Whichever part of the EB-5 investment process you find yourself in, whether you’re still just researching or already invested in the program, it’s never too late to learn about EB-5 capital redeployment.

Defining Capital Redeployment

When an investor has an ongoing EB-5 investment project and they are filing form I-829 to lift the conditions from residency, it’s possible to run into additional problems. Because of high numbers of EB-5 investments, especially from countries like China, there can be a backlog of I-829 forms.

When then I-829 filing gets delayed, you may risk losing the eligibility for removing conditions. Specifically, the requirement that the investment funds should be at risk. If the project has been successfully completed and your funds returned to you, they are no longer at risk and will not fulfill the requirement.

In this case, you may need to redeploy the original amount of your EB-5 capital into another project to qualify for the I-829 removal of conditions. This was underlined by a USCIS memo which discussed the problem of funds not being at risk during the I-829 filing.

It’s not unusual to face the prospect of capital redeployment if the job-creating entity (JCE) you’re working with completes the project earlier than anticipated, or if the I-829 form is delayed for longer than normal.

When is Capital Redeployment Necessary?
In a normal, on schedule EB-5 project, you won’t need to redeploy your capital. But if your I-829 form has not been approved, you may not be approved if your capital is not at risk anymore.

Unfortunately, the USCIS has not put out much formal information about this topic, but from what they have released in memos, it’s important to understand the problem and solution. Redeployment is an option you will need to consider if your JCE meets the conditions of the job too quickly, returning the money for the project before the scheduled time.

Ways to Do Capital Redeployment

Keeping your money at risk does not mean that you have to undertake an entirely new EB-5 investment project.

Loaning to the JCE

You may be able to loan the capital to the JCE that you worked with originally. If your experience working with them before was good, it could be a potentially profitable partnership. But there are certain risks to this option.

Make sure to do the research and find out about the new project to which you will be loaning your capital. If it’s a long-term or complex project, it could keep your money tied up for longer than you wanted. Just because the JCE was efficient the first time does not mean they will be again for a different type of project.

Make sure to also understand how profitable the new project is set to be. It should be a project that you can feel comfortable being involved in, especially in terms of risks.

When you’re loaning money to a new JCE, you won’t be subject to the job creation restrictions that were placed on your initial investment project.

Investments outside of the JCE

It is the opinion of some experts that you are not required to invest in another JCE-related project to meet the “capital at risk” requirement. As long as you invest your money somewhere and put it at risk again, it may still count towards the requirement. This might include activities such as purchasing stock or investing in a real estate trust.

The benefit of investing outside of the JCE is that your investment can have higher liquidity, allowing you to regain your money quickly after your I-829 is approved.

Without strict guidelines from the USCIS, it’s hard to determine exactly how capital redeployment needs to be done. But you need to understand it in case you reach a place where your I-829 is stuck processing while your EB-5 investment project has been completed. Capital redeployment may not be a preferable option, however, it can save your chances of successfully removing the conditions on your permanent residency.

The EB-5 Visa process was formed so the U.S. could attract investors with high net worth. Qualifying investors are able to get a visa through the EB-5 Program, but only if they meet the investment standards, including a $1 million minimum investment or a $500,000 minimum investment in certain geographic areas.

While there are a lot of benefits to be found in the EB-5 Investment Program, including ownership interest in a U.S. company and the potential for a green card, there are processes that must be followed to help an individual qualify. For this reason, many investors choose to work with an EB-5 certified regional center.

Selecting an EB-5 Certified Regional Center

As an investor, you have to do your own due diligence before selecting a regional center to work with. One regional center is not the same as another, so you need to be selective about which one you choose to partner with for your investment.

Some things to look for:

Third-party experts
There are a lot of different facets involved in EB-5 investments, including the SEC, the USCIS, and real estate financing, to name a few. There should be experts in each facet to make the process smoother. These experts can help a regional center to compliant with EB-5 regulations in their respective areas of expertise.

Due diligence related to your investment
While you need to perform due diligence on the regional center, they have the responsibility to perform their own due diligence on all aspects of the EB-5 investment. This includes reviewing the project, developer, foreign partners, and investors.

Some due diligence actions to look for include understanding the project’s business plan, financial projections, timeline, budget, legal approvals, EB-5 compliance, and permits. They should understand the project inside and out.

The regional center should also thoroughly know the developer that will take part in the project, including tax returns, financial statements, and organizational structure documents. Developers need to have the specific experience and ability to complete the project.

Regional centers should be completing reviews on potential investors before accepting them to make sure they are likely to qualify for an EB-5 investment. Part of this review should include understanding the source of the investor’s funds.

