+1-800-997-1228
Questions & Answers

Why do EB-5 investments need to be made “at-risk”?

Why are EB-5 immigrants’ investments placed “at-risk”? Is there any possibility to gain returns on the investments? Are there other immigration routes that offer a higher rate of return of investments?

Answers

  • Avatar

    A Olusanjo Omoniyi

    Immigration Attorney
    Answered on

    Generally, in the marketplace, the investment at-risk simply means your investment may result in a loss, either partially or totally. In an EB-5 investment situation, this brief description applies as it means, as an investor, you may lose your money in the EB-5 project you invest in. While it is possible to earn some profit on your investment, the rule is this: there is no guarantee of profit and you may lose the money invested. Thus, plainly stated, you are investing at your own risk. There is hardly any immigration investment program out there that is not an investment at-risk venture. Advisably, consult an immigration attorney on this issue before you proceed further.

  • Avatar

    Shannon M Shepherd

    Immigration Attorney
    Answered on

    The phrase “at-risk” means the EB-5 investor must have placed his money in the enterprise without any caveats to his or her immigration status. For example, you cannot invest the money in an escrow subject to visa approval. It must be a real, at-risk investment just like any other. This does not mean you cannot gain returns on it. If you make money from your investment, that is great! If you also meet the requirements for job creation and so on, you can certainly earn a return on your investment as well.

  • Avatar

    Julia Roussinova

    Immigration Attorney
    Answered on

    EB-5 program is a job creation program rather than an investment program. When one invests capital in any business enterprise, he or she generally bears the risk of it failing or succeeding in the ordinary course of business. You may generate returns on your capital investment if you choose to invest directly in a new commercial enterprise in the U.S. under the regular EB-5 program. You will generate some returns on your capital investment if you choose to invest in a USCIS-approved regional center project under the EB-5 pilot program, but these returns will not be significant. The focus of the EB-5 program is to obtain a permanent residence in the U.S. by investing lawfully obtained capital in the U.S. economy.

  • Avatar

    Barbara Suri

    Immigration Attorney
    Answered on

    EB-5 investments need to be at-risk, not only because it is immigration law but, in my opinion, it shows that one is serious about the investment. The matter of returns on your investment is not an immigration question and should be directed to the entity that seeks your investment. Immigration is concerned with the process of qualifying persons for immigration benefits under the law.

  • Avatar

    BoBi Ahn

    Immigration Attorney
    Answered on

    The at-risk requirement exists to ensure the investment is an actual/real-world investment and not a guaranteed loan or personal transaction where the initial capital invested will not actually create a business or employment but just a vehicle for the investor to get a green card without an actual investment in a commercial enterprise.

  • Avatar

    Charles Foster

    Immigration Attorney
    Answered on

    EB-5 investments must be at-risk according to both the statutory provision and the interpretation that an investment inherently must be at-risk. Therefore, if the regional center or developer would make a guarantee, the USCIS would deny the petition because the petition is not at-risk. Most individuals who go through the EB-5 program, particularly through an EB-5 regional center, do so to obtain Lawful Permanent Residency status (or so-called green card). There may be higher rates of return if the individual makes a direct investment, but there are also higher degrees of risk. There may be a few regional center projects that pay more than a nominal return on the investment.

  • Avatar

    Jinhee Wilde

    Immigration Attorney
    Answered on

    Any investment, whether stock purchase or real estate development, is inherently at-risk. There is no guarantee in life and certainly no guarantee that your investment will make money. Thus, USCIS wants the EB-5 investment to be the same, transparent investment with no guarantee. However, being at-risk does not mean you cannot get any return on your investment; it just cannot be guaranteed. If your goal is to get a return your investment, EB-5 is not right for you. It has been shown by many failed EB-5 projects and regional centers offering an extraordinary rate of return is a red flag for fraud and misrepresentation. As the axiom goes: when something sounds too good to true, it usually is. However, working with an independent, experienced EB-5 investment broker to help you with due diligence in choosing a right investment vehicle for you will help in optimizing your specific goals.

  • Avatar

    Bernard P Wolfsdorf

    Immigration Attorney
    Answered on

    The EB-5 program emerged out of the E-2 treaty investor program and, for both, it is believed that if you put money in a CD or buy a piece of land, that investment does not create jobs. Only the placing of capital-at-risk in a business creates jobs. Think of this as a job program, not an investment program. You can do EB-5 direct and manage the business yourself but, really, with 10 full-time employees, you may soon see yourself with $2-3 million in wages.

Add your comment

Use a Facebook account to add a comment, subject to Facebook's Terms of Service and Privacy Policy. Your Facebook name, photo & other personal information you make public on Facebook will appear with your comment.