This is one of the most frequently asked questions I receive from investors.
The EB-5 visa program allows a foreign national and her or his immediate family to get green cards by investing $1 million ($500,000 in high unemployment or rural areas) in a regional center that creates at least 10 jobs. A regional center is a business approved by the U.S. Citizenship and Immigration Services (USCIS) to stimulate the U.S. economy through foreign investment.
When considering a regional center, immigrant investors should look for:
A Strong Plan and Team
Look closely at the regional center’s business plan and project team before taking the plunge.
A project team’s previous EB-5 success doesn’t guarantee future success. But it may mean investors will experience shorter USCIS processing times for immigration and green card petitions. A project that has or will submit a draft plan to USCIS for pre-approval may also experience shorter times.
Since getting a green card hinges on job creation, a plan to create more than 10 direct and indirect jobs per investor improves the chances that at least the minimum requirement will be met.
Look for a team that has its own money invested in the project or has government support through bonds, tax credits, or other public financing. Both are strong indicators of a project’s stability.
Keep in mind that investments must be fully “at risk” with no guaranteed return to comply with the EB-5 program.
Escrow or Refunds
Look for a regional center that will put an investor’s funds in escrow until the immigration petition is approved. If that’s not an option, find out whether the principal investment and administrative fee is refunded if the immigration petition is denied. Most regional centers charge an administrative fee of $40,000 to $60,000.
Look for a project team willing to provide access to information, including real-time access to the operating books. Investors should monitor the progress of job creation, the overall project, as well as compliance with U.S. laws and the EB-5 program.
An Easy Exit
The return on EB-5 investments is often low. Given that, investors should look for an easy and timely exit.
Find out whether investors will be first in line—or at least second—to get their capital returned once green cards are approved. And find out how funds will be returned, which may indicate how quickly that will happen. A project that distributes funds as equity usually does so when the project is sold at a profit. A project that ends when the developer repays a five- to seven-year loan to the regional center usually means funds will be returned after that repayment.