How To Do Due Diligence For The EB-5 Investor Visa

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How To Do Your Due Diligence When Applying For The EB-5 Investor Visa

Due diligence is the reasonable steps, investigation, and analysis that someone takes before entering into an investment or other business transaction. For the EB-5 program, this involves the process a potential EB-5 investor undertakes in researching regional centers and their EB-5 offerings before making their investment and filing the immigration petitions.
 
If you’re planning on entering the United States through the EB-5 investment visa program, read here to learn a basic understanding about what you need to know about the due diligence process.

Why Is The Due Diligence Process Important?

All investments in the EB-5 program must be at risk to comply with the program requirements. This means that investors cannot be guaranteed a return on their investment or a return of their investment.
 
Before you invest money in a regional center EB-5 project, there’s important information you need, which will help you make an informed decision and improve your chances of successful immigration. Let’s look at some information you’ll need to gather before making an EB-5 investment.

Is The Regional Center Designated By The USCIS?

The USCIS is the governing body of the EB-5 immigration program and designates regional centers. They also handle the naturalization process.
 
To become a designated Regional Center, an application must be made to the USCIS. Part of the application involves showing that the Regional Center has a plan to focus on a geographical area inside the United States. The regional center must show a plan to achieve economic growth in that area.
 
They must take market conditions, timelines, and costs associated with their projects into account. The RC must show that they have a realistic business model. Throughout the application process, the USCIS verifies the information a prospective regional center provides them.

What Projects Has The Regional Center Undertaken?

Ask the regional center for a list of their projects that they have raised EB-5 capital for and what the results are in each offering. Have they achieved I-526 approvals? I-829 approvals? Return of Capital?
 
Any RC that isn’t willing to provide you with this information should throw up a red flag, as transparency is very important for you to complete your due diligence. Be cautious of any regional center that isn’t willing to answer your questions. Ask them to provide written documentation about their past projects.

If you’re planning on entering the United States through the EB-5 investment visa program, you need to know about the due diligence process.

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What Is The RC’s I-526 Success Rate?

The I-526 form is your initial contact with the American Government. You file this paperwork to show your intention to apply for the EB-5 investment visa, which the USCIS uses to determine if you are eligible for the EB-5 visa.
 
Most of the time, regional centers will release your funds from escrow once you file this document. Since this the approval of the I-526 petition is one of the most important step in the EB-5 process, it’s important to work with a regional center that has a high success rate with I-526 filings.
 
A high success rate means that the regional center has a track record of providing positive results and providing USCIS compliant EB-5 projects, which can help mitigate the risk to the investor.

Is The Project Inside Of A Targeted Employment Area?

A targeted employment area (TEA) is an area of economic interest to the American government. It’s either a rural area outside of a metropolitan statistical area or the outer boundary of a city or town having a population of 20,000 or more, or a location where there is a high level of unemployment as defined as having an unemployment rate at or above 150% of the national average. A TEA designation is not a permanent designation. These areas change over time, so you’ll need to ensure that the information you receive is up to date.
 
Under the EB-5 program requirements, in these areas, the investment required is $500,000 as opposed to $1,000,000. Some regional centers have projects in these areas, making your investment lower.

Have Your Immigration Attorney Go Over The Business Plan

You should always include your independent immigration attorney in your decision-making process. Before you begin looking for a regional center to invest in, you need to talk to a professional to discuss your options.
 
The United States handles immigration on a federal level. You can choose an immigration attorney from anywhere in the country. Look online and find reviews. Ask the attorney if they’ve helped people with the EB-5 visa before and if they have experience with people from your country.
 
Having a lawyer go over the regional center’s business plan helps ensure that everything is in order. Your lawyer can point out problem areas in the plan itself or in the language used. They can also represent you should there be a problem in your application for the EB-5 visa. Immigration is a complicated process; you shouldn’t try to do it on your own.
 
One small mistake on a form can cause you to wait longer for your green card. A mistake could also lead to a denial of your request to enter the country legally, putting your investment at risk. Hiring someone to help you is an essential step in the due diligence process.

What Is The Regional Center’s Plan For Job Creation?

One of the conditions for applying to the EB-5 program is that you’ll create ten full-time jobs for American workers. The good news is that by going through a regional center, your investment can create these jobs either directly or indirectly.
 
Indirect job creation can include those held by employees of project as well as employees of producers of materials, equipment, or services used by the project. In addition, a sub-set of indirect jobs, known as induced jobs, are created when the new direct and indirect employees spend their earnings on consumer goods and services
 
Another question to ask is how many investors the regional center has and how job creation is allocated among the individual investors. This is important to understand if there is a shortfall of job creation that is insufficient to meet each investor’s requirements. You should always ask what the regional center’s plan is if something goes wrong with the project.
 
Get this information in writing and have your lawyer or advocate go over it as well.

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Find Out What Happens If Your I-526 Gets Denied

Ask the regional center if they have a plan in place if your I-526 petition gets denied. Some Regional Centers will take guarantee that you will get your funds back while some will only reasonable steps to replace your funds and get your money back to you. It’s important to understand what the timeframes and requirements are.
 
Ask the regional center how long it’s taken them in the past to find a new investor and return funds to investors. Find out before you invest your funds if they want your money released to them when you file the I-526 or after you’re approved. Almost every RC that’s been in business for a long time wants the funds as soon as you file the I-526 to ensure that their projects remain funded.
 
Some regional centers offer a written agreement about the return of funds. Find out how much they return and the amount that they keep if you’re denied.

How Much Funding Does The Project Have Outside Of The EB-5 Program?

You need to know what the capital stack of the project is and what role the EB-5 funds have. It is important for the project to have matching fund in addition to the EB-5 funding to increase the job creation capabilities of the project. If they have no funding other than foreign investors, it may pose a risk from a job creation perspective.

The Due Diligence Process Protects Your Investment

By discovering this information, you’ll have a clear picture of the regional center you plan to invest through. This information you gather from the regional centers should help tilt the odds of success in your favor. There’s still more information you’ll need, but these questions will provide you with a good start.
 
Make sure you talk to a lawyer or professional advisor to protect yourself. With any business venture, fraud is a risk. The USCIS works to crack down on fraudulent activity, but there’s always someone that tries to game the system and take advantage of immigrants.
 
Look for a well established regional center. Find an advocate for yourself that has your best interests in mind. As long as you perform your due diligence and have a trusted advocate, you have a strong chance of getting your green card.

Let Us Help You Live The American Dream

With over two decades worth of experience helping people like you, we know what it takes to immigrate to the United States. The immigrants that we’ve helped all have one thing in common: a courageous desire to give their family a better life.
 
We operate sixteen regional centers and can undertake projects in 22 states and Washington D.C. No matter what your personal situation is, we can help make your dreams a reality.
 
Are you ready to take the next step towards immigrating to the United States? No matter where you are, we can help you with the due diligence process and immigration.
 
Contact us today and get the information you need.

Download Your EB-5 Visa Step-by-Step Guide

This 10-step guide will take you through each step on your path to permanent residence using the EB-5 Visa Program - It's Free
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