How Safe Can The EB-5 Visa Investment Be?

The EB-5 investor visa program was brought about in 1990 so that foreign investors can avail the Green card. This is a legal process by which the businessman invests in the potential projects registered under the program. This, in turn, creates more jobs for American citizens and elevates the economy.

4 Reasons To Consider EB-5 VISA

1. Fast grant of visa card unlike other means
2. No labor card certification or job offer is necessary
3. You do not need to disclose your net worth
4. High involvement of applicant is not required

Dependency Of Family member

The spouse and any unmarried children will be admitted to the US for a conditional period of 2 years. You can also file an I – 829 petition to remove the dependents from the family green card. As lawful residents, you will be allowed to attend school, universities and get a job in the US. 

What Are The Different Types Of EB-5 Investments?

Some approved projects by the EB-5 investments program includes- 

• Real Estate
• Hospital
• Office Space
• Film Studios

Requirements For Applying For EB-5 Investments

Before you calculate the risks of EB-5 investments, you must have the following things ready- 

1. $800,000 (US Dollars) for investment.
2. Legal proof that the source of the money available is lawfully obtained.
3. Should be able to pay fees to the different service providers, including immigration attorney, the Regional Center Sponsor, the USCIS, etc. Discounts are sometimes available depending on the case.
4. Should be able to wait until the I- 526 Visa gets approved in one and half years and another 6 months to fulfill the process of allotment of Green card.
5. Should not have any criminal records and get approval through the legal authorities performing the background check for political, criminal, and or financial activities in your personal history.
6. Must have an accredited investor status.

Investing a large sum of money in the foreign economy and having your citizenship determined by the business’s success possesses some risks and requires precise calculations. This is why most individuals are concerned about EB-5 investments.

What Are The Risks For EB-5 Visa Investments?

The future of this type of investment is not something that can not be predicted. Adding to that, the 2 main risks are- 

a) The risk of capital and 

b) the risk of attaining a visa

Considering everything works out smoothly, your ROI (Returns on Investments) will determine your capital generation, and the employment rate will determine the probability of getting your visa.

Another risk that you may have to face is the risk of acquiring a high debt. The upfront potential risk conditions in the project are- 

• The investment where the EB-5 constitutes only up to 30% of the investments and the rest of the 60% amount is backed up only by the mortgage loan.
• It is essential to analyze the total debt, not just the EB-5 debt, as the first revenue will be repaid as the mortgage amount.
• Refinancing the debt becomes difficult where the leverage is up to 80% in the industry. Also, the project should be successfully supporting the current interest burden, and more, as taking another loan on the prior EB-5 is not possible in the future.
• The financial incentives are aligned, and the amount of debt is limited to 34% on the project. This way, the refinancing becomes more accessible, and EB-5 investors stay protected.

Apart from the debt, you will need to keep up with the following investments as these will contribute to your cost in a latent way.

Petition filing fee within I-526 

This is the most essential and foremost component of EB-5 that displays how prepared you are. The form fee is about $3,700. Adding to that, this form is for individuals who have invested up to $50,000 to $1,000,000 in EB-5 projects.

Status acquiring with I-485

This form is for individuals who are currently living in the US and want to convert their status into conditional permanent status.  This form is submitted by the applicants as well as the depends once the I- 526 petition is approved. Your attorney will help you file this form on your behalf. 

USCIS will judge based on the petition whether you are eligible for permanent status or not. You will need to provide supporting documents for this, including your criminal history, a copy of your non-immigrant visa and passport page, certificates of marriage, divorce (if applicable) and birth, medical examination report, and a recent photo of yourself—evidence of eligibility, fingerprints, and biographic information, etc.

USCIS biometric Fee

The biometrics of the visa applicant is required by the authorities to run the security checks and confirm the identity. It is $85 for every individual, and you will be asked to submit your fingerprints, photograph, and signature as well.

Administrative Fee

If you have invested directly in a project, you don’t need to pay any fee. However, the regional center will require you to pay the fee. The percentage of the fee varies for each regional center, and it depends upon the nature of your EB-5 project.

Legal fee

Although having a lawyer is not necessary, given the complex nature of the process, it is a smart idea to get the expert on your side. They will guide you through the complex process and make sure that you don’t make any mistake which might cost you a lot in future.

I – 829 Petition for condition removal

The petition is I- 829 is filed 2 months prior to your current conditional residency status. It removes your permanent residency status condition and has validity for the next 2 years.

The other category of risks associated with your EB-5 investments are-

1. Fraud
2. Ethics
3. Security violations
4. Conflicts of interests
5. Failure to create an appropriate job in the industry

How To Minimize The Risk On Investments?

1. Hire a skilled team– Hire the skilled attorney to file petitions on your behalf. Make sure that you are doing your own research and don’t rely solely on the regional center report for making a decision.
2. Review the EB-5 documents– Learn about the investment, methodology, economic impact studies, infrastructure, demand, location, competitiveness, etc., before you make the decision to invest. Remember to learn about the exit strategy and the percentage of capital stack in your investments.
3. Review the past success rate for an idea– Go through the previous charts, growth, and performance to get an idea but don’t rely on them entirely. Market changes all the time; therefore, it is necessary that you perform your research. Also, look at how much EB-5 visas were allotted, how many applications were received, the numbers of jobs created, the numbers of investors getting their capital back, etc.
4. Learn about the job opportunity– Learn about the job-creating strategy and if it has been successful in the past as well. Learn about the induced and indirect job creation strategy regional centers are using and interfere wherever necessary.
5. Review the project site– Fly to the USA to review the site of construction. Make sure that the regional centers have been honest about the process.
6. Get advice from a lawyer– Rely on your lawyer for advice and work on solving the issues. Actively participate in the discussions and make the judgment that is best for the business. 

Debunking Myths With EB-5 Visa

1. EB-5 is a loophole for the criminals

A conditional Visa card is allotted to the applicant after ensuring that the amount is received through legal means. The US Department of Homeland Security (DHS) and other government agencies also perform background checks on the applicant.

2. An adequate background check is not done 

The background checks are done twice for every individual. Once during the application process and once after the green card is issued. 

3. Only wealthy people can buy a green card 

The EB-5 program makes sure that the investments are done over the years and the appropriate job opportunities are created. The evidence of the capital is also required to be displayed to ensure transparency in the process.

Basics Of Bonds With EB-5 Visa

Bonds can be used as debt instruments and are kept public. Over time they yield high returns once the maturity has been attained.

Bonds require a small proportion of built-in fees and interest reserves which further helps in the payment of the loan when the project is under construction and is not generating any income.

The two bonds, i.e., Revenue Bond and General Obligation Bond, are typically structured for the generation of capital. Revenue bond promises return based on the revenue generated after the project’s construction. General bonds are structured to promise that the bond profits will be paid irrespective of the generation of revenue. General bonds are more reliable than revenue bonds.

Bonds are long terms investments open for the public and require 10 to 25 years to attain maturity. Investors can either claim the amount on the maturity or sell it off when they want to. However, the selling price is highly associated with interest rate fluctuation.

Some Signs Of EB-5 Visa Fraud

Some standard promises of EB-5 Visa fraud are-

1. Giving 100% assurance about the visa or permanent residency
2. Promising guaranteed investments and returns on your project
3. Promising consistent high returns
4. Unlicensed sellers
5. Projects and investments not registered with the regional centers

EB-5 investments appear as a somewhat risky process; however, with research, planning, expert legal advisors, and patience, you will soon hold the green card in your hand. Now that you know the basics of an EB-5 visa, it’s time you get started with the process.