1. Confirm that the regional center has been designated as such by USCIS. There is a list of all approved regional centers, on USCIS’s website at USIS.gov.


2. Ask the regional center for the approval of the USCIS designation as well as copies of the USCIS forms and supporting documentation.


3. Request investment information in writing. Ask for a copy of the investment offering memorandum or private placement memorandum. Examine it carefully and ask questions.  If there is an unwillingness or inability to answer your questions to your satisfaction, do not invest.


4. If you have received the offer through a promoter, find out what benefits the promoters will receive by recommending the investment. Be skeptical and be on the look-out for any inconsistencies or uncertainties between what is offered by the promoter and what appears on the investment offering memorandum or private placement memorandum.


5. Seek independent proof and confirm whether claims made about the investment are true. For example, check corporate records, issuance of permits, local and state licenses, tax assessments, court records, Better Business Bureau, etc.


6. Find out if the regional center is affiliated with any government entity.  If so, there might be an extra level of credibility.


7. Inquire about the experience of the general partner or principal in the investment project.  It is important that they have credible and verifiable experience in successfully managing projects and business endeavors as well as creating jobs.


8. Evaluate the business plan.  Is it credible?  If the business plan and the assumptions made in the business plan do not appear to be credible to the investor, they may not be credible to USCIS.  Thus, the business goals may not be successfully completed.


9. Job creation is the pivotal point in the EB-5 process.  Reviewing the economic report will help to determine how realistic and conservative are the basis for the job creation projections for direct, indirect and induced jobs.  The investor should look for a project with detailed job monitoring and reporting on a regular basis.  In order for all investors in a project to be able to remove conditions, there must be 10 direct or indirect jobs created per investor. The greater the job projection over and above this amount, the more assurance the investor has that conditions will be removed even if the end result has fewer jobs than originally projected.


10. In all regional centers set up in a targeted employment area, the investment amount is $500,000. Obtain confirmation that the regional center is actually in a targeted employment area.


11. Regional centers generally have additional costs and fees of $40,000 to $70,000. Some regional centers include the investor's legal fees in this amount.  Find out what the administrative fees cover.


12. Once the $500,000 is invested, the regional center may opt to put the money into an escrow account until the I-526 petition is approved by USCIS. Get details about the escrow account, including banking information.  If the capital will be deployed to the project before the USCIS approval, inquire on the investment amount to be refunded if the I-526 is not approved.


13. It is crucial to recognize that the EB-5 investment is a risky venture and that there can be no guarantee that the investor's funds will ever be returned, or that the conditions on residence will be removed. As per USCIS regulations, the investment must be “at risk” in order to qualify for residence under this program. However, some investments have a clearer exit strategy than others.  Obtain independent advice from a financial professional regarding the security of the investment, when the investor may be able to recover his investment and likelihood and amount of return on the investment.


14. The EB-5 process is quite long and the regional center should be required to provide regular reports on the status of the investment to the investors.  Make sure that a reporting plan is in place and what will be covered.  A well prepared report should include an update on the investment project, job creation and capital expenditures.


15. Unfortunately, despite all the best plans and intentions, not all businesses develop the way it was anticipated.  If so, the developer must have contingency plans for the project if the project is off track.  If the jobs are too few, or different than projected or will take too long to create, the removal of the condition of the investor’s permanent residence could be in jeopardy. A regional center should have contingency plans if any of these conditions occur that would enable the investor to file a new or amended petition, if necessary.


16. Ultimately the investor's fate is in the developer's hands. The investor should research the history, background and experience of the developer and his/her team.


17. Look for warning signs of fraud. Beware if you spot any of these characteristics of a potential scam:

CONCLUSION:

If the investment in an EB-5 project turns out to be a fraudulent offering, the investor may lose the money and the pathway to lawful permanent residence in the United States. Be vigilant and carefully scrutinize any EB-5 offering before investing any money.

 
*The information included above does not constitute legal advice and is offered as information only. It is provided without any representations or warranties, express or implied. We make no representations or warranties in relation to this legal information. It represents a current summary of the regulations for USCIS which are subject to changes and/or modifications. No attorney-client relationship shall be created through the use of this information. If you have any specific questions about any legal matter, you should consult your lawyer or other professional legal services provider.

LAW OFFICES CLARA DIEZ

  • A guarantee of a visa or becoming a lawful permanent resident: Investing through the EB-5 program makes an investor eligible to apply for a conditional visa, but there is no guarantee that USCIS will grant you a conditional visa or subsequently remove the conditions on your lawful permanent residency. USCIS carefully reviews each case and denies cases where eligibility rules are not met. Any such guarantee is a warning signs of fraud.


  • Guaranteed investment returns or no investment risk: Money invested through EB-5 must be at risk for the purpose of generating a return. If you are guaranteed investment returns or told you will get back a portion of the money you invested, be suspicious.


  • Overly consistent high investment returns. Investments tend to go up and down over time, particularly those that offer high returns. Be suspicious of an investment that claims to provide, or continues to generate, high rates of return regardless of overall market conditions.


  • Some EB-5 regional center investments are structured through different companies that are managed by the same individuals. In such circumstances, confirm that conflicts of interest have been fully disclosed and are minimized.

EB-5 VISA RECOMMENDATIONS

The key to a successful EB-5 petition is exercising the appropriate due diligence.  Due diligence refers to the care a reasonable person should take before entering into an agreement or a transaction with another party. Prudence and caution are vital in the evaluation of the investment proposal.

 The fact that a business is designated as a regional center by United States Citizenship and Immigration Service [USCIS] does not mean that USCIS, the Securities Exchange Commission, or any other government agency has approved the investments offered by the business, or has otherwise expressed a view on the quality of the investment.  The approval of a regional center means USCIS recognizes the economic entity as a designated participant in the EB-5 Pilot Program. The USCIS has reviewed the econometric models and business plans and acknowledge that they are feasible and that jobs should be directly or indirectly created through investment in the approved industry categories. As with any other investment, it is important to research any offering thoroughly.

Here are some basic recommendations: