For an investment to satisfy EB-5 program requirements, the capital must remain at-risk for the duration of the investment. This does not mean that investors are required to invest in “risky” projects. Rather, an investment must incur a risk of financial loss and potential for gain. In fact, any contractual rights to repayment are forbidden and would disqualify an investor from obtaining conditional residency status. In short, there is no guarantee that an EB-5 project will result in a return on investment (ROI).
The returns of EB5 investments are generally low, though the rate of return depends on the details of each investment. ROI is not a guarantee, but investors in projects that employ a loan-based model might earn 1–2%, while equity investors’ earnings will vary based on the enterprise’s profitability. However, the primary goal of an EB5 investment is obtaining a Green Card, not making a profit. Investors are likely to prioritize the immigration risk of a project over its earning potential.
For an EB5 investment to be successful, it must remain compliant with United States Citizenship and Immigration Services (USCIS) regulations. The agency is primarily concerned with employment generation. There is no requirement that the EB-5 project be profitable, but there is a requirement for a comprehensive, credible, and feasible business plan. USCIS may consider a business plan to not be feasible if there are no projected profits. Even if an EB5 business does not make a profit, an investor can still receive their Green Card if they sustain their investment and create enough jobs. Serious complications can arise if an EB5 business suffers such a loss that the investment is no longer sustainable or the necessary jobs cannot be created. In such cases, the investment would likely fail, but this does not disqualify a prospective investor from making an EB5 investment again.
