The U.S. EB-5 Regional Center program: A source of capital

As this short article highlights, the U.S. EB-5 Regional Center program is a potential source of new capital to finance job creating projects in New York State. Background The U.S. Congress created the EB-5 Regional Center program to encourage the investment of foreign capital into job creating projects in the U.S., in order to foster economic development and to create jobs in the U.S. Billions of dollars of new capital have flowed into the U.S. and tens of thousands of jobs have already been created (or saved) as a result of the EB-5 program, and the EB-5 Regional Center program is growing very rapidly. Source of EB-5 capital EB-5 capital is private capital raised from foreign investors - it is not federal or state government funding. In return for making at least a $500,000 investment into a qualifying, job-creating EB-5 Regional Center project, and satisfying U.S. government immigration requirements, an EB-5 investor, together with the investor's spouse and children, may be eligible for a U.S. green card. Job Creation in the Highest Unemployment and Rural Areas of the U.S. A fundamental requirement of the EB-5 Regional Center program is that each project invested into must create a minimum of 10 new jobs in the US for each foreign investor. Although an investment of EB-5 capital can occur anywhere in the U.S., nearly all investments of EB-5 capital are made into areas of the highest unemployment (having at least 150% of the national unemployment rate) or rural areas (defined as an area outside of a Metropolitan Statistical Area and outside of a town or city of 20,000 persons). The EB-5 program's greatest benefits are felt in the highest unemployment and rural areas of the U.S. - those parts of our country which most need those new jobs. Types of projects into which EB-5 capital can be invested EB-5 capital has been utilized in most of the economic sectors of the U.S. economy, for many purposes and in varying amounts. Examples include: project development, construction, purchase of equipment, working capital and similar investments into a job creating project. Practically the amount of EB-5 capital invested or lent to a project can range from a few million dollars to hundreds of millions of dollars, and generally EB-5 capital is invested in conjunction with equity and other traditional financing sources. Benefits of the EB-5 Regional Center program to the U.S. and to New York The EB-5 Program's greatest benefit to the U.S. is the new jobs which must be created (or jobs saved) with the investment of EB-5 capital. In addition, the U.S. gains economic growth from the investment of new capital. Not to be overlooked is also added tax revenue from those new jobs and the economic growth, and also from the foreign investors who pay U.S. income tax on their world-wide income when they receive a U.S. green card. With a growing number and size of EB-5 Projects in New York State, New Yorkers will increasingly feel the benefits of the US EB-5 Regional Center program on New York. Bill Gresser is president of the Upstate New York Regional Center, LLC.