The EB 5 program allows qualified foreign investors to invest $500,000 into the US economy in exchange for unconditional permanent residency.
In order to obtain green cards for your family through EB 5 investment, it is important to select a safe eb5 project. To qualify for green cards, the primary aim of investors is to get their investment refunded in full with a little bit of interest. Finding the right project to meet these needs is not difficult. However, it does need an investor to spend a good amount of time to conduct thorough due diligence. Here are some amazing tips to choose the right EB 5 project due diligence.
Team reputation: Check out the reputation of the project and the regional center’s team. Does the project developer hold enough experience in completing similar projects to the one you are looking for? Does the regional center have enough experience with such types of projects? Were the projects completed on time and within budget?
TEA status: TEA or targeted employment area is a rural area or region of high unemployment. EB 5 projects are generally located in TEAs to qualify for a reduced investment amount of $500,000 from $1 million. When it comes to proving that a project is located in a TEA, a regional center requires to submit data and approval letters.
Job creation Methodology: How do these centers count job creation? Are they utilizing direct, indirect, and induced job creation? Does the project have a job creation buffer so that all investors will get 10 requisite jobs in order to qualify for their I-829 petition?
USCIS approval: Does the regional center project of EB 5 have USCIS pre-approval? Is the regional center designated by the United States Citizenship and Immigration Services?
Capital Structure: Where do the several sources of funding come from? Does it have a senior loan? Do they have chosen bridge loans? Figure out how much comes from project developer capital as well as construction loans.
At-risk investment: The capital of the investor must remain at-risk. There is no guarantee that an investor will get a refund on investment. Even if a project developer says that their money will be refunded, USCIS might refuse to petition of EB 5 investor. It is essential for an EB 5 investor to consult with a lawyer of EB 5 immigration and ask what level of risk they are comfortable with.
Exit strategy: As said earlier, a project might be at-risk, and there is no guarantee ROI, an investor must scrutinize the exit strategy of the project. Under specific events or situations, an EB 5 investor’s capital may be returned. It is quite important to go over the exit clauses in the offering memorandum along with a knowledgeable lawyer.
Economic impact: When the project is located in a TEA, it is essential to look at the economic impact the project will have on the surrounding areas. What is the local economy like? Is there any demand for the proposed project?
Timeline: The process of EB 5 puts investors on a strict time schedule. Understanding the financial structure of the project allows EB 5 investors to know when and how their capital will be utilized. A lawyer can review the loan documents and give proper advice on whether the project comes with the necessary funds, documents, resources, and experience to complete the project on time.
To gain more details, simply get in touch with the right service provider and make the right EB 5 investment decision.