EB5 Investors Magazine Volume 5, Issue 2 - Page 41

THE BASICS OF EB-5 have good supporting documents, including revenue and expense pro forma and market study, having a strong EB-5 team in your corner—including an experienced business plan writer and economist—is an invaluable necessity. The main role of the EB-5 business plan writer is to take your business model and present in a way that is fully compliant with USCIS requirements. This in turn will allow for a successful capital contribution and immigration process by the investor. Matter of Ho is the precedent case study that your EB-5 business plan will be evaluated against and it is the writer’s job to make sure your business plan is presented in a way that is compliant with that standard. If you are unsure of your business model or the market conditions, the writer can also help to correctly shape your plan, but if the plan is too speculative, you may want to reconsider a more institutional regional center project offering, especially if immigration is the primary motivation. While a business plan writer is a necessity for both a direct or regional center EB-5 compliant business plan, you should also consider the benefit of having an economic analysis/job creation study performed for your project. If you use a regional center model, you are allowed to use the jobs associated with direct, indirect and induced business activities of the project. These jobs typically come from two categories. The first one is construction: you can count certain costs associated with construction activities to create jobs. To go back to the example above, it is conceivable that a regional center project that contemplates several Korean BBQ’s would create enough jobs via construction expenditures alone (including FF&E, tenant improvements, etc.) to support an EB-5 investor. There is typically much less risk involved with counting jobs from construction expenditures than with providing evidence that your project has the ten qualifying full-time employees/job positions at the time the investor files for their permanent residence. The other activity from which to demonstrate creation of EB-5-eligible jobs, within the context of a regional center project, is operations. Similar to a direct EB-5 project, you can use direct hires as an input to the model. In the regional center example, not only would you gain credit for the 10 full-time employees, but also for the indirect and induced jobs associated with the project. Jobs from operations can be evidenced by direct hires, but with the help of an economist, you could instead use revenues to calculate the direct, indirect, and induced jobs through economic modeling. An important consideration to this option is that you must be confident that you will hit your EB5INVESTORS.COM 40