Here is a list of important tips for selecting EB 5 project. But first, let’s check out why EB 5 project selection is important:
The EB-5 program is designed for qualified foreign investors to invest $500,000 into job-creating enterprises for unconditional permanent residency in the United States. Getting green cards for the family via EB 5 investment depends on choosing the right EB 5 visa project. To qualify for green cards, investors goal is to get their investment refunded with maybe a bit of interest.
Choosing the right project to meet these needs is not challenging, but it needs an investor to dedicate time to conduct thorough due diligence. Let’s take a glance over tips to choose the right EB 5 visa project:
Team reputation: Check out the reputations of the project and regional center’s team. Does the project developer have enough experience to complete similar projects to the one you are willing to invest in? Does the regional center have experience with different types of EB 5 projects? Were the projects complete on time? A team of experienced staff will be able to overcome the difficulties that arise with large-scale real estate developments.
TEA status: TEA or targeted employment area is a rural area or place of high unemployment. EB 5 projects that are located in TEAs qualify for a reduced investment amount of $500,000. When it comes to proving that a project is located in a targeted employment area, a regional center need to submit data and approval letters.
Job creation: How does the regional center count the creation of the job? Are they utilizing direct, indirect and induced creation of job? Does the job include a job creation buffer so that there is no question that all investors will credit with the 10 requisite jobs in order to qualify for their I-829 petition?
USCIS approval: Does the regional center project have USCIS or United States Citizenship and Immigration Services pre-approval? Is the regional center designed by the United States Citizenship and Immigration Services?
Capital structure: It is important to know the different sources of funding. Does the project have a loan? What is the percentage of funding that comes from EB 5 capital? Does it exceed the recommended 30%? Figure out how much comes from project developer capital as well as construction loans.
At-risk investment: The capital of EB 5 investor must remain at-risk. There is no guarantee that an investor will get a refund on their investment. If a developer promises to return the money, USCIS may reject the investor’s petition. It is essential to consult with an immigration lawyer to invest in a project to discuss the level of risk.
Exit-strategy: While a project must be at-risk, there is no guarantee of returns on their investment, an EB 5 investor must scrutinize the exit strategy of the project. Under specific events or circumstances, an EB 5 investor’s capital may be returned.
Economic impact: When it comes to investing in TEA, it is essential to look at the economic impact the project will have on the surrounding areas. What is the local economy like? What is the demand for the proposed project?
Timeline: It is important to understand the financial structure of the project to help EB 5 investor to understand when and how their capital can be utilized. An immigration lawyer can review the loan documents as well as advise on whether the project has enough funds, documents, resources, and experience to complete the project on time.