Thanks to recent changes to the EB-5 program, many EB-5 investors are receiving their physical U.S. Green Cards in a matter of months. Additionally, investors who live in the United States on H-1B or similar visas are often approved for work and travel authorization in a matter of weeks.
While making an EB-5 investment in a real estate project can open the door to unique immigration benefits, it also requires a significant financial commitment of at least $800,000—not including attorney fees, United States Immigration and Citizenship Services (USCIS) filing fees, and other related expenses.
The funds you use for your EB-5 investment may represent a significant amount of your net worth, or even most of your long-term savings. Since many EB-5 projects offer repayment timelines of several years, these funds will likely have to remain invested and at risk for a considerable period of time.
Additionally, your immigration goals (and your family’s) depend on the success of your EB-5 investment. You and your dependent family members will qualify for U.S. Green Cards only if your investment complies with USCIS’s requirements, including creating at least 10 jobs.
As an EB-5 applicant, you will have a great deal at stake in seeking your financial and immigration goals. And you will entrust an EB-5 company to help you achieve these goals.
EB-5 companies are in charge of overseeing the flow of EB-5 funds into EB-5 projects through entities known as regional centers. EB-5 companies are also responsible for choosing high-quality real estate projects to sponsor.
However, not every EB-5 company has a trustworthy and experienced senior team. Specifically, the individuals managing an EB-5 company may not have the expertise in finance and real estate to protect your funds and help you get Green Cards for yourself and your family.
If you invest with an EB-5 company with an unqualified management team, both your funds and immigration goals will be at risk.
In this post, we explain how to examine the credentials of an EB-5 company’s management team and choose a trustworthy firm to handle your investment. Following these steps will maximize your chances of success.
Creating Successful EB-5 Projects Requires Expertise
Not Every Member of the EB-5 Industry Is Well-Qualified
Is This EB-5 Company Well-Qualified? Key Factors to Consider
Meet EB5AN’s Executive Team
Creating Successful EB-5 Projects Requires Expertise
Nearly every sector in finance has demanding professional requirements for individuals who oversee large capital raises, investment funds with numerous investors, or other large transactions.
In particular, EB-5 companies need a qualified and experienced team to create low-risk projects and help investors succeed.
Similar to large investment management firms, EB-5 companies often raise a significant amount of capital, sometimes amounting to hundreds of millions of dollars. For EB-5 investors to qualify for Green Cards, every tranche of capital must be fully deployed to the EB-5 project. In addition, the regional center must oversee the eventual repayment of each investor’s funds and then disburse the capital back to the investors.
In managing this capital, EB-5 companies have a fiduciary obligation to protect their investors’ interests. They must also comply with USCIS’s guidelines for structuring EB-5 deals, Securities and Exchange Commission (SEC) regulations, and other regulatory frameworks.
Aside from the financial aspect of their operations, EB-5 companies face a unique challenge in finding real estate projects that are both financially viable and well-suited for USCIS’s requirements for the EB-5 program—as well as ensuring compliance from the start of the investment until each investor completes the EB-5 process.
In many aspects, structuring an EB-5 deal can be more complex than traditional real estate investment management. Many more factors and limitations come into play. An EB-5 company will need to combine experience in finance, immigration law, accounting, and real estate investment to create a high-quality EB-5 project and ensure that their investors receive their funds back and qualify for Green Cards.
Therefore, it’s crucial for you to choose an EB-5 company with a well-qualified management team.
Not Every Member of the EB-5 Industry Is Well-Qualified
Despite the complexities involved in overseeing EB-5 funding, the EB-5 program requires no professional experience for individuals to create or manage a regional center.
Individuals are only barred from operating a regional center if they have been involved in a case of fraud with a liability of more than $1 million, have a criminal conviction in the past 10 years, or are not U.S. citizens.
Under these rules, an 18-year-old with no professional experience could potentially be allowed to manage a regional center.
In the past, the EB-5 industry has seen several instances of EB-5 companies run by individuals with little to no experience in finance, real estate, or EB-5 immigration. Unsurprisingly, EB-5 investors in such projects often lose all or part of their funds and ultimately do not receive permanent U.S. Green Cards.
With a volatile economic environment in the United States, fluctuating interest rates, and a dynamic real estate market, many EB-5 operators simply lack the expertise needed to structure successful projects.
If you examine these operators’ credentials, it becomes clear that they are not qualified to create large investment funds, oversee the flow of capital, and identify low-risk real estate developments.
Even if an EB-5 project run by such individuals is not fraudulent and complies with basic USCIS requirements, its investors will be unlikely to recover their funds and get Green Cards unless the EB-5 company is experienced and competent.
The best way to protect your financial and immigration goals is to look into the credentials of the individuals involved in an EB-5 company and make sure that they are adequately qualified in all facets of the EB-5 industry—before putting $800,000 at risk.
Is This EB-5 Company Well-Qualified? Key Factors to Consider
Suppose an investment fund by a leading Wall Street firm is seeking a capital raise of over $100 million. If you were an experienced investor, what would you expect from the individuals managing this investment fund?
