There are various elements to consider when choosing an EB-5 project. Along with personal considerations like risk tolerance, desired budget, and preferred business locale, prospective investors need to consider whether or not a project will meet the stringent EB-5 requirements. For example, undertaking a project that doesn’t lead to the creation of the requisite 10 jobs will most likely result in your EB-5 visa being denied. Similarly, neglecting to do appropriate due diligence on a construction project could lead to a loss of funds and have a negative effect on your overall citizenship goals. If you want to increase your odds of EB-5 approval, take care to avoid shortcuts, and do the work. The goal is to ensure you’re making the right investment from the start.
1. Meeting Job Creation Requirements
To meet the EB-5 visa requirements, a project must result in the creation of at least 10 full-time jobs. Investors have two years to fulfill the job creation requirement, and those who fail to do so will likely not obtain their visas. It’s important to note that direct jobs will not be counted in cases when projects end before the two-year mark. However, indirect jobs created by the project are considered when evaluating an investor for EB-5 status.
2. Adhering to the Two-Year Timeline
Because of the strict timeline associated with the EB-5 visa process, prospective investors need to consider projects carefully to ensure they can complete the jobs requirement. Investors have only two years to create 10 jobs, and those who are unable to meet this requirement on schedule won’t obtain visas. With that in mind, investors should consider whether the budget for a project will affect its timeline. If funds are limited or insufficient, the project might hit delays that throw off scheduling and ultimately result in the need for more capital. The end result could be that the project doesn’t make it the requisite two years or fails to result in the creation of 10 jobs.
3. Assessing Budgetary Concerns
Along with evaluating the overall project timeline, investors should consider general budgetary factors. Strive to find a third-party evaluator who can assess the construction project using local economic figures and statistics and ensure it meets all EB-5 requirements. Referring to national data alone could result in your projected jobs output being inaccurate.
Taking the local economy into account is also important for determining funding needs. After all, investors considering a construction project in San Francisco will almost certainly need more capital to achieve their goals on time than those looking at projects in Atlanta. In this way, location can have a significant effect on your ability to meet the jobs requirement. An investor working in a large or expensive city might have a harder time adding jobs than one starting a business in a smaller area with a lower salary and cost of living.
4. Understanding USCIS Accepted Expenditures
Before choosing an EB-5 construction project, investors need to consider United States Citizenship and Immigration Services accepted expenditures. While the USCIS tends to accept some expenditures without question, others may raise red flags and affect the outcome of your evaluation. Having a thorough understanding of the USCIS rules and regulations is the best way to minimize risk and protect your EB-5 visa status.
For example, hard construction costs tend to be accepted with less hesitation. In most cases, investors can safely add costs associated with labor, shoring, materials, and demolition to their evaluations. On the other hand, soft costs are more problematic from a reporting perspective, though many can still be added to an evaluation without risk. Soft costs that are considered “safe” include fees associated with engineers, architects, insurance professionals, and attorneys whose services aren’t being used for the EB-5 process.
Some expenses are not permitted. When calculating expenditures for your EB-5, avoid including permits, local fees, and property tax costs.
5. Conducting a Thorough Analysis
Before selecting an EB-5 project and embarking on your citizenship journey, it’s important to perform a comprehensive evaluation of the project, taking all the essential elements into consideration. It’s particularly important that prospective investors do their due diligence to ensure a project will meet the jobs requirement. This is the most important factor in determining EB-5 status. Additionally, investors and their representatives should evaluate available capital and consider whether its sufficient for the project with regard to both location and timeline.
Secure the Help You Need on Your EB-5 Journey
Of course, even the most thorough evaluation can’t ensure that your EB-5 construction project will run smoothly. Problems can crop up when you least expect it, throwing a wrench into your timeline and goals. Like any investment, an EB-5 construction project is a risk, but conducting a thorough investigation at the start can go a long way toward keeping your money safe and protecting your citizenship goals.
Ready to get started on the journey to obtaining your EB-5 visa? Our knowledgeable team has the experience and expertise to support you every step of the way. Call today or contact us online for help with your construction project.