How secure are EB-5 investments?
How secure an EB-5 investment is depends entirely on the project at hand and, if making an indirect investment, the regional center. In general, all EB-5 investments carry inherent risks because they must comply with the “at risk” requirement in accordance with the EB-5 program’s regulations.
The at-risk rule is enforced to ensure that an EB5 investment is used to fund a new commercial enterprise (NCE) and help enhance the U.S. economy. The investment must incur just as much probability of financial loss as profitable gain. The two main types of risk are financial risk and immigration risk.
Financial risk entails the possibility that the investor’s capital may not be returned; in other words, there is no guarantee of profit. EB-5 regulations prohibit any sort of contractual agreement that ensures repayment of investment capital because this would disqualify the investor from obtaining a U.S. green card.
Immigration risk entails the possibility of not being able to acquire U.S. permanent residency, despite making an EB-5 investment. United States Citizenship and Immigration Services (USCIS) will evaluate an I-526 petition to see if the EB5 investment was made into an eligible project, adheres to the at-risk requirement, and creates at least 10 full time jobs. Successful completion of these requirements will result in a two-year conditional residency. At the end of this period, investors must file Form I-829, and further adjudication will determine if the investor qualifies for a green card.
For a foreign national who wishes to relocate to the United States, these are all risks worth taking. Nevertheless, practicing due diligence is one way to mitigate the risk associated with making an EB-5 investment. If investing through a regional center, the investor should examine the regional center and its history of petition decisions from USCIS.
Prospective EB-5 investors are strongly encouraged to consult an immigration lawyer or industry expert to determine the most low-risk, secure project to invest in.