You would likely expect a solid educational background from each of the principals and a strong and proven track record of repaying investors in similar raises. Before putting your funds at risk, you would make sure this firm has a history of managing large assets with consistent, high-performing returns, preferably in the same asset class.
As an EB-5 investor, you should evaluate EB-5 companies under these same high standards.
Unfortunately, the leadership of many EB-5 companies would never be considered reliable if held to these standards. With little to no experience or a reliable track record, investing with these companies will likely put your funds and immigration at unnecessarily high risk.
For example, suppose that the principal of an EB-5 company is a younger individual who has a background in sales. His sales approach may be compelling, but he would lack the experience necessary for structuring EB-5 deals. This EB-5 company is highly unlikely to return your funds and help you get permanent U.S. Green Cards.
Instead, look for the following criteria when evaluating an EB-5 company’s team:
- Education. Did the company’s principals graduate from highly regarded colleges or universities? Do they hold degrees in business, economics, law, or similar fields?
- Non-EB-5 experience. Have team members previously worked at top-tier firms in finance, law, real estate, accounting, or similar areas—preferably on large investment funds with large capital raises?
- Real estate experience. How experienced is the team in real estate and in assessing the risk profile of projects in various asset classes?
- EB-5 track record. Has the team structured successful EB-5 projects in the past? Have they structured projects that failed to repay their investors? How long has the team been working in the EB-5 industry? Can the team clearly explain the risks involved in their projects and the terms of the investment?
Finding the answers to these questions will help you find an EB-5 company you can trust with your funds and immigration goals.
Meet EB5AN’s Executive Team
At EB5AN, we recognize that experience and qualifications are essential to building trust with our EB-5 investors. Our team includes multiple experienced immigration attorneys and investment professionals who help us choose institutional-quality real estate projects for our investors.
We have been highly selective in assembling our senior team, and we are proud to lead the EB-5 industry in transparency and quality. For example, as many as 25% of all regional centers across the EB-5 industry recently received notices of intent to terminate (NOITs) from USCIS for failing to pay a required fee.
In contrast, every single one of EB5AN’s regional centers remains in good standing with no pending NOITs.
Additionally, our co-founders and managing partners—Sam Silverman and Mike Schoenfeld—come from backgrounds in high finance. For their work in the EB-5 space, Sam and Mike were recognized by Forbes magazine as 30 Under 30 National Winners for Social Entrepreneurship in 2018.
Meet the following key members of the EB5AN senior team.
- Sam Silverman, co-founder and managing partner. Sam has extensive real estate development, management, financing, and brokerage experience in the United States and in the People’s Republic of China. Sam was also previously employed by the Boston Consulting Group, one of the top management consulting and business strategy firms, where he worked directly with Fortune 500 Companies in the food service, media, manufacturing, hospitality, and real estate spaces.
Sam regularly writes for Forbes Business Council and has lent his expertise to the Wall Street Journal on matters related to the EB-5 program.
He holds a B.A. in Economics from Yale University, a Certificate in Financial Accounting from the London School of Economics and Political Science, and an M.B.A. from the Stanford Graduate School of Business.
- Mike Schoenfeld, co-founder and managing partner. Mike has extensive private equity investment, business diligence, management consulting, and entrepreneurship experience. Previously, Mike worked for AEA Investors, a leading middle-market private equity firm with $10B+ under management that is focused on making control-oriented investments in consumer goods, industrial goods, and business services companies. Mike was also previously employed by the Boston Consulting Group.
Mike holds a B.A. in Economics and a B.S. in Business Administration from the University of North Carolina at Chapel Hill.
- Jake Hoyle, vice president. Jake has extensive experience in finance, consulting, and EB-5 project structuring. Before joining EB5AN, he worked in fixed-income sales and trading at Jefferies Group, a middle-market investment bank. Jake also was previously employed by Crédit Agricole, a large international banking group, where he worked in international trade finance.
Jake holds a B.A. in Economics with a concentration in Business Management from Columbia University.
- Ahmed Khan, Esq., vice president. Before joining EB5AN, Ahmed was an associate at several distinguished law firms, including Klasko Immigration Law Partners, BAL, and Fragomen. He also served as a vice president at CanAm Enterprises, leading the firm’s Middle Eastern and Asian business development.
Ahmed has a broad understanding of immigration law and more than a decade of experience in EB-5 matters, including project due diligence, project selection, and investor source of funds. He holds a J.D. from the University of South Carolina.
Since 2013, EB5AN has structured 15 EB-5 projects with total development costs exceeding $2.9 billion. All of our EB-5 capital has either been repaid or is in good standing, and every single one of our projects has received USCIS approval.
“Making a successful EB-5 investment takes much more than simply finding a good project,” explains Silverman. “If you choose an EB-5 company with a competent and experienced team, you will be much more likely to be repaid on time and get permanent U.S. Green Cards.
“Before investing,” Silverman concludes, “always make sure to review the credentials of your EB-5 company’s team.”
For more information on making a successful, low-risk EB-5 investment, schedule a free consultation with the EB5AN team.
