Who conducts the EB-5 due diligence report?

Typically, an investor should conduct due diligence or at least take the lead with the help of an immigration attorney who may have to engage other professionals. Regarding due diligence, the regional center has a dual role: to provide accurate information on both the management of the investment funds and the project and, secondly, to provide information that will forestall any fraud on both the funds and project. The investigation conducted by the investor and its attorney should result in the investor being satisfied that the integrity of all the parties. The investor must be satisfied with how the project and its associated investment funds are being managed, financed, planned, constructed and operated just to be sure it complies with the EB-5 program. All these undertakings are enormous. As a result, it is advisable that an investor and its attorney should conduct rigorous due diligence before committing to a regional center and its project. Thanks.

USCIS does not require a due diligence report to be included in the I-526 petition. It is the investor''s personal preference if he/she wants to conduct a due diligence investigation to see the viability of a project. Some regional centers provide a due diligence document for the investor''s reference. However, due to the conflict of interest, the due diligence report provided by the regional center may not be unbiased. Hence, prudent investors are suggested to conduct a due diligence investigation at their own cost.

USCIS does not require a due diligence report, but it is a good idea for any investor considering an EB-5 investment. There are independent companies with financial advisors and other business experts who can provide a due diligence report for a fee. An investor should be careful in relying on any report that is prepared by or paid for by the regional center. Doing due diligence on yourself does not provide any independent analysis and conclusions.

In terms of the party performing due diligence when you file your EB-5 petition on Form I-526, USCIS simply reviews your petition to make sure it complies with the legal requirements for the EB-5 program in terms of dollar amounts, source of funds, job creation and if the investment is at the $500,000 level, whether the investment enterprise is located in a Targeted Economic Area (TEA). The USCIS does not do due diligence with respect to whether or not you are making a sound investment. As the prospective investor, you should perform your own due diligence with the assistance of experienced legal counsel and/or a registered investment advisor who specializes in EB-5 regional center projects.

EB-5 due diligence is usually performed by a number of professionals. Unless your EB-5 lawyer is a registered investment advisor, they should not be giving investment advice. However, the lawyer can certainly evaluate the project from an immigration standpoint. Investors may wish to retain an investment advisor if they would like an independent set of eyes for the project documents.

Due diligence on the project is usually done by a registered investment advisor; the immigration lawyer can advise on immigration risk matters.

Like any investment, whether for EB-5 purposes or otherwise, the investor should thoroughly investigate the project/enterprise that he/she will be putting his money in, which may include but is not limited to: 1. Verifying that the regional center has been approved for/designated as a regional center by USCIS; 2. Regional center''s track record of successful filing and approval of I-526 and I-829 petitions; 3. How long has the regional center been operational and how many projects has it sponsored? 4. Always check to see the past performances and the reputation of the project developer associated with the project; 5. Check to make sure whether the project will be developed in a Targeted Employment Area (TEA); 6. How will the EB-5 funds be released to the project? 7. If the I-526 is denied, when and how will the funds be returned to the investor? 8. Make sure there is a clear exit strategy for return of invested capital, etc.; 9. Make sure there is room for the requisite job creation. All these can be done directly by the investor, or there are companies that provide this service.

Thank you for your question. Typically, with due diligence reports, it is important that you retain a well-qualified immigration attorney. Together with the investment advisor, the two will ensure that the EB-5 regional center meets the legal requirements.