In an article for EB-5 Investors Magazine, Burr & Forman attorneys Jennifer Moseley and Ashmin Chowdhury covered considerations for non-U.S. citizens interested in investment opportunities. 

“While obtaining permanent residency may remain the most important goal to investors, they should also review whether the investment opportunity provides a likelihood of repayment of their capital investment,” Moseley and Chowdhury wrote. “In addition, investors should review the opportunities to profit from their investments.”

To earn a visa under the program, the investment must create at least ten jobs. To succeed financially, investors should hire a financial or investment advisor to better evaluate opportunities based on their goals. Investors should also have an understanding of the forms of investment that build their capital stack for a transaction, which is comprised of senior debt, mezzanine debt, preferred equity, and common equity.

“An EB-5 investment through a regional center is typically made to the job-creating entity (JCE) as a loan, whether senior or mezzanine,” Moseley and Chowdhury explained. “A senior loan would be secured by the underlying property and/or other assets of the JCE, while a mezzanine loan is a lower priority loan and secured by a pledge by the owner of the JCE of the ownership interests in the JCE, rather than secured by the assets of the JCE.”

While not as common, EB-5 investments can also be made as equity investments or ownership interest in the JCE, which can be preferred or common equity interest.

For the full article, including an explanation about how each type of capital relates to the other, please click here.