Track record on EB-5 investments
You need to understand the regional center’s business model, their experience with past EB-5 projects (completion, timeline, success, etc.), guarantees to investors, and more. It’s important to understand how they have done in the past and what they will do to guarantee your success in the future.

Systems in place for tracking and protecting investor funds
Misuse of funds is a potential problem with investments, so you need to make sure the regional center has mechanisms in place to protect your money. Look for escrow management, satisfaction with developers before payments are made, checks and balances internally (such as multiple signatures before money is moved), and separate accounts for each investor.

Compliance training and education
Employees, consultants, foreign partners, and others should be thoroughly trained and educated in EB-5 compliance, or else you may not be able to trust the regional center to complete the project legitimately. This should be a constant process, as EB-5 laws are always changing, especially in the current immigration climate.

Controls in place for marketing of the project
Regional centers should be in complete control of marketing so that all investors can be sure of the information they’re getting. The regional centers should have a close relationship with all partners and should prepare all their own marketing materials.

These are simplified guidelines for selecting a regional center. Your own due diligence should be more exhaustive than what’s included here and should go beyond the simple guidelines for each suggested examination point. There’s no way to guarantee absolute success, but by checking on the procedures set by the regional center and the transparency of the operation, you can be more certain that you will reach your investment and EB-5 goals.

EB-5 investment is a path to getting a green card, but it can sometimes take longer than expected and involve more steps than you might have imagined.

I-526 Petition Approval

After you have submitted your I-526 petition for review, you have officially started the process for EB-5 based permanent residency. But approval of your I-526 does not lead directly to a conditional green card. Instead, it puts you in the current system’s queue.

Once your approval comes through, you are not immediately entitled to any immigration benefits or even allowed to apply for them. Instead, your application will be placed into the first in, first out (FIFO) based system. There are some regulations that can work for or against you in this process.

1. The priority date (date on which you filed your application) determines your eligibility in regard to other petitioners. When you filed your I-526 will help determine when you’re eligible for an EB-5 Visa.
2. Annual visas from one country cannot exceed 7% of all EB-5 Visas. No country can receive more than 7% of available EB-5 visas outright. There will be a cap once the 7% has been reached, cutting off all further attempts.
3. If all countries with eligible applicants have received EB-5 Visas, those who are held back by the 7% rule are able to get a visa on a FIFO basis. If all countries with applicants have received their limit of visas or their applicants have received all the visas requested (when under the 7% cutoff), those held back by the 7% cutoff will be allowed to receive the remaining unclaimed visas until the total annual limit (around 140,000) is reached. Applicants will be eligible based on their filing priority date.
4. 3,000 visas are reserved for targeted employment area (TEA) projects. If these visas are not claimed, they will become eligible for others in line.
5. 3,000 visas are reserved for investors working with a regional center. These visas will also be re-distributed if they are not all claimed.

Your country of origin has great impact on your waiting time. Unfortunately, Chinese applications for EB-5 Visas have overwhelmed the system to the point that there is a 10+ year backlog of applications. If you’re applying from China, you may have a very difficult time getting a green card in any reasonable time period.

If you’re applying from a country with low EB-5 petition numbers, you may be able to get a visa more quickly than others.

Some exceptions can help you jump ahead of the queue, including doing a project with a regional center or a project within a qualified TEA. Because there are a certain number of visas allocated for these two categories of projects, they can help you get ahead of some people in the line, even if your priority date is later than theirs.

Getting a Green Card after I-526 Approval

Once your name comes up in the queue and you’re approved for your EB-5 project to move forward, you must apply for your green card officially through either adjustment of status (AOS) or consular processing (CP). You will not automatically be issued a visa, and you can still be found inadmissible to the U.S. if you do not meet the immigration criteria. This is something you should consider before even applying for an EB-5 project.

You are required to go through one of the two official processing before you can get a conditional green card. There are some similarities, such as both processes requiring an interview, but they are fundamentally different.

Adjustment of Status (AOS)

In order to apply for AOS, you have to currently be inside the U.S. with a valid non-immigrant visa of some sort. This does not include visas like the B1 or B2, as these have a strict requirement that the holder should not be applying for AOS while on these types of visas. Most other visas do allow for AOS.

AOS can take longer than CP, but does allow for denials to be challenged because decisions by USCIS officers are often based on discretion rather than facts alone.

Consular Processing (CP)

If you don’t have a valid non-immigrant visa to the U.S., you have to apply for your EB-5 conditional green card through a consulate. This must be a consulate in your home country. If you have legal residency in another country, you may be allowed to apply through that country’s consulate instead.

CP is usually a shorter process than AOS, and it has a lower refusal rate. Decisions in CP need to be fact and evidence based, requiring the officer to provide specific proof that you are inadmissible. This makes it less likely that you will be denied, but the tradeoff is that you may not be able to have your case reviewed or the outcome challenged if you are denied.

