This is an investment where all the capital invested is at risk of being lost. The EB-5 rules require this so that there is a genuine business concern that will in kind create jobs. This is why you cannot purchase a residential home as your EB-5 investment.
What is an “at risk” direct investment? Why is this sort of investment required?
EB-5 regulations require that all invested capital be ?at risk?. Therefore, no investment return can be guaranteed ? that is, without risk ? if it is to qualify as an EB-5 investment. ?At risk? generally means subject to normal business and financial risk. Other risks include the enterprise?s failure to meet the direct or indirect job creation requirement, or indeed a failure of the business. However, this does not mean that there can be no expectation of a return. As with any other (non-EB-5 investment) the investor should be prudent in making enquiries about the investment and, where necessary, should take advice from qualified investment advisers.