Investment immigration programs such as the EB-5 visa program are a convenient way for wealthy foreign nationals to settle permanently in their desired country.
The EB-5 visa program provides foreign investors with the chance to obtain U.S. permanent residence if their investments meet the program’s guidelines for investment and job creation.
It is recommended that investors do a preliminary analysis of whether they will be able to meet the requirements of the program such as:
- Documenting source and path of funds being invested
- USCIS-designated Regional Center
- Track record of the Regional Center
- Qualifying Investment Project
- Structure of investment and safeguards against loss of capital
This article provides an overview of the precautions to be aware of when applying for the EB-5 visa program. Consider the following information before deciding if this program is right for you.
Documenting Source and Path of Funds
Documenting source of funds is a critical step in filing a successful immigration application. It is important to work with an experienced EB-5 attorney with knowledge of both U.S. immigration laws and laws of the country where funds are originating from.
USCIS-designated Regional Center
Regional Centers are private entities designated by the U.S. Citizenship and Immigration Services (USCIS) for promoting qualifying EB-5 visa projects. In order to qualify for EB-5 benefits by way of investment through a regional center, it is critical to know that the regional center is duly designated by and is in good standing with USCIS.
Regional Center Track Record
After ascertaining that the EB-5 regional center is duly designated, EB-5 investor should inquire about the track record of the regional center, such as:
- Approval and denial record of past projects
- Approval and denial record of application for conditional green card or I-526
- Approval and denial record of application for removal of conditions or I-829
- Success, delay, and failure in repayment of capital to EB-5 investors
- Reputation of the regional center in the EB-5 industry
While the past success is not a guarantee of future performance, a regional center’s track record is a good indicator of intent and competence of the team running the regional center.
Qualifying EB-5 Project
After the EB-5 investor has zeroed in on the regional center, it is important to conduct due diligence on the project where the funds will be invested for American job creation. An EB-5 immigration attorney plays an important role in this process. The immigration attorney will review the documents and give an opinion on whether on the face of it, the project meets the requirements of immigration laws. It is important to note that the opinion of the attorney is restricted to immigration compliance and not to the financial viability of a project.
Structure of Investment and Safeguards against Loss of Capital
Per the applicable immigration laws in the United States, repayment of EB-5 capital cannot be guaranteed. The EB-5 funds are required to be subject to market risks, that said, market risk doesnot mean that the funds are put in a risky project. EB-5 projects are usually structured as preferred equity or debt. In both structures, the fund managers of the EB-5 funds aim to return capital to the EB-5 investors within, generally speaking, 5 to 7 years upon completion of minimum 2 years as a conditional permanent resident. Even if the EB-5 investors fail to meet immigration goals, they may be still entitled to return of the capital. Usually, the capital deployed in the project is collateralized by the assets of the project or guaranteed by the borrower by other means. It is important for the EB-5 investors to understand the investment terms prior to wiring funds to the fund manager of the selected EB-5 fund.
EB-5 investment units are private placement securities with rigid terms. While it may not be possible for the EB-5 investor to have the terms of investment amended, with proper due diligence they can make an informed decision about their EB-5 investment.
At Golden Gate Global, it is our endeavor to present risk-adjusted projects to our investors that not only help them achieve their immigration goals but also unlock excellent reinvestment and repayment plan options to our EB-5 investors. It has been and continues to be our privilege and commitment to provide our EB-5 investors with exceptional immigration and financial services during every phase of their EB-5 process. We are proud to have achieved 100% success in EB-5 project approvals and repayment of EB-5 funds in all the partnerships that have come due, in full and on time.
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