Receiving Your Conditional Green Card

If you’re deemed to be admissible to the U.S., you will be granted a conditional green card that will allow you to legally live and work within the United States. If you fulfill the conditions of the EB-5 project, those conditions can be removed and you will have full legal permanent residency.

From this point on, you will be on a path to full U.S. citizenship. The time it takes to get to this point will vary based on where you’re applying from, the type of project you’re undertaking, and your current immigration status in the U.S.

All investors appreciate the necessity of analyzing and assessing financial opportunities. It is crucial to inspect every possible aspect of an investment to ensure that all potential risks are factored in. When evaluating an EB-5 investment, even more scrutiny and due diligence is demanded of the prudent investor.

EB-5 Direct Investment Opportunity

Foreign nationals desirous of U.S. citizenship have logically latched on to the EB-5 Program as perhaps the best avenue for gaining residency in the United States. Recent years have demonstrated the declining numbers of other types of U.S. visas, especially the H1-B Work Visa, leaving the EB-5 Visa highly attractive and viable for many immigrants.

Properly titled the EB-5 Immigrant Investor Program, this visa encourages immigration through the means of investments in the American economy. Specifically, this program requires foreign investors to commit $1,000,000 (certain circumstances can drop this to $500,000) to a commercial enterprise with an eye to creating a minimum of 10 new jobs within 2 years of starting the business. In exchange for such a deep commitment, the EB-5 investor will earn permanent residency for themselves, their spouse, and all dependent children under age 21.

Regional Centers vs. Direct Investments

EB-5 applicants are offered two choices for investment: direct investment or regional center investment. The difference between the two is significant and must be understood by the investor before proceeding.

A regional center investment is a pooled fund of money that is professionally managed. Investors have no say in the daily operations; they are considered passive investors who are looking to professional managers to meet the goal of creating at least 10 new jobs per investor. Since some regional centers will raise funds from as many as 1,000 individual investors, they are typically working with hundreds of millions of dollars or more. Their investments often include large hotels, hospitals and other health facilities, and shopping centers.

Regional center investors do not look for spectacular returns on their funds, but rather hope for a conservative return of 2% to 3% per year with preservation of original capital as a top priority. An additional benefit that accrues to a regional center investor is that documentation proving the creation of 10 new jobs is provided by the regional center, which is the key to citizenship for the investor’s family.

In a direct investment, a foreign national decides to start her or his own business and retains direct and complete control over the daily operations and long-term goals. As most entrepreneurs know, the upside potential of one’s own business is significantly higher than what a passive investment can offer. This makes sense, as the entrepreneur is actively involved in the business on a regular basis. Often, a business owner will take a small paycheck while working long hours in the early stages of a new business, in exchange for a higher return in the back end.

Understanding New Hires for Direct Investments

Investors choosing the entrepreneurial route for their EB-5 investment must understand the nuances concerning what will qualify as a new job. Since their goal is the creation of at least 10 new jobs, and since attaining U.S. citizenship is dependent upon that goal, the smart entrepreneur will carefully study the rules explaining which jobs count towards that total. Because the business owner must accomplish this within the first 2 years of operation, advance preparation and knowledge is strongly recommended.

Equally challenging is learning and following American laws concerning the hiring and firing of employees. As a direct business owner, the entrepreneur is obligated to adhere to all laws concerning employees, including understanding their rights and knowing what information an employer can and cannot ask of their employees.

Of primary importance is to understand that the business owner and any immediate family members may work for the new commercial enterprise, but none of them can be used in the total employee count of 10 that must be reached in two years, as they are not yet U.S. citizens. Similarly, while any other employee who is not a U.S. citizen or does not enjoy temporary residency in the U.S. may be hired, they are not included in the total employee count needed to meet the EB-5 requirements.

While an employer is not allowed to ask about the citizenship status of an employee, this restriction can be overcome for EB-5 investors by requesting all employees submit proof of citizenship or immigration status. This will help the employer avoid possible discrimination suits while also determining which job applicants qualify for the 10-job requirement.

The following persons qualify for the 10-job obligation:

• S. citizens
• Permanent residents
• Temporary residents, including asylum seekers, refugees, and aliens living in the US under deportation suspension

Other people may or may not meet the requirements set by EB-5, so any applications from persons other than those listed above need careful examination.

How I9 Documentation Works

I9 documentation must be provided by any person wishing to gain employment. The most common identification asked for, and given by the potential employee, is a driver’s license and a Social Security card. If a person provides a valid and current driver’s license (or state ID) and a Social Security card, you can be assured that they will count towards the 10-job requirement.

