Other Options Are Available For Investing On Your Own

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If You Don’t Want To Invest In The Regional Center, What Are Your Options For Investing On Your Own?

If you do not want to invest in a regional center, the other option mentioned is direct investment, or investing on your own. The investment from China is over 85% of all regional center investments. The time period of about 2 years to get a 2-year green card applies to everyone except the 85% who are from China. Since there has been a continuance high usage for the last number of years, from Chinese investors, a backlog has been created for China nationals only. If you’re from Taiwan, no problem; if you’re from Hungary there is no problem. However, if you’re from mainland China, to get even the conditional green card, it currently takes 6 or 7 years.

Investors from China realize that they have a longer wait but if they still proceed. Essentially, they can basically only invest in regional center investments and not on their own because they would never want to trust someone else to run their business for seven years before they can come to the U.S. They could only oversee from abroad or whenever they were here as a visitor.

That’s the additional point relating to investing on your own. Direct investment is very rare because unless you are really willing to run your own business, you will most likely want to go with the regional center investment.

How Does The EB-5 Program Define A New Enterprise?

There are two ways to do a project: One is to start from scratch. Taking the example of a restaurant for both a new enterprise and expanding an existing business, if you’re investing in this business you’re, you have to start with location and ensure it is located in a TEA so you would only have to invest the half a million versus one million.

If it is in an affluent high-end area that isn’t high on employment, then it’s a million dollars or more. You then have to buy equipment, furniture, kitchens and everything that needs to go in a restaurant kitchen. You don’t have to invest the whole amount right at once, but you do have to put in the whole amount required for the investment, so in this case $900,000 into the business account. When you’re starting up a new business, that’s the way it works for both direct investment and regional center.

A regional center would be a bigger project. Let’s say you are starting up a hotel, you’re doing the plans, finding the location, buying the property and then you’re building the hotel. If you’re building, it takes a year or two depending on the size of the hotel. If you have your direct investment and you’re just building out a restaurant space that takes a lot less time. Basically, it’s starting a new enterprise.

If you’re buying an existing restaurant, you’re not starting a new business. But let’s say you want to add on or take over space next door. In that case, the 10 jobs that you have to create are new jobs, based on the amount of money that you’re spending on the expansion. The buying of the existing restaurant is not the expansion money; it is what you’re spending to expand the restaurant. Let’s say that you will go from a restaurant that can hold 50 people to one that will hold 200 people. You have to redo and expand the kitchen, get new furniture, do new marketing and now you have to create 10 additional jobs over and above the ones that you have for your existing restaurant. The 10 employees or 10 plus employee requirement relates to the expanding part.

In regional center investment, just to differentiate between the employment and how it’s determined in direct investments, it is actual, W2 employees who are employed by the business. The benefit of doing the regional center is that you can use the concept of an indirect employment as well as direct employment. Taking a hotel for example, it may be a $50 million project, which means 100 investors, assuming it’s in a TEA, each one investing a half a million dollars.

You need at least 10 employees per investor, which means you need 1,000 or more employees. All regional centers have a cushion. They usually project the project will have at least 15-20% more employees than are necessary. The way that they do this is through an economist report that uses various economic methodologies that have to do with using multiples in order to show indirect employment. For example, indirect employment might show that over the year, you have had 10,000 people staying at the hotel, each going to the restaurants, going out in the local economy, spending money and thus creating more jobs. These are the indirect jobs and they’re justified through the economist report as well. The report goes to immigration which justifies the multiple investors having access to the indirect jobs.

If you need information regarding Other Options Available For Investing On Your Own, call the Immigration Attorneys at Mark A. Ivener, A Law Corporation for a FREE Initial Consultation at (310) 477-3000 and get the information and legal answers you’re seeking.

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