What kind of projects qualify as EB-5 projects and what should I think about when selecting one?

Any project that creates the requisite jobs and is a new commercial enterprise with the proper use of the investment and operation will qualify. EB-5 projects are not restricted to construction based projects. You should do a thorough vetting process of the projects before investing such as performance record (i.e. if prior I-526s have been filed what the approval record is), their financing structure, job creation method/detail and the exit strategy.

EB-5 projects can involve other business activities besides construction. You should choose a project that is compliant with the EB-5 immigration regulations; a business that is financially viable, that will continue to exist for several years and will create the required jobs.

There are various projects that can be used for EB-5. As an investor, you have options to decide what type of project you want to participate. If you are working with a regional center (RC), there may be projects in construction phase or those that have been completed. Advisably, consult an EB-5 attorney and, in the process, consider doing due diligence on each project before making a decision.

EB-5 projects are broad in scope and can include anything from real estate developments, construction, to software projects, stores, or the like. You must do your due diligence on any project.

The safest way to select an EB-5 project is to work through a Registered Broker-Dealer that is a member of FINRA and SIPC. This is the only way generally you can be assured that independent due diligence has been done on the project you may select. Your investment immigration attorney should be able to help you identify a registered broker-dealer.

Usually, regional center projects are construction-based. However, there are a few projects like franchise stores or wineries (agricultural projects) etc. Construction projects are popular because of ease of direct job creation and the value of the collateral. In choosing a project, you should consider the following things: First, the regional center'
s track record of approval of conditional green cards, removal of conditions and return of capital. Second, the reasons for denial, if any. Third, the amount of capital returned to investors by the regional center. Fourth, the exit strategy of the project (that is, how the funds will be returned), as well as the refinance, the sale of project or performance of the project. Fifth, job creation possibilities, including the number of direct and indirect jobs, and whether or not there is a buffer in job creation. Sixth, the collateral for the EB-5 investment. Seventh, the value of the collateral (i.e., is it a depreciating collateral like machinery, equipment or vehicles?). Eighth, the lien of EB-5 investors on the assets of the project as a collateral to their investment. Tenth, the developer's track record. Finally, you must ask, if there is a senior lender, has the developer managed to secure the senior lender?