Generally, investments under the EB-5 investment immigration program are structured as equity or debt investments.
Debt Model
- This model involves the creation of two enterprises—a New Commercial Enterprise and a Job Creating Enterprise.
- The investor makes the capital investment in the NCE.
- The NCE loans the capital to the JCE, which then uses the funds to create the minimum number of jobs mandated under the EB-5 program.
- The JCE repays the loaned funds, along with interest usually paid at the rate of 5-8%.
- The NCE is liquidated after the loan has been fully repaid by the JCE.
Equity Model
- The foreign investor acquires true or preferred equity in the JCE by making a capital investment directly into the job creating enterprise.
- The equity may be issued directly to the investor or to a New Commercial Enterprise that is fully owned by the immigrant investor.
- The JCE utilizes the funds to create jobs. This helps the investor immigrant fulfill the requirements imposed by the EB-5 visa program concerning the grant of permanent residence despite the fact that he or she has not made a direct investment in the USA.