guidance or legal advice about what to do or not to do in any particular case. You should not rely on this general information to make decisions about specific immigration matters. If you are not yourself a lawyer, you should seek the assistance of an immigration lawyer to help you resolve these issues. Thank you.
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