The EB-5 program allows foreign entrepreneurs to invest in job-creating enterprises in exchange for permanent residency in the United States. Getting a green card for you and your family through the EB-5 program relies on selecting the right EB-5 project. As well as qualifying for green cards, an investor’s other goal is to get their investment refunded in full with some interest.
Finding the right project these needs doesn’t have to be difficult, but it will require you to put time into due diligence. Remember that you can use a set up EB5 center to help you.
- Team reputation. Look at the reputations of the project and the regional center’s team. Does the developer of the project have years of experience in similar projects? Does the regional center have experience with these kinds of projects? Were those projects completed on time and on budget? A team with experience will be better able to overcome any challenges that come up during large-scale developments.
- TEA status. A targeted employment area or TEA is a rural area or a place with high levels of unemployment. EB-5 projects that are located in TEA qualify for a reduced amount of investment, which is good for you as an investor. You will need to prove that your project is located in a TEA by having a regional center submit data and letters of approval.
- Job creation methodology. How does the regional center count job creation? Are they making use of direct, indirect, and induced job creation? Find out if the project has a job creation buffer so that there’s no question that each EB-5 investor will be properly credited with the required ten jobs they must create in order to qualify for the I-829 petition.
- USCIS approval. Find out if the EB-5 regional center you’re using has pre-approval with the USCIC. Check that it is designated by UCSIC. This can speed up the approval process and make the investment much simpler.
- Capital structure. Find out where the different sources of funding come from. Does the project have a senior loan? Does the project make use of bridge loans? What amount of the funding comes from EB-5 capital? Does the project exceed the recommended 30%? Find out how much funding comes from project developer capital and other loans.
- At-risk investment. The capital of an EB-5 investor must remain at risk. There can be no guarantees that an investor will get back their investment. If a project developer promises that your money will be returned, UCSIS might deny your petition. You must consult with an EB-5 immigration attorney before you invest in a project to talk about the level of risk that you are comfortable with.
- Exit-strategy. A project must be at-risk, and there can’t be any guaranteed returns on your investment, but an investor must still carefully scrutinize the exit strategy of the project. Under some circumstances, capital may be returned to the investor. You should go over the exit clauses with an experienced attorney.