While these are the most customary forms of identification and proof of ability to work, other types of IDs are also acceptable under federal law. In some cases, these IDs may indicate that a person was not born in the U.S. but can provide the necessary proof of their approval to work in the U.S.

Because I9 documentation may not deliver indisputable proof of the ability to work in the U.S., and because employers must be careful when asking questions that may flout the rule of law or invade the rights or privacy of job applicants, EB-5 direct investors can include on job applications for their company questions concerning citizenship and immigration status. It is not considered as discriminatory if all employment applications are asking the same information of possible employees.

For reference purposes, EB-5 employers are encouraged to study and understand the I-9 documentation requirements as listed on the USCIS website.

Extra Obligations for EB-5 Employers

If proper care is not taken in collecting the information necessary to prove the hiring of 10 or more qualified employees, the EB-5 employer will not earn the U.S. citizenship they spent so much money on and worked so hard to earn.

In addition to the burden of meeting the 10-job requirement, all other laws affecting employers and business owners must be known and followed. As any American business owner knows, legal and equitable treatment of employees demands thorough knowledge of the laws governing employees and their rights. Many employers have been sued for trespassing on the rights or privacy of their employees. Mistreatment or illegal actions against an employee can be a costly mistake. For an EB-5 employer, such an error can also cost the entire family their chance at American citizenship.

Interested EB-5 investors should not be discouraged by the additional obligations placed upon them. Most EB-5 direct investors look to trusted and experienced EB-5 advisors to guide them through the application process and to assist in the documentation of the successful hiring of 10 or more employees to their new commercial enterprise. Successful EB-5 investors in the past are now running profitable businesses in America that pay their way as new American citizens, thanks to the help of qualified EB-5 counselors.

Among Asian nationals, South Koreans tend to have a good understanding of the immigration picture in the United States. In conjunction with their improved economy, South Korean citizens have recently exhibited greater interest and participation in the EB-5 Visa program offered through the U.S. Citizenship and Immigration Services (USCIS).

An EB-5 Immigrant Investor Program Overview

The EB-5 Immigrant Investor Program is perhaps the most ideal format designed to create American citizenship opportunities for foreigners. Even with the subject of immigration remaining a hot topic for many Americans, few U.S. citizens voice concern about the intent of the EB-5 Visa.

This is because the EB-5 Program is built to invite foreign investors to start a U.S. business which generates new American jobs. Specifically, $1,000,000 is required to fund a new commercial enterprise. Within 2 years, at least 10 new full-time jobs are created from the efforts of that operation. This concept has proven successful, infusing billions of dollars of new capital into the American economy while generating new employment opportunities for working Americans.

Even more attractive is the TEA investment option within the EB-5 Program. TEA stands for Targeted Employment Area, and it identifies areas in America needing businesses that can provide work for locals. Specifically, a TEA is defined as either a rural area (which must be beyond the outskirts of any town populated by 20,000 or more people) or areas in metropolitan areas experiencing high unemployment. High unemployment is deemed to be any region with unemployment rates 150% higher than the national average. The fiscal year of 2017 ended with a national 4.4% unemployment rate, so any region suffering from unemployment of 6.6 percent or higher is eligible for TEA designation. Selecting an investment with a TEA designation cuts the financial commitment in half, down to $500,000, a significant reduction in the original investment requirement.

In return for this sizable commitment, the foreign investor is granted EB-5 Visas for immediate family, which includes the spouse of the investor and unmarried children under age 21. This unique feature of issuing bulk visas makes the EB-5 Visa the most attractive and surest choice for families desiring entry into the U.S.

Perhaps best of all are the methods of investing available to a foreign investor. Most EB-5 Program participants opt for a regional center investment, which is a pooled fund managed by seasoned professionals. Each investor is allocated a proportionate share of the investment, and it is common to have upwards of 1,000 investors in a regional center program, providing a regional center with hundreds of millions of dollars. This gives the fund sufficient financial muscle to construct hospitals, hotels, or other large projects, which in turn will easily generate the required 10 jobs per investor. The investor has no direct responsibility for the performance of the regional center, and may pursue other interests, including a separate career.

Some EB-5 investors choose an entrepreneurial path, building their own commercial enterprise which they directly manage and control. This path demands more commitment and attention to the business by the owner; however, potential returns are usually greater for such a hands-on operation. Entrepreneurs like this thrive in the direct involvement of their investment.

A Growing Popularity Boosts Demand

South Koreans can look to both Chinese and Vietnamese EB-5 participants in the past to gauge the popularity of and subsequent difficulty of gaining admission to the EB-5 Immigrant Investor Program. This is because both China and Vietnam are now marked as oversubscribed countries—both have been put on waiting lists due to the flood of prior EB-5 submissions from citizens of these nations.

