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What is the best option for earning a return on an EB-5 investment?

Our family is considering the EB-5 program not only for green cards, but also to earn a stable return from our investment. We are considering different options, from investing in regional center projects, to buying an existing business, or to investing U.S. municipal bonds. Which investment option would most likely fulfill our objectives?

Answers

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    Fredrick W Voigtmann

    Immigration Attorney
    Answered on

    Most of the EB-5 projects, which are regional center projects, are not designed for a stable return on investment. Your ROI is your green card and the possibility of getting your principal back in five years or so. If your main goal is to make a profit, then EB-5 is not for you. Also, buying existing businesses (unless you expand and add new jobs) and investing in bonds will not qualify for EB-5 or any other immigrant category.

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    John J Downey

    Immigration Attorney
    Answered on

    You are really talking apples and oranges. The primary goal of the EB-5 visa is permanent residency; many investors consider a financial return as negligible. You really need to be more specific as to the amount you have to invest, timeline of expected returns, etc.

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    Julia Roussinova

    Immigration Attorney
    Answered on

    The EB-5 program is not intended to provide for high return on investment. It is primarily intended to obtain lawful permanent residence in the United States through investment into the U.S. economy - either directly in a new or existing business you may acquire and create (or preserve under certain circumstances) at least 10 full-time jobs per an EB-5 investor, or through an approved regional center project in the United States which would create the required jobs for you. You may not invest in U.S. bonds for EB-5 program purposes, but rather in a new for-profit commercial enterprise compliant with EB-5 program requirements. Most regional center investments offer 1% ROI on average. If you invest directly in a business you acquire, then the operating documents will control the terms for participation in profits and losses for the business, etc. You should consult an experienced immigration and business counsel to inquire further.

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    Jinhee Wilde

    Immigration Attorney
    Answered on

    If you are interested in high earnings from your investment enough to live on, then EB-5 is not the right investment vehicle for you. Without appearing to give you investment advice, I will tell you that most of the safe EB-5 programs with great track records only pay about 1% interest like most of the banks will do, which means on a $500,000 investment, you will be earning approximately $5000 per year. You need to be aware of any EB-5 projects that promise a high rate of interest income, as any guaranteed income will be seen as contrary to having the EB-5 investment "at risk" by the USCIS, which will get your application denied. Further, when something sounds too good to be true, it probably is, as many investors found out the hard way in several fraudulent projects, such as the Chicago Convention Center and the Kansas Ethanol plant projects.

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    Lynne Feldman

    Immigration Attorney
    Answered on

    Complicated question. Immigration safety is one issue and return on investment is another. You may want to seek professional investment advice to analyze the alternatives you are considering with respect to the latter issue.

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    Robert Cornish

    Securities Attorney
    Answered on

    If you are considering this sort of range of investment options, it would likely be a good idea to work with experienced professionals who coordinate their efforts in tandem on your behalf. A multi-family office here in the United States or overseas can coordinate legal and financial professionals for you to perform due diligence on investments, in particular those that you are considering in the EB-5 space. You may very well wish to diversify your investments through reasonable efforts to hedge risks in an EB-5 investment. But this is something that should not be undertaken on a whim, but instead through a complete understanding of the risks of the EB-5 investment you are considering and then planning accordingly to manage the risks. Whatever you choose to do, do not work alone in screening investments or making asset allocation decisions.

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    Ian E Scott

    Immigration Attorney
    Answered on

    If a return from the EB-5 investment is your goal, then starting your own business is a good option. The return for most regional centers is negative after the administrative fee and the United States does not permit investments in bonds as an option.

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    Salvatore Picataggio

    Immigration Attorney
    Answered on

    First, only investing in a New Commercial Enterprise that complies with the EB-5 program regulations will allow you to pursue immigration goals, so the bonds can be removed from your list. Second, with a direct EB-5/non-regional center investment, usually one where you are investing into a business you own and operate, you can control the return on your investment and, as the owner, you can participate in the profits, earnings, etc. With a regional center investment, most are structured to focus on compliance and obtaining green cards, not to offer a large return on the investment. Please consult with an EB-5 attorney to assist you with this decision and pursing a process.

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