Direct Investments For The EB-5 Program
Visa or investor visa program applicants can choose to make a Direct Investment. This involves investing in an existing business, including expansion.
There are many business opportunities available over a wide range of areas.
Categories include, but are not limited to, a hotel, gas station, convenience store, retail stores, or restaurants. They could also include IT or web development businesses, or others involving technology.
Financial Requirements for the EB5 Direct Investment Program
As with other options for the EB5 direct investment program for Indians, the financial requirements are a $1,000,000 investment or $500,000 if within a targeted employment area (TEA) or qualified rural area.
Importance Of Job Creation For EB5 Direct Investments
A minimum of ten full time jobs must be created, which is an important consideration for a Direct Investment.
Investing in multiple locations to meet job creation requirements.
A single location, such as a retail store or restaurant, may not be sufficient for creating ten jobs. However, investing in more than one location is more likely to do so.
For example, opening two retail stores under the same investment which each create five full time jobs meets this requirement. The required full time jobs to be created must not include the investor and family members.
Created jobs must be carefully documented within the application.
The responsibility of demonstrating the creation of at least ten full time jobs falls on the investor.
Investing In A Business Expansion
Since Direct Investments can include expansion of an existing business, this does allow for a franchise opportunity. This is why hotels, restaurants, and convenience stores are often selected as a Direct Investment.
However, the visa or investor visa program investor must perform their due diligence. Even though a template for the required job creation, including indirect and induced jobs, is ready, there is more to consider.
A successful business in one community does not guarantee success in another community.
For example, suppose a typical customer of a convenience store under consideration is a male between ages 18 and 34. The Business Plan should show the demographics surrounding the existing store(s), including the portion of 18 to 34 males. It should also show size and status of 18 to 34 males in the area surrounding the Direct Investment store(s).
There are many factors to consider when creating your business plan.
Along with population, depending on the type of business, the spending habits of potential customers can be a factor. Accordingly, showing that the products or services are locally affordable is just as important.
In many cases, the franchise host will be a solid source of information. However, not all have sufficient information about available communities.
An EB5 investor program for Indians applicant is not required to select a franchise for a Direct Investment.
There is also not a minimum or maximum requirement of the number of franchise locations within a Direct Investment.
For example, suppose a single franchise location costs $250,000. The Direct Investment could then be for the purchase of two or four separate locations. The number of locations would be two for a $500,000 investment or four with a $1,000,000 investment.
In this event, the financial and demographic research for each location must be a part of the Business Plan.
There is a lot of information online regarding the EB-5 Direct Investment Program. For your convenience, we have included some links: