Additional Advantages to Look for in Low-Risk EB-5 Projects

EB-5 investors have two main concerns: whether investing in an EB-5 project will guarantee them U.S. permanent resident status and whether they’ll get their invested funds back.

To achieve these goals, EB-5 investors have to choose the right project. Choosing the right EB-5 project requires thorough due diligence to ensure it is viable and offers low immigration and financial risks.

Most investors already know this and will typically hire EB-5 professionals to help review the EB-5 offering’s financial projections, secured funding, and developer reputation to evaluate project risks and identify low-risk projects. However, the fact that an EB-5 project is low risk does not guarantee that it will deliver on the promised EB-5 Green Card or that investors will get their money back.

This is where certain additional advantages that can boost your chances of achieving your immigration and financial goals come into play.

In this article, we’ll discuss these additional advantages to look for in low-risk EB-5 projects.

Additional Advantages to Look for When Selecting Low-Risk EB-5 Projects

EB-5 project due diligence typically involves analyzing financial projections, funding sources, the investment structure, and regional center and developer track records to identify project risks. While these can help you identify low-risk projects, they do not automatically guarantee a project’s success.

Below are some additional advantages to look for in a low-risk EB-5 project. These advantages will further secure your investment and increase your chances of receiving your EB-5 Green Card and having your invested funds returned to you.

Form I-956F Exemplar Approval

Regional centers must submit Form I-956F for every EB-5 project. This form gives USCIS vital information about a project, including the project’s location, qualification for TEA status, amount of EB-5 capital to be raised, offering documents, estimated economic impact, and entities involved in the project. It also includes background information on persons holding positions of authority in the new commercial enterprise and job-creating entity.

Reputable regional centers also attach a complete template of Form I-526E that investors in the project will fill out with their I-956F submission. This template is known as an “exemplar.”

A Form I-956F exemplar approval means that USCIS has reviewed a project’s documents and found that they comply with the EB-5 program guidelines. This means USCIS will approve your I-526E petition once you meet the personal eligibility requirements. Your petition will also be processed faster since the project has already been reviewed.

Job Creation Guaranty

EB-5 offering documents usually include an economic impact assessment detailing the estimated number of jobs the project will create and how they’ll be allocated to EB-5 investors. However, these educated estimates do not always become reality. And EB-5 investors can lose their chance of becoming U.S. permanent residents if their investment does not create the required 10 jobs.

This is why investors should check for job creation guaranties when analyzing EB-5 offerings. A great way to assess a project’s job creation potential is to check for a job creation buffer. A job buffer refers to the number of excess jobs that are expected to be created in comparison to the actual jobs required by the project’s EB-5 investors.

For example, a project with 18 EB-5 investors must create at least 180 jobs for all EB-5 investors to obtain their Green Cards. If the estimated job creation for the project is 245, it means it has 65 buffer jobs. If, for any reason, it’s unable to create the 245 projected jobs, it should still at least create the 180 needed by its EB-5 investors to obtain legal permanent resident status.

Ongoing projects that have created substantial EB-5-eligible jobs offer greater immigration safety than those still in the planning stage. Many of these projects create jobs before ever receiving EB-5 investments. For example, EB5AN’s Twin Lakes project has created all the required jobs for its current and potential EB-5 investors, meaning that all of them will meet this requirement for receiving a Green Card.

Project Completion Guaranty

The fact a project meets all USCIS requirements for EB-5 investment does not guarantee project success. If a project fails, it will not create the required jobs, and investors may not get their permanent Green Cards and may lose their money.

This is where a completion guaranty comes in. A completion guaranty ensures that the developer will fund excess project costs above the budget.

However, a completion guaranty by itself does not guarantee project completion, as the success of an EB-5 project depends on several factors. These factors include the project’s structure, construction timeline, and capitalization. A fully capitalized project, for instance, is more likely to be completed and poses lower risks for EB-5 investors.

Project type and demand can also impact project completion. A project will achieve profitability faster if there’s a strong demand. And a project that is already profitable is more likely to be completed successfully and create the required number of jobs.

Within real estate investments, EB-5 home projects typically achieve profitability faster than rental projects because homes can be sold while the project is ongoing, whereas rental projects are not profitable until completion. Single-family home projects require minimal upfront capital, and revenue from home sales can then be reinjected into the project.

I-526E Refund Guaranty

A regional center cannot guarantee that USCIS will approve your I-526E petition. However, good regional center project offerings include an I-526E refund guaranty, as this guaranty ensures investors can get their funds back if USCIS denies their I-526E petition.

Without this guaranty, your capital may remain invested for a long time without any Green Card benefits, and you may still lose your funds if the project fails. When analyzing an EB-5 offering, check for an I-526E denial guaranty backed by a well-capitalized entity.

Repayment Guaranty

When examining investors’ petitions, USCIS is primarily concerned with the “at-risk” and job creation requirements, not whether investors receive their invested funds back. This “at-risk” requirement means that the new commercial enterprise cannot issue you a guaranty that you’ll get your money back after the project is completed. USCIS does, however, permit a repayment guaranty if the funds remain “at risk.”

Although the developer cannot grant you a repayment guaranty, you can receive one from a third-party guarantor. A repayment guaranty stipulates that the guarantor will repay your investment if the developer is unable to do so.

Investors must verify the authenticity of a repayment guaranty and the guarantor’s financial strength before subscribing to an EB-5 offering. A secure repayment guaranty is one given by a well-capitalized guarantor with enough net equity and asset diversity to cover the entire loan. If the guarantor meets these standards, then their repayment guaranty provides a safety net that further secures your investments and increases your chances of recouping your capital.

EB5AN Offers USCIS-Approved Low-Risk EB-5 Projects

Choosing the right EB-5 project is essential to successfully becoming a U.S. permanent resident and getting your money back. You must thoroughly research and analyze every aspect of the EB-5 project to ensure the security of your investments.

EB5AN offers some of the best EB-5 regional center projects in the market. We offer our clients first-rate, low-risk EB-5 projects with a 100% USCIS approval rate.

All our EB-5 projects have received Form I-956F exemplar approval from USCIS and have created thousands of jobs for EB-5 investors. Our projects also have I-526E denial refund guaranties, project completion guaranties, and repayment guaranties.

For more information about our low-risk EB-5 projects, book a free one-on-one consultation with our EB-5 experts today.