Are There Downsides To Investing In A Late-Stage EB-5 Project?

Should an investor consider joining a late-stage EB-5 project?

KAPIN PLLC EB-5 immigration attorneysWhat are the advantages and disadvantages of investing in a late-stage EB-5 project?

A late-stage EB-5 project can be very appealing to investors. Here is a list of a few of the main advantages and disadvantages of investing in a late-stage project.

Potential Advantages:

  • An investor can see the EB-5 project's construction process in action.
  • An EB-5 project that already has I-526 petitions approved gives an investor more certainty that their I-526 petition will be approved for that same EB-5 project. Additionally, the approval process for the I-526 petition may be much quicker.
  • If the project has a large job creation buffer, in some cases, an EB-5 investor joining a late-stage project may benefit from already created jobs.

No EB-5 project is without risks. Investors should consider these potential disadvantages.

Potential Disadvantages:

  • An EB-5 investor must fulfill job creation requirements. An EB-5 project could miscalculate the number of jobs that it would create. Or, a project may allocate jobs to whoever invested first into the project, meaning that if the project is short on jobs, the EB-5 investor will not fulfill the program requirements.
  • If the EB-5 project is completed too early, then the EB-5 investor may face complications. The project's developer may need to keep the EB-5 investor's funds invested or they may need to redeploy them until the EB-5 investor can file their I-829 petition.

Tips:

  • The primary goal of an EB-5 investor is to obtain a green card. Therefore, they will want to find out if the project they are interested in is going to fulfill the EB-5 Program requirements and allow them to obtain their goal -- the U.S. green card.
  • EB-5 investors should conduct thorough due diligence on the project, the project developer, and the regional center, just as they would for any project.
  • An EB-5 investor would benefit from consulting with an immigration attorney about project viability and job creation.

In Conclusion:

If, after thorough due diligence and a consultation with an immigration attorney, the late-stage EB-5 project looks promising, then an EB-5 investor may want to consider investing in the project.

 

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