EB-5 Investments Due Diligence

The EB-5 Immigrant Investor Program may create the opportunity for a foreign citizen to apply for permanent residency in the United States by investing in a new commercial enterprise.  However, the process of choosing an investment for these purposes can be challenging. The United States Citizenship and Immigration Service (USCIS) has a multitude of requirements for foreign investors to be able to qualify for residency pursuant to this program.  As a result, it is important to know the facts of the commercial enterprise in which you are looking to invest and whether you are investing in a qualifying project.

Some of the questions that developers and business owners need to answer before investing include:

  • Has the project or business received preliminary approval from the USCIS? Getting provisional approval before raising and releasing EB-5 investor funds can remove the guesswork out of filing the I-526 and will reduce the burden of proof needed by the investor.
  • Is the project part of a Regional Center? If the Regional Center is not listed on the USCIS website of current Regional Centers, then investors should get a copy of the designation letter.
  • Do the Regional Center and the developers also have a financial stake in the project or business? If the developers and the Regional Center have made equity investments but the project or business owner has not, then the owner doesn’t have much of an incentive to ensure the success of the project.
  • Is there an “exit strategy?” Until the project is no longer in conditional status and the I-829 has been approved, all EB-5 investments are “at risk.”

Before you begin answering those questions, remember that although your computer can be a good starting point for information, there is no filter on the internet. The internet can lead foreign investors to incompetent advice, professionals with conflicts of interest, and scam artists posing as experts. Due diligence is always recommended before you make a significant investment but it is especially critical before you make an EB-5 investment.

At the Vernon Litigation Group, our focus is protecting businesses and investors from professional incompetence, conflicts of interest, and malfeasance which result in significant losses or other damage. Our work includes pre-investment due diligence as well as investigations and suits to recover damages that have already resulted. We offer representation to clients to throughout the United States and to foreign investors still living abroad as an Eb5 attorney.