Simple And Effective Tip For EB-5 Developers And EB-5 Regional Centers

After recent EB-5 fraud allegations at Jay Peak, EB-5 investors are understandably weary about where they place their investments. In order to calm investors' nerves, EB-5 developers and EB-5 regional centers can implement the following practice:

Increased Transparency

EB-5 developers and EB-5 regional centers must think about the EB-5 process from the investor's point of view.

The investor's goal is to obtain a green card through investing in an EB-5 project in the U.S. The majority (over 80%) of these investors come from mainland China. They don't speak English. They rely on a large team of people to navigate them through the EB-5 process. The investors have a lot on the line. Investing in the EB-5 Program requires a minimum investment of $500,000. A lot of the money comes from family and friends.

With so much on the line, on top of the EB-5 fraud in the news, EB-5 investors are understandably nervous about where they place their investments. However, increased transparency from EB-5 developers and EB-5 regional centers can help.

Too often, project developers and regional centers are too absorbed in their work to remember to update their investors on the progress of their projects. This has two negative effects that cause investors stress.

First, it causes stress because it puts EB-5 investors in the dark.

  • They don't know if their EB-5 project is making progress. If the EB-5 project hits a problem and progress halts and the investors are not informed right away, they may not understand what's going on.

Secondly, it causes stress because EB-5 investors are on a schedule.

  • After their Form I-526 petition is approved by USCIS, they only have about two years to create the requisite 10 jobs required to attain their green cards. If EB-5 developers and EB-5 regional centers do not keep their investors well informed, investors could miss important deadlines.

These issues can be solved with increased transparency and interaction with EB-5 investors.

EB-5 investors should be contacted and informed on a quarterly basis. They should be updated on their project's development. EB-5 developers and regional centers should update them on a project's progress and explain any problems their currently facing. Huge problems that may come up include:

  1. Not enough job creation;
  2. Form I-526 petition denials;
  3. Construction scheduling issues;
  4. Construction problems;
  5. or, Major changes to the project;

Keeping your EB-5 investors informed will keep them more at ease about the whole process.

 

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