The CED blog has written previously about the EB-5 program, which as a reminder allows foreign national to obtain a green card for themselves and their families in exchange for an investment in the United States of either $1 million, or $500,000 in an area that is designated as particularly high need (for more information, read here). These visas are an interesting pathway for high net worth foreign nationals to fast track their approval for residence in the United States, and were designed to encourage meaningful investment in the country. However, given the complications associated with finding an investment, and the increasing popularity of the program, since its inception a number of specialty firms have risen to present EB-5 compliant investments to applicants.
In the CED blog’s previous discussion of the program we highlighted the construction of a hotel and marina in Wilmington, NC, which was led by USAInvestCo, a Wilmington based developer whose principals have engaged in projects around the country, and which focuses on providing EB-5 investment opportunities. This post will highlight a similar firm, Education Fund of America, which provides investors with the opportunity to allocate capital to Charter schools, including at least four in North Carolina according to their website.
Charter schools commonly borrow funds when they are getting off the ground, as many of their initial startup costs must be paid before state funds begin to arrive. Education Fund of America helps to provide capital to Charter schools by pooling EB-5 investments from multiple foreigners, and investing those pooled assets in a variety of Charter School projects. This not only drives capital to an interesting and potentially impactful niche, but helps protect investors from the possibility that their investment may not succeed. In the meantime, schools like Thunderbird Prep, Wayne Prep, Charlotte Choice, and Kidz Rock Prep have received funding.
EB-5 Visas are becoming increasingly difficult to obtain – the annual cap is 10,000, and although in its first year the program only issued 700 visas, and according to CNN it ran out of slots for the first time in 2014, with over 90% of visas going to Chinese nationals. The Program is also not without its critics, including those with concern over ‘buying a visa,’ and others who fear that investment firms may prey on families seeking entry to the US. However, amongst these concerns, the EB-5 program continues to have the potential to achieve success in attracting investment to interesting and impactful projects.