EB-5 Factors Every Investor Should Consider

The EB-5 program is without a doubt one of the best options available to foreign nationals with capital to invest and a desire for permanent residence in the United States. By investing in a new American business and creating American jobs, EB-5 investors earn green cards for themselves as well as their spouse and children under age 21. While this is certainly an exciting opportunity for many, there are some important factors every investor should consider. Here’s our list of important factors investors should consider before committing to their EB-5 investment.

Risk

While some falsely characterize the EB-5 program as essentially offering visas for sale, this couldn’t be further from the truth. As per USCIS guidelines, the capital put up by EB-5 investors must be an “at-risk” investment. There are no guarantees that an investor’s chosen business or project will succeed, furthermore with the recent lapse in the regional center program’s authorization investors have new risks they should be aware of.

Typically, investors have the option of a direct investment or investment through a regional center. Those who chose the direct investment route are generally taking a hands-on approach and personally managing a new business to earn their EB-5 visa. This allows them to be intimately familiar with all the factors that could put their investment at risk.

Those who chose the regional center route do not have a hands-on role, they need to put their faith in a team of managers controlling their investment. Typically managing the risk of choosing the regional center route means doing one’s due diligence on the regional center and its project. For example, how much experience does the regional center and developer have? How many I-526 and I-829 petition approvals has the regional center received? How long have they been around?

Source of Funds

Another factor investors should always consider when beginning the EB-5 process is their source of funds. Investors need to demonstrate that all the funds used for their EB-5 investment came from lawful sources and that the path of the funds into the US was also lawful. There are a variety of ways that investors fund EB-5 investments, but they should always consider the ease of demonstrating the legality of their source of funds. Selecting funds that are liquid or easy to document can not only save the investor time and stress, but it may also help their petition processing time if an adjudicator sees a clear and simple source of funds.

Additional Fees

Beyond the capital required for their investment, potential EB-5 investors should consider the additional costs associated with immigration through the EB-5 program. These can include:

• EB-5 immigration attorney fees for filing petitions
• USCIS filing fees for the I-526 petition, adjustment of status form, and I-829 petitions
• Regional center’s administrative fees
• Relocation fees
• Consulting with a tax attorney if an investor is worried about their tax burden due to living in the U.S. for a majority of the year

The benefits

Lastly, after considering all the above factors, investors should remember the benefits that come with acquiring an EB-5 visa.

• Permanent residence in the US for the investor, their spouse, and any children under the age of 21.
• A pathway to American citizenship and full participation in American democracy.
• Freedom to live, work and travel anywhere in the United States.
• Direct access to the world’s biggest economy.
• The opportunity to study at world class universities and colleges without the hassle of applying for a student visa, and reduced tuition rates for in-state students.

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