The ruling for determining oversubscription is simple: immigrants from one country are allotted no more than 7% of all types of U.S. visas issued in a given year. Once a country has exceeded their 7% allowance, a backlog is created which captures and holds all future applications until a future date, called the cutoff date, is reached. Once an application reaches or passes the cutoff date, it can be processed by the USCIS.

To get an idea of how far back this date may be pushed, in May 2018 the State Department set June 22, 2014 as the cutoff date for both Chinese and Vietnamese immigrants, creating a nearly 4-year processing delay. As time moves forward, the cutoff date will also push forward, but not equal to the passing of time. For instance, by May 2019, it is probable that the new cutoff date will not be June 22, 2015 (a year longer than the current cutoff date). More realistically, the new cutoff date will be closer to December 2014 or perhaps early 2015. In other words, as time progresses, the cutoff date will likely be further away than the almost 4-year wait currently in place.

Reasons for Prompt Action

South Korean citizens interested in taking advantage of the EB-5 Program should not delay in submitting their petition. While South Korea has not yet reached the stage of oversubscription, all indicators point to this nation being next in line to do so.

In addition to the increasing number of South Korean applicants, there is a strong likelihood that Congress will make changes to the EB-5 Program. There have been discussions of raising the minimum investment requirement, tightening definitions for TEA designations, and possibly reducing the number of visas issued in the future.

Also, families with children nearing the age of maturity (21) should be concerned about locking in a date before a child reaches age 21. If South Korea is hit with delays of 3 years or longer due to oversubscription, a child near maturity may end up “aging out” and no longer be considered a dependent minor of the EB-5 applicant.

USCIS has established a clause, the Child Status Protection Act (CSPA), to address the problem of minors aging out before completion of the EB-5 Visa process. The CSPA allows children who were minors at the time of the EB-5 application to retain their minor status through the processing period. However, if the visa is delayed due to backlogs or waiting lines, this protection will likely be lost.

Even without cutoff dates or backlogs, there is a minimum 2-year wait before permanent residency is granted to a foreign investor, as the applicant is required to document the 10 new jobs that were created from the investment program from the first 2 years of operation.

Experts caution that the recent escalating activity by South Koreans in the EB-5 Immigrant Investor Program may soon create backlogs like those experienced by aspiring Chinese and Vietnamese immigrants. This fact alone should motivate South Korean nationals to begin immediate plans for participating in the EB-5 program.

Since so many options are open to the South Korean immigrant investor, working with a qualified EB-5 consultant is a smart choice. By doing so, the petitioning South Korean national can remain informed and up to date on the ever-changing EB-5 Program.

The EB-5 Program has recently seen a dramatic increase in the number of Indian EB-5 Visa applications filed. On April 6, 2018, U.S. Citizenship and Immigration Services (USCIS) announced that the congressionally mandated H-1B Visa cap for fiscal year 2019 had been reached within only five days of the agency opening applications. Yet again, the fates of many professionals and skilled workers in the US remain uncertain, driving interest in the EB-5 Visa program in an effort to attain security.

Once a little-known visa program, the EB-5 Program is becoming a common pathway for foreign nationals to immigrate to the USA. Due to immigration crackdowns and over-subscription to other visa categories, a number of other countries, including India, have recently turned to the EB-5 Program as a more secure way to obtain a U.S. visa. At the end of the 2017 fiscal year, 174 EB-5 Visas were issued to Indian nationals, a 17% increase from the previous year.

EB-5 Program applicants who invest $1 million in a new commercial enterprise (NCE), or $500,000 in an NCE located in a targeted employment area, and create 10 qualified jobs, are eligible for lawful permanent residence in the U.S. for themselves, their spouse, and their unmarried children under the age of 21.

The H-1B Visa used to be a popular choice for Indians, as they made up more than 70% of the H-1B Visa holders. There are several possible reasons for this rapid increase in EB-5 Visa popularity, and they are mostly centered around the disadvantages of the H-1B Visa. However, recent changes and possible changes to come have made Indians question whether they should apply:

