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Once a qualified foreign national has made a decision to pursue an EB-5 investment as their selected path for lawful permanent residence in the US, the most common question is – how to choose the right EB-5 project?

The main concerns for any EB-5 applicant are

  • Conditional permanent residence
  • Permanent residence
  • Repayment/Exit

The key determinants to decide on whether a specific EB-5 project will perform on all three points are People, Place, and Time.

People

Project sponsor

Developer or operator of the project; the party responsible to construct project and manage the operations. Here are some points to consider when evaluating the project sponsor:

Experience

Does the sponsor understand and have enough experience in the development and operations of projects in the industry? How many times has the sponsor played a similar role in a project of this type?

Proof of concept

Is the sponsor of project replicating prior successes from the previous project or testing a new concept?

Sponsor equity

Is the sponsor putting their own capital at risk or using someone else money?

Reasonable assumptions

Have the assumptions as well as projections of the sponsor been validated by a credible 3rd party market study?

Regional center

EB-5 is a complicated process that comes with diverse stakeholders involved. The Regional Center or RC is the hub in the process that coordinates with different group of project stakeholders as well as protects the investor’s interest. Here are some of the things to consider with the Regional Center:

Experience

How many I-526 and I-829 petition approvals and denials have been issued to the RC? How many projects have been successfully funded by the Regional Center?

Staff

Is the RC staffed to administer the complexities of the process?

Accessibility

Due to the time zone differences between Asia and the United States, contacting the United States office staff can be challenging. Does the RC have a presence in your home country?

Commitment

Is the RC focused on EB-5 as a long-term business, or are they seeking as a method to fund a single deal?

Reporting

Has the RC filed their annual I-924A with the USCIS? Has the RC filed any Form D with the section under the securities laws?

Place

The place or the location of the project is important to determine the potential success or failure of the project operations and return of investor capital. Important elements to consider when vetting the location of the project vary from industry to industry. A good place to build a 5-start hotel will be different from a prime place for an industrial manufacturing plant or solar farm.

The majority of RC projects are located in TEA that is either rural or has 150% of the national unemployment rate. Most of the investors prefer to invest in projects located in TEAs to benefit from the amount of $500,000 as opposed to the $1,000,000 minimum investment for projects that are located in non-TEAs.

Time

EB-5 needs careful planning as well as execution in order to deliver the intended results within the timeline stated. Industry, local, and national trends are some of the important elements to the project’s ability in order to create the jobs and provide the timely return of capital.

Conclusion

It is important to keep in mind that the right People, the right Place, and the right Time are important ingredients for the success of any business venture. You can focus on your due diligence in these areas in order to increase your likelihood to guide your investors through a successful investment and immigration process as well. Get in touch with the right service provider and choose the right EB-5 project.

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