The EB-5 Immigrant Investor Program provides foreign investors who have the necessary capital with a pathway to obtaining U.S. permanent resident status in exchange for an investment in the U.S. economy. EB-5 investors must conduct thorough due diligence when selecting an EB-5 project as there are several requirements that projects must meet in order for investors to receive permanent resident status.
There are several factors that EB-5 investors need to evaluate in potential EB-5 projects to minimize financial and immigration risk prior to investing their hard-earned capital. These factors include ensuring that the developers and regional centers are transparent, trustworthy, and have successful immigration and financial track records. The projects should also meet the EB-5 program’s job creation requirements, have the necessary funding to move forward, and involve minimal financial risks.
Transparency and Trustworthiness
EB-5 investors should focus their efforts on reputable developers and regional centers that are transparent about their finances, communicate regularly with investors, and charge reasonable administrative fees. Developers and regional centers should also provide EB-5 investors with all the information and documentation necessary for a successful EB-5 application.
Immigration and Financial Track Records
Careful and thorough due diligence will help EB-5 investors avoid inexperienced, disorganized, and fraudulent developers and regional centers. Part of this due diligence requires looking at the immigration and financial track records of the prospective developers and regional centers.
When it comes to immigration risk, EB-5 investors need to determine if the developers and regional centers they want to work with are experienced in the EB-5 industry and what their track record looks like in terms of the approval and denial rates for previous I-526 and I-829 petitions. From a financial perspective, EB-5 investors should look at the developer and regional center’s rates of successful completion with prior projects as well as whether they returned capital to previous investors.
Job Creation Projections
EB-5 investors must demonstrate that their investment capital funded the creation of 10 new full-time jobs in the United States in order to fulfill the EB-5 program job creation requirements and receive their permanent resident status. To be on the safe side, investors should look for EB-5 projects that will create more than the needed amount of jobs for all investors in the project. To ensure this, EB-5 investors should look at the projects’ job creation procedures, their hiring plan, and the number of jobs that have been created thus far.
Funding
EB-5 investors should determine whether the projects they are thinking of investing in have adequate funding to move forward with and complete their plans. Projects may not always receive their desired amount of EB-5 capital investment, so they should have a plan in place for additional funding sources to avoid potential issues.
Return on Investment
Before investing in an EB-5 project, investors should establish their financial goals for their investment. Most EB-5 investors are mainly concerned with immigration and are therefore satisfied with projects that offer low immigration risk and will not cause them to lose their investment. However, investors who are interested in a high return should evaluate the earnings potential of prospective EB-5 projects.