• H-1B applications are being scrutinized more closely.
• Redefining of an H-1B “specialty occupation” to preclude many IT and other positions that may have more than one possible major field of study for entry into the occupation.
• Denial of H-1B petitions that pay level 1 wages.
• Requiring H-1B employers to identify in advance the specific itinerary of all work locations at which the employee will work during the course of the 3-year H-1B approval period. This is often not possible.
• The potential shortening of the H-1B Visa term.
• H1-B Visa holders’ spouses, who have an H-4 Visa, may lose their ability to work in the U.S. On December 14, 2017, the Department of Homeland Security published the agenda item “Removing H-4 Dependent Spouses from the Class of Aliens Eligible for Employment Authorization,” intending to revoke the employment eligibility of H-4 dependent spouses. The proposed regulation is reported to need further revision and finalization is expected by June 2018.
• Massive backlog in the EB-2 and EB-3 immigrant visa categories. The wait time for a green card through an EB-2 Visa is currently anticipated to be 11+ years, while the wait time with an EB-3 Visa is currently anticipated to be 12+ years.
• May not appeal to wealthier applicants who can apply to the EB-5 Program and obtain more benefits. The H-1B visa requires employer sponsorship, which means applicants are limited to where they can live and work, whereas, the EB-5 Visa has no such limitations.
• Many employers are turning away H-1B Visa holders in favor of hiring U.S. workers. The “Buy American and Hire American” executive order directs federal agencies to review whether existing policies adequately prioritize American products and protect American workers. This was also reflected in USCIS’ stringent adjudication of H-1B petitions, as seen by 2017’s wholesale issuance of Request for Evidence (RFE) Notices and Notices of Intent to Deny (NOIDs). As a result, H-1B visas are increasingly difficult to obtain.

Making decisions involving large amounts of money is never a simple process. For immigrant investors interested in participating in the EB-5 program, this process usually involves researching hundreds of available projects and investment options. One consideration for investors is whether to put their money into a regional center project or to invest directly into an EB-5 project, perhaps their own project.

While there are many project options for you to investment, the low predicted return might be a deterrent. You might also want to have more control over the project. If your thinking starts heading in that direction, you will inevitably toy with the idea of creating your own project to invest in, either by using a direct investment model or a regional center investment model.

If you’re giving it some thought, there are a few things you should take into consideration before branching out on your own. Direct investments and regional center investments each have their own set of benefits and risks. Regardless of the type of project you select, you will benefit from the help of an experienced team of professionals who can help you with structuring your project model and associated documents and giving you valuable advice along the way.

Direct Investment or Regional Center: Pros and Cons

Investment Expectations
Currently, a minimum investment of $500,000 is required for EB-5 investments in projects that are located in targeted employment areas (TEAs). However, if you choose to invest directly into a project that you develop yourself, be aware that you will likely end up contributing far more than the $500,000 as well as many hours of your time. You will need to keep extensive documentation and ensure that all aspects of the project remain compliant with various federal, state, and local laws.

Total Investment Amounts
While a direct investment, especially in your own project, will give you more control over the project, it is also important to consider the extra costs that may be involved. Direct investments may give you a higher return on investment (ROI), but those costs may offset that. If you are running your own project, you will be required to not only invest your minimum $500,000 but also obtain the remainder of the needed capital for construction and operation of your new enterprise. Investors should also consider regulations that govern what jobs can be included in the job creation requirement of the EB-5 program. Direct investments require the creation of 10 full-time direct jobs for each investor. While some investors may wish to have their own project as a way to start a “family business,” family members who are employed may not be counted toward the 10 full-time jobs. It is also important to take into consideration the amount of minimum wage in the area and how much capital will be needed to pay for 10 full-time employees.

Documentation Requirements
The job creation requirements for the EB-5 program are stringent and add to the difficulty of complying with various local, state, and federal regulations that govern the new commercial enterprise (NCE).

As an example, if the NCE is a restaurant, you must turn a profit (or at least avoid losses) and maintain customers like for any other restaurant, but you must also document all jobs created directly from the NCE and maintain detailed documentation showing that the jobs were not only created but maintained for a full two years. That information needs to be included with the I-829 Petition to prove that EB-5 Program job creation requirements have been met.

While this is certainly a time-consuming and stressful process for an investor who has chosen to invest directly in his or her own project, investing through a regional center can cut out some of that. Regional center investments allow for more job types to be counted, including indirect and induced jobs. The process is thus much simpler and less nerve-wracking, since there is a much greater job cushion. In addition, the investor is no longer solely responsible for ensuring job creation for every single investor; the regional center takes over that responsibility.

Why Retain a Team of EB-5 Professionals?

The EB-5 immigrant investor process is one process you shouldn’t attempt to do on your own. The success of the process is the sole determinant of your ability to become a permanent U.S. resident through the program. It is important to surround yourself with a competent team to provide you with guidance throughout the process. You will need a qualified immigration attorney, an experienced business plan drafter, and additional financial and legal advisors regardless of the type of investment you make.

The Role of the Business Plan Writer
Even if you have developed your own business model and have obtained all the needed documents to support your plan, an EB-5 business plan writer will take that one step further and turn your model into a detailed plan that complies with all of the USCIS regulations that govern the EB-5 program. Full compliance is necessary to ensure the success of the investment process and immigration.

