Guest Column: Adding EB-5 Immigrant Investor Funds to Your Capital Stack via Commercial Property Executive

By Kate Kalmykov

Since 2008, a little-known government program, the EB-5, has grown exponentially in popularity. The EB-5 program has become particularly popular with those in the commercial real estate industry as an alternative, low-interest source of capital.

The Immigration Act of 1990 for the first time permitted a foreign national to qualify for permanent residency (green card status) in the United States, based upon investment under the employment-centered fifth preference category (EB-5). The foreign national who wishes to use the EB-5 category has two basic choices: Find an existing EB-5 investment company or invest directly in his or her own new enterprise.

With the “individual EB-5” option, the investor will not only be required to commit the EB-5 investment funds to the enterprise but also be expected to be actively involved in the day-to-day management of the business. Individual EB-5s are not limited to one investor; multiple investors can pool funds together to infuse into businesses that they know will create the requisite amount of direct employee positions for each investor (the individual EB-5 requires that the investor demonstrate, after a two-year period, that their investment has resulted in the company creating 10 full-time and permanent positions filled by U.S. workers, whether citizens or permanent residents). The investor must demonstrate that the job creation requirement has been met by submitting evidence that includes W-2s, Form I-9 employment eligibility verification forms and payroll records.

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