UPDATED BY DILLON COLUCCI ON JANUARY 28, 2020
Because the investment required by the EB-5 program is sizable, it is important that EB-5 investors understand all components of the EB-5 process. Choosing the right EB-5 project is particularly important if the EB-5 investor is to be successful.
EB-5 projects are most often sponsored by regional centers (Click here to browse a list of USCIS designated regional centers). Even though EB-5 investors can form their own new commercial enterprises, approximately 90 to 95 percent of all EB-5 visa applicants invest in a company that is sponsored by a regional center. EB-5 investors must direct their required capital investment to a specific commercial enterprise which is funding a specific investment project (an EB-5 Project). EB-5 investments must be made in an EB-5 project that is considered to be a new commercial enterprise and that will lead to the creation of 10 fulltime jobs for U.S. workers.
New commercial enterprises are defined as lawful, for profit businesses that were created after November 29, 1990. Older enterprises may qualify if the EB-5 investment leads to significant business restructuring or increases the number of employees or net worth of an existing business by 40 percent. The enterprises can be structured in any number of ways, such as a sole proprietorship, limited or general partnership, corporation, business trust, or as other publicly or privately owned business structures.
Types of EB-5 Projects
EB-5 projects assume many different business models and operate within many different industries. Types of EB-5 projects include:
- Mixed use retail
- Sports stadiums
- Agricultural developments, including wineries and farms
- Electric vehicles
- Biotech and medical technologies
- Entertainment venues
- Convention centers
- Office buildings
How to Choose an EB-5 Project
Choosing an EB-5 Regional Center and project to invest in can be daunting. Yet, choosing a regional center and EB-5 project that meets the required legal criteria and is viable as a business is perhaps the most important step of the EB-5 process, since the investor’s permanent residency is dependent on the ability of the project to create jobs and adhere to the required legal criteria. Investors may initially be interested in a particular project because they are familiar with the industry or project location. However, there are certain due diligence questions that EB-5 visa applicants should ask before deciding on where to invest. Some good starting questions include:
- How many EB-5 investors have already committed to the project?
- How are jobs created? How are they allocated amongst investors?
- Where are other EB-5 investors in the visa application process?
- Is the project’s business plan compliant with Matter of Ho?
- What risks are associated with the project?
- What is the exit strategy from the project upon receipt of permanent residency?
- What are the projected returns on the investment?
- Will non EB-5 funds be used on the project? Where will this funding originate? Has this funding been secured?
- Will the investment and related fees be refunded if the I-526 petition is denied?
- What are the credentials of the project’s principal(s)?
- What EB-5 experience do the regional center’s immigration and securities counsel have?
- What is the screening process for potential investors?
- Have the regional center or project principals ever been involved in a lawsuit or bankruptcy?
- What economic or econometric models are used to forecast that the required number of jobs will be created?
- Does the project qualify for the investment requirement? If yes, how so?
No one should pressure you into a particular regional center project. Make sure you do your own homework prior to making your EB-5 investment. Moreover, you may contact EB5Investors.com for a cost-free assessment of your eligibility to participate in the EB-5 program, for general immigration purposes.