Similarities with EB-5 Visas and Opportunity Zone Programs

Clem G. Turner, member at Chiesa, Shahinian & Giantomasi/Photo by Steve Hockstein/

NEW YORK CITY—Clem G. Turner has been representing clients involved in EB-5 visas for a decade. His representations include raising $400 million with an EB-5 investment in the $1 billion SLS Hotel and Casino in Las Vegas. The member of the law firm Chiesa Shahinian & Giantomasi has also handled several hundred EB-5 raises at the $1 million level with franchises such as Burger King, iHop and Dunkin Donuts.

Now, clients are also asking him whether Opportunity Zones could work with EB-5 fundraising.

With Opportunity Zones, investments in designated low income areas can provide investors deferrals, reductions and exclusions of capital gains taxes. The EB-5 program allows foreign investors to obtain green cards by investing $1 million in a business that employs at least 10 US workers. The investment requirement drops to $500,000 if the business is in a rural or economically depressed area.

“You’d set up an opportunity zone offering and market to US investors of capital gain. You’d set up an EB-5 offering and market it offshore to people interested in getting a visa. They could be in the same project, existing peacefully in the same capital stack. Not that they are not going to be tied or related to each other any more than any other senior loan in the project,” Turner explains.

However, he also says some similarities between the programs are worth considering.

EB-5 visa projects can be tied to distressed areas, similar to the Opportunity Zone requirement. Secondly, he notes investors in both programs are involved in longer durations with money locked up for specific time periods. With EB-5 programs, the investor must stay with his or her investment until the green card process is completed. With Opportunity Zones, permanent exclusion of the capital gains tax requires holding onto the investment for at least 10 years.

As a third point, Turner notes real estate is a good business for both Opportunity Zone and EB-5 programs. EB-5 employment requirements can be met with Opportunity Zone ground-up construction or major renovations that demand a minimum and often sizable workforce.

Finally, both the EB-5 programs and Opportunity Zones require investors hold equity in the projects requiring some structuring. He says with EB-5, the equity is often held in special purpose vehicles. In Opportunity Zones, the equity is often held in the project or by a parent company. Thus, an expert familiar with structuring investment vehicles for one program could apply experience from one regime to the other.

Even with the similarities, Turner points out a fundamental difference that initially distinguishes the two ways of raising capital. He opines that Opportunity Zones need a more viable and reliable way to get their projects in front of people with capital gains to invest.

“EB-5s usually grow a system of agents who pop up, who are typically service providers to high net worth individuals. People with projects in EB-5 can pitch their projects. There isn’t anyone like that yet in Opportunity Zones,” says Turner.

Developers need to make sure they have a network to assist in the fundraising. He adds, “Raising capital in the Opportunity Zone space requires talking to a lot of accountants. People who may represent people with capital gains isn’t the most efficient or speedy process.”

➤➤ Join the ADAPT: Opportunity Zones conference September 16-17 in Baltimore, MD. The new national conference series is aimed at identifying Opportunity Zones across all property types and geographic regions. This first-of-its-kind event will educate, connect and celebrate the investors, developers and owners with the people behind the planning and decision-making, such as architects, consultants, academics and, most importantly, municipal officials. Also, be sure to take a look at our current adaptive reuse and opportunity zone nomination form and submit your project! Deadline is fast approaching June 7th.

Click here to register and view the agenda.


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