Many foreign nationals view the EB-5 investment program as the safest and most reliable way to move to the United States with their families. Indeed, the visa-by-investment approach taken by the EB-5 program has benefitted the country’s economy, created jobs, and helped thousands of foreign nationals to relocate to the United States.
However, the EB-5 industry can be difficult to navigate. The regulations on the EB-5 program set out by United States Citizenship and Immigration Services (USCIS) are numerous and complex. Therefore, it is essential for EB-5 investors to work with immigration counsel in every step of the process; if an EB-5 investment fails to comply with all USCIS regulations, the investor will become ineligible for permanent resident status.
Investors must also keep in mind that the minimum EB-5 investment amounts are substantial: targeted employment area (TEA) projects require a minimum investment of $500,000, and the investment threshold for non-TEA projects is $1,000,000. Moreover, one of the key requirements for EB-5 investment capital is that it must remain at risk; all EB-5 investors must be able to experience either loss or gain, and there can be no guarantees that their funding will be returned. Foreign nationals who would like to make an EB-5 investment must consider the following factors when evaluating potential projects.
Evaluate Projects Thoroughly to Avoid Fraud
Unfortunately, EB-5 business owners have occasionally committed fraud and misused EB-5 capital. Before subscribing to a project, potential EB-5 investors should do research on the experience and legal standing of the project’s owners and managers, especially those in charge of overseeing the EB-5 investment funds. Making an in-person or virtual site visit is highly recommended, and transparent EB-5 projects will gladly allow investors to tour the project site. Foreign nationals should also gather third-party information on the EB-5 project and the parties involved.
Reducing Immigration Risk
Many EB-5 investors are more concerned with obtaining U.S. permanent resident status than gaining significant profits from their investments. Therefore, it is crucial to evaluate an EB-5 project’s immigration risk—that is, its chances of being completed successfully and complying with all USCIS requirements, such as creating 10 jobs per investor.
One of the most relevant factors that determine a project’s immigration risk is whether it will be completed if the expected amount of EB-5 funding is not raised. The most trustworthy EB-5 projects will have an alternative source of funding available in the case of a shortfall of EB-5 capital. This way, it will be much more likely for the project to be completed successfully.
It is also indispensable to evaluate an EB-5 project’s potential for job creation. Projects that plan on generating far more than 10 jobs per investor and thus offer ample job cushions are the safest options. In fact, foreign nationals may even be able to invest in projects that have already created the necessary number of jobs. For instance, a real estate development project may create all the necessary jobs for its investors before construction is complete. Potential EB-5 investors should look for safe opportunities like these.
Interested foreign nationals must also look at the more minute details of a project’s offering. For instance, job creation must be timed carefully. If all 10 jobs have not been created by the time USCIS adjudicates Form I-829, an EB-5 investor will be unlikely to receive permanent resident status. In addition, projects with USCIS exemplar status or an approved I-526 petition have already shown compliance with all of the agency’s standards.
Making an EB5 investment requires diligent planning and professional consultation, but numerous foreign nationals have successfully relocated to the United States and even obtained citizenship through the program. Potential investors should contact EB5AN to receive personalized guidance on how to begin the EB-5 process and find trustworthy projects.