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What happens to my original investment once an EB-5 project is completed?

I understand that the funds I invest for an EB-5 visa are not guaranteed as refundable. However, on average, how long would it take for my investment to be returned? Can I expect to receive any returns on my original investment? If a successfully completed project did not return my capital, would I be able to do anything about it?

Answers

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    Ed Beshara

    Immigration Attorney
    Answered on

    In a regional center loan model, the investor''s funds are invested into a new commercial enterprise. The investment funds are then loaned to the job creating entity for a set period of time. At the end of the loan period, the loan amounts will be returned to the new commercial enterprise and if not paid, then the client investor can go after the collateral assets.

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    Jinhee Wilde

    Immigration Attorney
    Answered on

    Whether you get your original investment returned after you get your I-829 approved depends on how the investment is structured. If you made an equity investment into a project or business, then you may not be able to get your investment returned until you could sell your equity interest to another investor who wants to take over that equity - that is if you are allowed to sell your equity interest at all. If you are a member of a limited partnership that has an equity stake in a project, then you may not be allowed to sell unless all the limited partners agree, as well as the general partner who is willing to represent the entire partnership is willing to sell the entire partnership share, which may not be the case, depending on who the general partner is and what his role may be in addition to being the general partner of your particular partnership. Thus, you need to understand how your investment and partnership is structured as part of your due diligence.

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    BoBi Ahn

    Immigration Attorney
    Answered on

    Much of whether you can expect to get a return on your original investment will depend on the conditions outlined in your contract with the EB-5 regional center you are investing in (if the investment is made through an regional center) or the agreement made with the commercial enterprise/company that you directly invested the money with. An essential element for a proper EB-5 investment is one that is "at risk." See 8 C.F.R. 204.6(j)(2)). Every project or regional center will have its own set of conditions and guarantees, set forth in the agreement prior to the commitment of funds, so it is necessary to review these terms and to negotiate accordingly prior to commitment. The rules of the contract will also apply to whether one has any course of action in cases where a "successfully completed project" does not return earnings.

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    Salvatore Picataggio

    Immigration Attorney
    Answered on

    The offering documentation for the investment should have clearly described the returns on investment that you would be able to expect and your priority in obtaining your funds in the event of default. A careful review of those with an investment adviser or accountant may be helpful. Immigration-wise, you can receive returns ON your investment, but not return OF your investment. You can also sell your interest at fair market value when you complete your immigration process.

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    Lynne Feldman

    Immigration Attorney
    Answered on

    You need to question the projects you are considering investing in to find out what their exit strategy is.

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    Julia Roussinova

    Immigration Attorney
    Answered on

    This depends on the terms of the offering documents of your project in which you have invested. If you have invested through a regional center project, you would generally have a limited partnership agreement and private placement memorandum that would outline the investment terms, return on investment terms, risks of investment, applicable exit terms. In a direct investment model, you would generally have an entity operating agreement, probably private placement memorandum that would contain similar terms. If you are only contemplating an investment, please consult an experienced EB-5 immigration attorney before you invest and ensure you do due diligence of an investment project. If you have already invested, please consult your attorney for further advice.

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    Fredrick W Voigtmann

    Immigration Attorney
    Answered on

    The use of your EB-5 capital, and the terms and conditions of your investment with the EB-5 project are determined by the agreements you signed with the project. Typical agreements and documents containing this type of information would include the offering memorandum, PPM, subscription agreement, operating agreement, limited partnership agreement, and business plan. Depending upon the structure of the investment and the use of the funds (one example would be an equity investment into the new commercial enterprise (NCE), then the NCE participates in an equity or loan model structure for the investment). You should have a business attorney and immigration attorney review these documents with you so that you fully understand your rights and obligations. Ideally, this should be done BEFORE you make the decision whether or not to invest.

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    A Olusanjo Omoniyi

    Immigration Attorney
    Answered on

    It is a fact that an EB-5 investment is not guaranteed and also, generally an EB-5 investment is considered to be an at risk venture. However, with the regards to how long your investment will remain in the project before it is returned, the best advice is that you should look at the terms of your investment agreement. The agreement would have described how long your investment fund would remain in the project. It is possible to receive returns on your original investment, but that depends on how well the project you invested is doing and a host of other reasons. If for no reason your project does not return your capital, particularly if it is as a result of the failure of the project, in essence where virtually your co-investors lost their investments, you too are likely to lose your investment. Lastly, in cases where the project fails and investments are lost, you will need to look at the terms of your agreement for any possible remedies that may be available to you. Seek the counseling of an attorney on this issue before you proceed any further.

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    Mahsa Aliaskari

    Immigration Attorney
    Answered on

    Return of funds is dependent on the terms of the loan; this should be described in the offering memorandum.

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