EB-5 business plans must be “Matter of Ho” compliant. Matter of Ho refers to a decision in 1998 that established precedence for determining the standards of an EB-5 business plan. Your plan will be measured against this precedent, and your business plan writer will make sure that your plan is fully compliant with those standards. A business plan writer can also help you with your business model and other aspects of your plan, but if there isn’t enough documentation to back up your proposal, you may want to consider investing through a regional center to increase the likelihood of successful immigration.

Both direct investment business plans and regional center business plans require a business plan writer to prepare an EB-5 compliant business plan. An economic analysis for the EB-5 project or a job creation study may provide added benefits. For regional center projects, all direct, indirect, and induced jobs created as result of the project can be included to meet the job creation requirement. Many of these jobs come from construction. Certain construction costs, such as expenditures for materials, furnishings, etc., can be used to count jobs beyond direct employees. This provides a greater chance of petition approval, as it is easier to count estimated jobs based on expenditures than it is to provide documentation of ten full-time direct employees for each investor at the time of petition filing.

Other than construction-related jobs, the rest of the qualifying jobs usually will come from the operations of the project once it is completed. For example, staff employed by a hotel after it has been completed would be included in this category. Direct employees of the enterprise can be used for all types of projects, and regional center projects can also count indirect and induced jobs associated with the operations of the enterprise.

While direct jobs can be proven with documentation such as payroll stubs and W-2s, they can also be calculated (along with indirect and induced jobs) with the help of economic models. These models use revenues to estimate job creation, and thus it is easier to prove that job creation requirements have been met since you simply need to produce financial statements that have been audited to show that the desired revenues have been achieved. An experienced economist can aid in the use of economic models. If using an economic model, however, it is important to have realistic revenue goals that you are sure you will be able to achieve.

The Need for Offering Documents

Offering documents describe the terms of the investment in detail. Contrary to the common belief that offering documents are only required for large numbers of investors or substantial offering amounts (several million dollars or more), offering documents are required in most EB-5 investment situations. It also improves a project’s marketability and decreases securities liability.

According to U.S. securities laws, securities offerings must be registered with the U.S. Securities and Exchange Commission (SEC). All investments are considered securities unless they are in one of the exempted categories. Most EB-5 investments fall under the Regulation D exemption.

Even though most EB-5 investments are exempt from the required securities offerings registration, anti-fraud regulations still apply. These regulations provide protection to parties by placing legal responsibility on those who state incorrect information or omit material contents on offering documents or any point during the sale of securities. Both entities and any individuals involved with the issuer can be held accountable for misrepresentations regardless of the extent of the involvement. Thus, it is important to include accurate and complete information in offering documents.

Preparing offering documents for an EB-5 project requires due diligence on the part of the document preparer. Preparers should exercise caution to ensure that all material information that investors may need is included within the documents and is an accurate representation of the investment details. Not doing this can lead to fraud claims and offering rescission and may lead to fines imposed on the parties involved.

The SEC has become increasingly involved in overseeing EB-5 projects and investigating fraud and similar issues. The risk of liability due to violation of anti-fraud regulations is very real, and a securities attorney can help reduce the risk by making you aware of any applicable regulations and instruct you as to how to remain compliant.

While careful preparation of offering documents can be a time-consuming and costly process, the cost of facing fraud charges for omissions or misrepresentation is far greater for all key players involved with the issuer.

Before deciding on which type of EB-5 project to go with, investors should carefully consider the risks and benefits involved with each project. Attorneys and other professionals can be valuable consultants during this process, as well as keeping in mind the primary goal of the investment—to obtain a green card.

Risk is unavoidable in any business venture, but because of inherent risks in the immigration process, care should be taken to minimize the risks associated with the investment. Implementing your own direct EB=5 project can complicate the process and increase the risks you may face. If you choose to use a regional center model for your own project, be mindful of timeframes. A regional center must be approved before investors can begin filing their initial petitions.

In the end, it’s your decision as an investor, but it is important to keep in mind the many factors involved. You may get a higher return with a project you direct yourself, but that also comes with a greater risk to you and your ultimate goal of obtaining permanent resident status.

According to the US Department of State, FY 2016 saw nearly two times as many EB-5 immigrant investor visas being issued to Latin Americans as had been issued in FY 2015. This was a result of greater effort being put into encouraging Latin Americans to participate in the EB-5 Program in addition to the current economic and political chaos in that part of the world.

Most of the increase in successful EB-5 petition adjudication was due to immigrant investors in Brazil, who received four times as many visas in FY 2016 as they had the previous year. This was greater than the number received by investors in any other non-Asian country. In Venezuela, as well, the increase was substantial, as the amount doubled from FY 2015 to FY 2016. There were 412 EB-5 visas in total granted to Latin Americans in FY 2016 compared to the 207 the previous year.

