The EB-5 Immigrant Investor Program is one of the fastest and easiest ways for foreign nationals to secure a life in the United States and enjoy all the benefits that come with it. Every year, investors from around the world apply to the EB-5 program for a better future in the prosperous United States. Despite the relative ease, however, the EB-5 program remains a complicated process with numerous factors to consider. Here are three key aspects prospective EB-5 investors should reflect on at the beginning of their journey.
1. How Much Risk Are You Willing to Take On?
All EB-5 investments must remain at risk throughout the investment period, as stipulated by EB-5 requirements. However, the degree of risk is not specified, so investors are free to decide how much risk they are willing to bear.
Most EB-5 investors are primarily concerned with immigration, not financial returns—many are happy to earn only a small return on investment (ROI) to gain a U.S. green card. Thus, it’s vital for investors to conduct careful due diligence on prospective EB-5 projects to ensure minimal immigration risk. If ROI is important to them, they can also take steps to seek projects with lower financial risk.
Depending on their managerial capabilities, some investors may feel more inclined to invest directly in an EB-5 project because it gives them more control over their EB-5 capital. Direct EB-5 investors must partake in the day-to-day management of the project, meaning their managerial skills can influence their ROI.
EB-5 investors who are less experienced in management or who simply wish to spend their time on other matters may prefer to invest through a regional center. While these investors lose direct control over their funds, they enjoy numerous other benefits, such as loosened job creation requirements. In regional center investments, the regional center managers are responsible for the investors’ ROI, but reputable regional center leaders are seasoned professionals in financial management.
For investors who choose the regional center route, due diligence to select a high-quality regional center is also crucial. Regional center terminations have been a trend in FY2019 and FY2020, with an astounding 44 regional centers losing their regional center status between March and May 2020. Without proper due diligence, EB-5 investors may risk their chances at U.S. immigration by working with a low-quality regional center.
2. What Are the Best Funds to Use for the EB-5 Program?
One key EB-5 requirement is that all investors document the lawful sources of their EB-5 capital in their I-526 petition. Investors can dramatically simplify their I-526 petition by selecting fund sources that are easier to document, saving time and stress and possibly even speeding up their processing time. EB-5 investors should work with their immigration attorney to determine the best funds to use in their situation.
3. What Additional Fees Might You Incur?
The minimum required investment amount for the EB-5 program is $1.8 million or $900,000, depending on whether the project is located in a targeted employment area (TEA). However, EB-5 investors inevitably face more fees related to their participation in the program. Below are a few examples of fees EB-5 investors should consider:
- EB-5 immigration attorney fees
- Filing fees for the I-526 and I-829 petitions (and I-485, if applying from within the United States)
- Regional center administrative fees, if investing through a regional center
- Travel and moving fees to relocate to the United States
- U.S. taxes, depending on when in the year the investor relocates to the United States
It’s also helpful for investors to consider potential financial benefits of living in the United States. If they or their unmarried children younger than 21 wishes to attend college in the United States, they may be eligible for in-state tuition benefits. They can also save on travel expenses to visit family or conduct business in the United States.
