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How can I monitor my funds invested in an EB-5 project?

Once I select an EB-5 regional center project, how can I confirm the actual construction of the project? Will I be able to to monitor how my investment funds are being used?

Answers

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    Salvatore Picataggio

    Immigration Attorney
    Answered on

    A good project and regional center should offer reports on the uses of funds. If this information is not being provided, be careful.

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    Peter Zhang

    Immigration Attorney
    Answered on

    The regional center should be able to provide you with a record of their annual filing.

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    Charles Foster

    Immigration Attorney
    Answered on

    The best thing to do is make sure you invest in an EB-5 project in which you have confidence, both in the project and the management team. As an EB-5 investor you will be a limited partner and you will not have any managerial rights. In terms of the information that will be provided to you, that will depend upon the details of the offering itself, but typically there is no effective way that you can monitor the project on a day to day basis.

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    Robert V Cornish Jr

    Securities Attorney
    Answered on

    Your question is timely, as issues as to the transparency of EB-5 investments is an issue being raised in pending legislation and has been expressed by some industry participants as important to preserve the integrity of the program. While you can certainly look at how a project is actually going, that will not necessarily tell you how your money is being spent and whether everything is on track. When looking for an EB-5 investment, it is crucial that the EB-5 funding vehicle in which you are invested use at least an independent administrator to handle funds, as well as an experienced general construction contractor with the mechanisms in place to monitor vendors, work progress and the like. More importantly, you should ask if the EB-5 product is audited by an independent accountant in some manner. These questions, along with others, should be posed to a broker/dealer working on your behalf, as well as a securities attorney you can retain to assist in your efforts to review offering documents and the like.

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    Phuong Le

    Immigration Attorney
    Answered on

    There are various ways you can monitor the status of a project, but typically there should be a third party construction manager assigned to the project to monitor and approve funding disbursements/draws for the project's construction. This is usually required by most senior lenders (who will assign a third party to monitor the disbursement of all funds for the project) and sometimes regional centers will hire their own third party fund managers to monitor and track the use of funds in the project as well (useful for I-829/job creation purposes). Regardless, as a best practice, projects should be sending investors updates on the project's construction and progress for the reasons you mentioned. It would be a good idea to reach out to the manager of the NCE, regional center, or the project if you have not received any updates on the project.

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    Lynne Feldman

    Immigration Attorney
    Answered on

    The project should be giving you regular reports; if not, request this from them and make sure that will happen when you invest.

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    Julia Roussinova

    Immigration Attorney
    Answered on

    Generally, if you invest through a USCIS designated regional center, you should have full ability to monitor the activity of the project and may visit the project before you invest.

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    Bernard P Wolfsdorf

    Immigration Attorney
    Answered on

    This really depends on the regional center and the project. Some are magnificent and regularly report on every stage. Some have cameras on construction sites so you can see it being built. Others, not so much. So you need to do due diligence on this very important issue. Most likely you need a project with a good track record who is not learning how to do this. Finally, HR 5992 seeks to force all to do this and I do think these integrity measures will be enacted.

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    Vaughan de Kirby

    Immigration Attorney
    Answered on

    This is something you should discuss with your investment immigration attorney and broker dealer. Generally, you will receive updates from the regional center either quarterly or annually. If you have a broker dealer, they will assist you in project review and updates.

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    BoBi Ahn

    Immigration Attorney
    Answered on

    You as the investor, irrespective of whether you are processing for your EB-5 petition, have all the right to receive updates on the project development, progress, compliance, etc. Since your investment is through the regional center-managed project, you would be able to obtain the project progress info from the regional center that is responsible for overseeing the project.

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