The EB-5 Immigrant Investor Program is one of the fastest and easiest ways foreign nationals can immigrate to the United States, provided they have the necessary investment funds. An investment must satisfy several EB-5 criteria before the investor can receive a U.S. green card, so prospective investors are urged to conduct meticulous due diligence when selecting an EB-5 project for investment.
EB-5 investors must carefully assess any prospective EB-5 project to ensure low financial and immigration risk, which necessitates wide-ranging due diligence that examines various aspects of the project and its developer. Here are some of the top things EB-5 investors should consider when selecting a project.
Immigration Track Record of the Developer and Regional Center
EB-5 investors can fall victim to inexperienced, unprepared, and sloppy project developers or regional centers as well as outright malicious and fraudulent ones. To ensure the project developers and regional centers they work with are reputable, EB-5 investors should determine how much experience the entities have and what their track records are. Investors should identify whether they are well known in the EB-5 industry and check how many of their previous I-526 and I-829 petitions have been approved or denied.
Financial Track Record of the Developer and Regional Center
While most EB-5 project developers and regional centers are trustworthy, EB-5 investors should be aware of the ever-present threat of fraud. To avoid being duped out of their hard-earned capital and a chance at life in the United States, investors should look at whether the project developer and regional center have returned capital to investors in previous projects. It’s also important to note how many earlier projects the developer and regional center were successfully completed.
Projected Number of Jobs
To fulfill the EB-5 program requirements and receive permanent resident status, an EB-5 investor must demonstrate that their investment has funded the creation of at least 10 new full-time jobs in the United States. Therefore, investors are urged to investigate a project’s job creation methodology and hiring schedule, as well as how many jobs have already been created. An ideal EB-5 project has a job buffer—more jobs than necessary for all the EB-5 investors in the project.
Project Funding
An EB-5 investor’s investment will be for naught if the project cannot secure enough other funding and cannot move forward with its plans. EB-5 investors should carefully examine a prospective project’s additional funding sources, including bridge loans and other equity sources, to make sure the developer can complete the project even if they do not receive the desired amount of EB-5 capital from other investors.
Earnings Potential
A high return on investment is not necessary for every EB-5 investor—many investors are primarily concerned with immigration and wish simply not to lose money on the investment. Investors should first clearly identify their financial goals and then examine the potential of the investment accordingly. For many EB-5 investors, accepting a lower return on investment in exchange for lower immigration risk is worth it.
Transparency and Trustworthiness
EB-5 investors should avoid any project developer or regional center who is not transparent about its financials or anything else that concerns investors. Investors should look for developers and regional centers that communicate frequently with investors and charge honest administrative fees. EB-5 investors should work with their immigration attorneys to determine whether developers and regional centers are presenting the necessary information and documentation for the investors to be successful.