Why Brazil and Venezuela?

The increase in EB-5 visas in Brazil and Venezuela appears to be due to the increase in crime that has resulted from the political and economic chaos in the region. Brazil has seen its share of government scandals since the middle of 2016, and its economy has dropped drastically, sending crime rates through the roof. In Venezuela, violent crime has also increased substantially and there has been an increase in conflict between the government and demonstrators. In addition, Venezuela’s economy has been experiencing rapid inflation.

In contrast to Brazil and Venezuela, Mexico has seen a dramatic decrease in EB-5 visas. This is expected to continue due to recent political events in the United States related to the 2016 election of President Trump.

Argentina and Columbia both saw an increase in EB-5 visas as well.

Shifting the Focus from China

While China has historically been the main focus of EB-5 visa promotion, in recent years, EB-5 promotors have turned to promoting the program in Latin America. As the Chinese government continues to implement strict regulations regarding foreign investments, a Latin American countries, specifically Brazil and Venezuela, are becoming the central focus of EB-5 marketing efforts. This change in focus has contributed in part to the increase in EB-5 visas being granted to Latin Americans.

Most of the promotion efforts have centered around making Latin Americans aware of the EB-5 program and the opportunities it offers. Promoters of the program have also put a substantial amount of effort into building relationships with immigrant attorneys, tax specialists, and financial consultants in Latin America, and it has not been without its rewards.

Latin America regulations have presented some challenges, however. Each country in the region has its own set of regulations, and research must be done by the players to make sure local regulations related to currency exchange, taxes, and investment fund origins are complied with.

Temporary Residents as Potential EB-5 Immigrants

Because of the difficulty in identifying and meeting the requirements of individual countries in Latin America, many EB-5 promoters have focused on Latin Americans who currently have temporary resident status in the United States. A large portion of Venezuelans and Brazilians who apply for EB-5 visas already have temporary resident status and are merely seeking to change over to permanent resident status. The political views of the current President have encouraged temporary residents to seek ways to become permanent residents for greater security, and the EB-5 program is a desirable option for those who have adequate funds.

Cultural Considerations

Cultural considerations must be taken into consideration when promoting the EB-5 program to Latin Americans, whether they are already temporary U.S. residents or still residing in their home countries. Real estate projects, in particular, are of great interest to Latin American immigrant investors, as they prefer projects that are small in scope and that involve physical construction that is observable to investors.

Latin Americans also prefer to invest through a regional center rather than directly in an EB-5 project. Their goal is successful immigration, not direct and extensive involvement in a new enterprise. There is little desire to start a long-term business. Since Latin Americans see the United States as a land of opportunity and a new life, EB-5 projects based in the United States are particularly appealing, especially in areas like Florida, Texas, California, and New York.

United States Citizenship and Immigration Services (USCIS) established the EB-5 Immigrant Investor Program in 1990 as a way for foreign nationals to legally immigrate to the United States with an eventual opportunity for citizenship by making a substantial investment that bolsters the U.S. economy. The investment must be made in an approved project that will create and maintain a minimum of 10 full-time jobs for U.S. workers per investor.

The EB-5 Program has gradually become more popular over the years since its establishment. Unfortunately, this has led to extensive delays in processing petitions, in some cases delaying the processing time two to three years. Not only are these delays a frustration for investors wishing to quickly complete their immigration, they have in some cases had a negative impact on the progress of EB-5 projects. Temporary funding, also known as “bridge” funding, is a permitted way to finance a project while waiting for EB-5 investment funds to become available for use and has been in use for the past five years. Bridge funding is beneficial to both project developers and investors, as it allows investors to get credit for jobs created as a result of replacing bridge financing with EB-5 investment funds and also allows for the continuation of a project while EB-5 funds are still pending due to delays in petition processing.

However, despite the popularity and success of this form of financing, USCIS has begun placing restrictions on the use of bridge financing. It has specifically stated that bridge financing cannot be used for longer than one year, must have been considered before the project actually begins, and must be fully mature before the estimated end date of project construction. If these requirements are not met, USCIS may deny approval for projects using bridge funding.

All things considered, it is important for investors to be wary of projects that intend to depend on bridge financing for lengthy period of time (several years). Investors should ensure that funding and project progress are planned in a way that ensures that the EB-5 funds are used to further project development when they are finally released into the project rather than just being used to reimbursebridge loans.

Performing due diligence is vital if investors wish to avoid common pitfalls related to EB-5 investments. EB-5 immigrant investors should keep apprised of changes in USCIS regulations regarding investment financing and specifically bridge financing to be aware of the possible impacts on potential EB-5 projects.